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Recent news
UK mobile networks more popular than ever
Friday, August 20, 2010
The UK's mobile sector has never carried more traffic, but revenue was down last year for the first time ever as users demanded and got more service for less money.
Ofcom's Communications Market Report (lengthy pdf) says many things about the industry, not least that it's the first time the UK's mobile operators have seen turnover go into reverse. The mobile industry was still worth £14.9bn in 2009, but that's three and a half per cent less than the year before as voice and messaging revenue has fallen massively, and while people are spending more on mobile data it's not making up the difference.
Not that people aren't talking - mobile voice traffic is up more than six per cent, and messaging up by a quarter, but users are paying less for those services. Revenue from data has risen by 70 per cent since 2007, but that's unsurprising since the quantity of traffic jumped by 240 per cent between 2008 and 2009.
Ofcom chart
Including fixed-line data, Ofcom reckons that every year since 2005 the number of bits has risen every year by 70 per cent, while the revenue extracted from those using the bits has only gone up by one per cent annually. It's true that the cost of delivering those bits doesn't go up in a linear fashion, but the disparity is worrying for both fixed and wireless companies.
Users do still prefer using fixed lines when they can, with the consensus being that fixed connections are both cheaper and faster. The latter may be true, but in its report Ofcom points out that mobile broadband is now priced very competitively with fixed connections, and suggests that it's data capping that worries people. Few users hit the caps imposed by mobile operators, but the fear of doing so and incurring additional charges pushes users towards a fixed alternative.
12 per cent of UK adults are using mobile broadband, though most of them in addition to a fixed connection at home. Those in rented accommodation tend to opt for a wireless link, which makes sense.
But competing with ADSL isn't going to make money for the network operators, and it seems neither is providing mobile internet for a fixed fee. If network operators are going to fund 4G deployments, and pay suitably outrageous amounts at the UK's forthcoming mega-auction of radio spectrum then they're going to have to find a better way of squeezing more money from us.
This article was featured in The Register website.
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KNOC launches hostile bid for Dana
Friday, August 20, 2010
(Reuters) - State-run Korea National Oil Corp (KNOC) made a hostile cash bid worth $2.6 billion (1.68 billion pounds) for Dana Petroleum Plc on Friday, highlighting a strengthening in South Korea's resolve to secure energy assets overseas.Seoul gave KNOC a $6.5 billion warchest this year to compete with energy-hungry Asian state firms aiming to secure future supplies for their growing economies. Chinese and other firms have so far outgunned KNOC in bigger M&A battles.
The biggest hostile bid by a South Korean firm comes after Dana's management earlier this month rejected KNOC's 1,800 pence per share proposal.
The Aberdeen-based explorer urged investors to take no action.
Investors said that, with two months having passed since KNOC's approach, Dana needed to quickly produce another bidder or other material reasons why the bid undervalued the company.
"They've got to pull a rabbit out of the hat," one hedge fund manager said.
However investors were pessimistic about another bidder emerging at this late point.
"I'm not holding my breath," a second hedge fund manager said.
KNOC said it had already secured non-binding letters of intent from investors representing 48.6 percent of Dana shares.
The 1,800 pence/share offer represents a premium of 59 percent to the closing price of Dana shares on June 30, the day before news of the KNOC approach emerged.
"The offer implies an enterprise value per proven and possible reserves of circa $12.5/barrel of oil equivalent, which is a good price for the Dana assets, in our view," said Marc Kofler, oil analyst at Citigroup in a research note.
Dana shares, which have lagged the offer price by around a pound since KNOC first revealed it last month because of fears a deal would not materialise, traded up 5.6 percent at 1,790 pence at 12:22 p.m. British time.
Some investors believe Dana's reluctance to accept what many analysts see as a generous offer is partly related to Chief Executive Tom Cross's close ties to the company.
KNOC said it had no alternative but to take its offer to shareholders.
"We are very disappointed that the board of Dana does not agree that 1,800 pence per share represents a full and fair value for the company," KNOC senior executive vice president Kim Seong-hoo said in a statement.
KNOC has offered to pay 1.67 bln sterling in cash for Dana and would buy out convertible bond holders, giving a total deal value of $2.9 bln.
The deal would top the purchase by KNOC, which explores and stores oil, of Canada's Harvest Energy in October for $1.7 billion.
POSITIVE BID
Analysts saw a bid as positive for South Korea and KNOC.
"This shows the will of the South Korean government, which has been trying hard to boost its presence in global resource markets, and we consider it positively," Sean Hwang, head of the research team at Mirae Asset Securities, said before KNOC's confirmation of the bid.
Dana said last week it had ended takeover talks with KNOC after the Korean firm declined to sign an agreement that Dana sought before opening its books to KNOC.
The North Sea and Egypt-focussed explorer had said it would only let KNOC conduct due diligence if KNOC signed a non-disclosure agreement that investors said might preclude KNOC from later making a hostile bid.
Dana's top institutional investors, including Schroders, BlackRock and JPMorgan Asset Management, had urged Dana to engage in talks, according to media reports.
TIMID BUYER?
Seoul gave KNOC the warchest with orders to raise the nation's production capacity to 300,000 barrels per day (bpd) by 2012 from 130,000 bpd in December.
A deal with Dana would also help KNOC address perceptions of being a timid buyer, created after its failure to conclude deals in recent years.
The company has lost a number of deals in recent years. China's largest oil refiner Sinopec outbid KNOC for UK-listed Addax Petroleum in 2009. Italy's ENI trumped KNOC to snap up UK-based Burren Energy in 2007.
KNOC chief executive Kang Young-won, who spent more than three decades with now defunct Daewoo Group, is best known for hitting the jackpot with a $5.6 billion Myanmar gas development deal which he helped Daewoo International win while serving as its CEO until 2008.
After moving to KNOC, he has been scouring the world to boost oil reserves, adding Harvest Energy and a $335 million buy of Kazakh oil developer Sumbe to its assets.
Analysts said a takeover of Dana could put Faroe Petroleum, in which Dana holds 27.5 percent, in play.
"The market could look at this being a potential springboard for a bid for the company, whether by KNOC itself or if it is sold on to another potential predator," said Peter Hitchens, oil analyst at Panmure Gordon, Faroe's joint house broker.
(Additional reporting by Tom Bergin in London and Cho Mee-young in Seoul; Editing by David Cowell)
This article was featured in Reuters News Website.
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Merkel favours decoupling of gas from oil prices
Thursday, August 19, 2010
Hopes EEX to become main EU exchange for power, gas trade LEIPZIG, Germany, Aug 19 (Reuters) - German Chancellor Angela Merkel said on Thursday she favoured the decoupling of gas prices from oil prices, which would promote competition and transparency.
Merkel, who is touring energy sites this week and next to examine current issues, also said she hoped Franco-German energy exchange EEX in Leipzig would become the European Union's main platform for trading power and gas.
"Energy history is being written here, inasmuch as the markets are being made more transparent," she said, supporting the EEX's aim to develop a gas price index independent of oil prices. "This is a further step for more competition.
Continental European gas prices are traditionally tied to those of oil under delivery contracts with countries such as Russia and Norway. But a more active short-term trading market has sprung up of late, helped by a global gas glut and weak demand.
Merkel's centre-right cabinet plans to make a decision at the end of September on a long-term energy strategy for Germany, mainland Europe's biggest gas market and an important landing and transit destination. [ID:nBAT005634]
EEX earlier on Thursday said it expected year-on-year volume in its key power futures contract to grow 7.3 percent to 1,100 terawatt hours this year as it strives to become a European marketplace for a range of fuels. [ID:nLDE67I0I3]
"It is desirable for Leipzig to play a very dominant role," Merkel said of EEX, which now has 256 trading participants from 22 countries, up from 230 a year ago.
For a table with the EEX's first-half trading results, please click on [ID:nLDE67I0F8]
For a Q+A on Germany's energy strategy issues, please double click on [ID:nLDE67G1VA] (Reporting by Andreas Rinke, additional Reporting by Vera Eckert, writing by Sarah Marsh, editing by Jane Baird)
This article was featured in the Reuters News Website.
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United Utilities lifts northwest hosepipe ban
Thursday, August 19, 2010
United Utilities has lifted its hosepipe ban, saying that recent rainfall has allowed water resources to recover sufficiently. However, the company said it was "still asking customers to use water wisely".
The ban was imposed on 9 July after the driest December to June spell to hit the region in more than 70 years. Significant rainfall from mid July to mid August allowed UU to announce an end to the ban, although Pennine reservoir levels are still below average for the time of year.
Richard Blackwell, United Utilities' supply demand manager, said: "Reservoir levels have risen in recent weeks in Cumbria and North Wales and have stabilised in the Pennines with the rainfall over the last month. We now have sufficient reservoir storage overall to be able to lift the ban. This will come as welcome news to our millions of customers, who have been extremely patient and conscientious in their water usage
"Our key reservoirs in Cumbria and North Wales are now at the kind of levels we would expect for the time of year. Pennine reservoir levels remain below normal, with some still at very low levels, but we are now able to compensate for this shortfall by moving more water from Cumbria and North Wales using our integrated pipe network. Overall, the situation is much improved and the ban is no longer required to safeguard essential supplies."
UU still has a drought permit in place for Longdendale Valley, near Glossop, allowing the company to reduce the amount of water released by the Longdendale reservoir system into the River Etherow. It has not made use of the permit, and "current reservoir levels mean that we are very unlikely to do so," the company said.
This article was featured in Utility News Website.
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Scottish coal-fired station plan generates thousands of objections
Thursday, August 19, 2010
Around 10,000 people from 100 countries have objected to plans for a new coal-fired power station at Hunterston in Ayrshire, Scotland, according to global environmental pressure group WWF International, whose Scottish section is fighting the £3 billion project.Public consultation on Ayrshire Power's proposed 1,800 MW plant, planned to burn coal and biomass and to incorporate carbon capture and storage (CCS) technology, ends tomorrow (20 August).
WWF International president Yolanda Kakabadse said that plans for new coal-fired plants that do no not capture all the emissions from day one were unsustainable.
Richard Dixon, director of WWF Scotland, said: "With this huge public outcry, it is clear that a new coal-fired power station at Hunterston is not only unnecessary but is also deeply unpopular. This polluting plant is now being opposed locally, nationally and internationally and will face a very rough ride through the planning process".
Ayrshire Power is a subsidiary of development and infrastructure conglomerate Peel Group.
This article was featured in the Utility News Website.
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Wave and tidal energy roadmap sets key goals
Friday, July 23, 2010
Energy harnessed from the oceans could provide 15 per cent of the EU's energy needs by 2050 if key challenges are overcome, says the European Ocean Energy Association (EU-OEA).The organisation has published a technology roadmap for ocean energy in Europe to 2050 and says that investment in the ocean energy sector would generate significant levels of employment as well as contribute to carbon reduction targets.
Up to 3.6 GW of installed capacity could be attained by 2020 in the EU, and close to 188 GW by 2050, says EU-OEA. Challenges that need to be overcome include commercialisation of a new generation of full-scale ocean energy conversion devices and development and optimisation of manufacturing processes.
Reaching an installed capacity of 3.6 GW in 2020 would require an investment of €8,544 million and would avoid the emission of 2.61 million t/year of carbon. The ocean energy industry would benefit from knowledge transfer from and industrial cooperation with other sectors, including the offshore wind and oil and gas industries.
The report shows that significant progress has been made in ocean energy development in the last few years, with several EU Member States putting attractive financial incentives in place as well as developing world-class testing facilities. All the major utilities are engaged in the industry.
According to EU-OEA, industry development would be supported by a comprehensive research programme to improve the technical and economic performance of conversion devices. Risk reduction will also be required to leverage private investment.
This article was featured in the Utility News Website.
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Commission proposes closure of uncompetitive mines
Friday, July 23, 2010
Uncompetitive coal mines in the EU will have to be closed down by October 2014 under a new state aid regulation proposed by the European CommissionThe aim of the proposal is to end operating subsidies to uncompetitive mines and to redirect any state subsidies towards overcoming the social and environmental impacts of mine closure. The regulation concerns hard coal and will affect mainly Poland, Germany, the UK, Czech Republic and Spain.
Under the proposal, Member States would be allowed to continue granting operating aid as long as they present plans to close the mines by 1st October 2014. There would also have to be a minimum 33 per cent reduction in subsidies per 15-month period.
Any closure aid would be conditional on the presentation by the Member State a plan of appropriate measures, for example in the field of energy efficiency, renewable energy or carbon capture and storage, to mitigate the negative environmental impact of aid to coal.
"The aim of the proposal is to ensure a definitive closure of uncompetitive mines by 1st October 2014," said Joaquín Almunia, Commission Vice President in charge of competition policy. "There should be no doubt about this. Companies need to be viable without subsidies."
Almunia continued: "This is also in the interest of taxpayers and of government finances that are considerably constrained. The Commission will only allow operating aid to mining companies that have a closure plan and the subsidies should go increasingly towards supporting the social and environmental costs of doing so."
The hard coal sector employs around 100,000 people in Europe. The mines that rely on operating subsidies are located mostly in Germany's Ruhr region, in north-west Spain and in the Jiu Valley in Romania.
Poland accounts for more than half of the EU's hard coal production. Total aid to the hard coal sector has halved from €6.4 billion in 2003 to €2.9 billion in 2008.
This article was featured in the Utility News Website.
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EON UK Holford gas storage to partly open
Friday, July 23, 2010
Three caverns to open for trading in Q3/Q4 2011 LONDON, July 23 (Reuters) - Britain's Holford gas storage is expected to be partially open in autumn 2011, with the facility fully operational a little more than a year later, operator E.ON UK (EONGn.DE) said on Friday.
"We expect to have three caverns ready for trading by the end of the third quarter, or start of the fourth quarter in 2011. Another three caverns ready in Q3, Q4 2012, and the final two in Q1 2013," a spokesman for the German energy provider told Reuters by telephone.
Compared with other working UK gas storage facilities, Holford will be the fourth largest and is expected to have 156 million cubic metres (mcm) storage capacity with delivery rate of 16 mcm a day when complete. The site is located in north-west England and consists of eight caverns, according to E.ON UK.
Scottish and Southern Energy (SSE.L) also expects to complete the expansion of its Aldbrough storage facility to 200 mcm by March 2011, up from 115 mcm, which would overtake Holford in terms of storage capacity. [ID:nLDE66K20K]
Centrica's (CNA.L) Rough is by far Britain's largest gas storage site at 3,300 mcm capacity, while SSE's Hornsea and Star Energy's Humbly Grove facilities are both 300 mcm. [ID:nLDE61O1WN]
Britain has a lower ratio of storage as a percentage of demand than France or Germany, prompting calls for more storage to be built to buffer against unexpected supply cuts like those caused by a Russia-Ukraine gas dispute two winters ago. [ID:nLDE62F2DP] (Reporting by Kwok W. Wan; editing by James Jukwey
This article was featured in the Reuters News website.
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Blackout hit Bulgaria's Black Sea resorts
Friday, July 23, 2010
uly 23 (Reuters) - Tens of thousands of holidaymakers were left without electricity on Friday after a series of defaults on a high voltage power grid supplying power to the Bulgaria's Black Sea coast, power utilities said. The blackout affected an area of some 60 km (37 miles) along the Black Sea coast, including one of Bulgaria's key summer resorts, Sunny Beach, which has a capacity to host more than 100,000 tourists, as well as the towns of Pomorie and Nessebar.
"Every place from Obzor to Aheloi is without electricity since this morning," said Joerg Sollfelner, executive director for Austria's EVN (EVNV.VI), which distributes power in southeastern Bulgaria.
"Some 56,000 of our clients, hotels, households, restaurants have no power since around 10 a.m.," he told reporters.
The town of Biala, some 80 km north of the Black Sea port of Burgas, and the holiday villages around it where power is distributed by Germany's E.ON (EONGn.DE), were also affected, the company said.
State power utility NEK said a 110 kilovolt power grid switched off at 10.45 am local time due to a burned out wire. NEK said the most likely reason for the incident was an attempt to steal the wires or to sabotage power supplies.
NEK has often complained of wire thefts that have become common in the European Union's poorest member state.
Another incident on the same grid have left the Black Sea coast without power for several hours late on Thursday when a wire tore and twisted one of the electricity poles after a technical glitch, NEK said.
The state electricity system operator said it expected to fix the cut-off wire later on Friday and introduce a power regime for the affected Black Sea areas until the end of Saturday, when it hopes to replace the twisted pole. (Reporting by Tsvetelia Tsolova; Editing by Jon Hemming
This article was featured in the Reuters News website.
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Britons spend 3 million hours a year reading meters
Tuesday, July 20, 2010
Some 3 million hours a year are spent by Britons reading their meters, according to Energy UK. The body, which represents the big six energy suppliers, said its research found that 40 per cent of householders don't always send in meter readings, giving an indication of the number of customers who receive estimated rather than actual bills.
Energy UK said smart meters would solve the problem. It is thought Ofgem's latest smart meters document will be published next week.
This article was featured in Utility News Website.
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7,500 firms face fines under CO2 scheme - WSP
Tuesday, July 20, 2010
(Reuters) - Some 7,500 British firms are expected to miss a September 30 deadline to register for the UK's new energy efficiency scheme, meaning they face fines of at least 5,000 pounds each ($7,644), an environmental consultancy said on Tuesday.The mandatory Carbon Reduction Commitment Energy Efficiency Scheme (CRCEES), which began on April 1, forces businesses like banks, hotels, hospitals and schools to register with the Environment Agency and monitor energy usage.
According to the government, the scheme will help cut annually by 2020 UK greenhouse gas emissions by 4 million tonnes and corporate energy bills by 1 billion pounds.
But around 40 percent of the 20,000 companies affected are unaware of their obligations and will therefore miss the registration deadline, said WSP Environment & Energy, a division of WSP Group plc.
"Those businesses which are well-organised are finding that registration is not a complicated exercise," said David Symons, a director at WSP Environment & Energy.
"However, our findings indicate that a lack of awareness and engagement among participants could prevent thousands of companies from complying with the scheme on time."
Using a worst-case scenario analysis, WSP said some 6,000 of the 15,000 lower energy users affected by the scheme, firms that "had at least one half-hourly electricity metre settled on the half-hourly market across the whole organisation" in 2008 but consumed less than 6,000 megawatt hours, will fail to make the required information declaration to the agency by September 30.
These firms will then face a one-off fine of at least 500 pounds.
WSP estimated another 1,500 of the 5,000 heavy energy users, firms that had a total half-hourly consumption over 6,000 megawatt hours excluding power used for transport and domestic accommodation, will miss the registration deadline completely.
They face a 5,000 pound fine followed by an additional 500 pounds per working day for up to 80 days. The CRCEES is one of two incentive schemes launched earlier this year which the former Labour government said are key to meeting the UK's target to cut emissions by 34 percent below 1990 levels by 2020. Feed in tariffs were also introduced to spur growth in small-scale, locally produced renewable power.
(Reporting by Michael Szabo; Editing by Sue Thomas)
This article was featured in the Reuters News website.
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BT backs long wave radio for smart meters
Monday, July 19, 2010
UK incumbent BT has joined forces with broadcast infrastructure firm Arqiva and business consultancy Detica in a bid to mop up business under the local government’s proposed smart metering initiative.Due to cover 28 million homes and small businesses by 2020, the UK Government will soon publish a prospectus providing more details about the project and the possible commercial opportunities. Once this document is released, BT, Arqiva and Detica aim to have a proposal ready by September for a universal, dedicated, secure and resilient nationwide communications network for smart meters and smart grid applications.
BT is known to be backing long range radio as the technology solution, after spending 18 months analysing the various options available for smart metering. “Unlike mobile, it can provide truly nationwide coverage and dependable reception indoors. The fact it operates on dedicated licensed spectrum is also important as it is ideal in ensuring the security of supply and protection of consumer data while meeting the needs of the Energy Industry,” BT said.
Arqiva would provide the radio spectrum and infrastructure, with BT managing the project and Detica providing the information and intelligence services. Sensus will provide the smart meter and smart grid kit as well as the long range radio technology, FlexNet.
Smart meters will enable commercial and residential customers to monitor the gas and electricity being delivered to their properties. The Government believes that smart meters will play an important role in improving energy efficiency, reducing consumption and helping to meet national and international environmental targets. Smart meters will also help utility companies improve the efficiency and control of their networks, as well as provide the ability to offer tailored pricing packages based on customer usage patterns.
“A communications network designed to meet the unique needs of all of Britain’s utilities – electricity, gas and water – must be able to deliver universal connectivity and long term resilience. And the only way to achieve this is through a dedicated network based on long range radio,” added John Cronin, managing director for Arqiv
This article was featured in the Telecoms.com website.
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Gas mains replacement could be drastically scaled back
Monday, July 19, 2010
The multi-billion pound gas mains replacement programme is set to be reviewed and could be scaled back, Utility Week understands.Steve Smith, Ofgem's senior partner responsible for local grids, said the £24 billion programme, which has seen costs double over the past seven years, may no longer make economic or safety sense.
Speaking at an industry meeting about the future of gas supply and demand, Smith said the Health & Safety Executive (HSE) was looking again at the programme, which constitutes the largest single component of the gas distribution networks' capital expenditure regulated by the watchdog.
Under the 30-year programme, 91,000km of mainly iron gas mains, principally in urban areas, are being replaced with either polyethylene or steel pipework. It was prompted by a series of high-profile accidents in the 1980s and 1990s involving old-style ductile iron mains, which claimed 20 lives.
Smith said it was no longer clear whether the programme was "proportionate and sustainable", calculating that at current levels of expenditure the network operators were spending around £275 million per life saved.
A spokesman for the HSE said the exact terms of the review had still to be settled. "As you would expect with a 30-year programme, it is important to take stock at key points. As we approach the ten-year anniversary of the start of the programme there is a good opportunity to consider how it can continue to deliver improved safety."
He said the HSE is discussing with Ofgem how the review findings could inform the watchdog's price review.
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SSE and Mitsubishi ink low-carbon alliance
Monday, July 19, 2010
Major green technology agreement expects to create up to 1,000 jobs at Scottish and Southern Energy's Glasgow research centre
Scottish and Southern Energy (SSE) and Mitsubishi have today signed a wide-ranging agreement that will see the two companies co-operate on the development and deployment of a host of low-carbon technologies.
The strategic agreement was signed at a ceremony attended by Scottish first minister Alex Salmond and is expected to herald the creation of about 1,000 new jobs over the next five years at SSE's recently launched Centre of Engineering Excellence in Renewable Energy in Glasgow.
The two companies said they will now work together on a range of technologies, including offshore wind farms, advanced technology for smart electricity grids and low-carbon vehicles, carbon capture and storage and high-efficiency power generation.
Colin Hood, chief operating officer at SSE, hailed the agreement as "one of the most significant industrial partnerships to be established in Scotland since the heyday of North Sea oil", adding that the alliance should help SSE to cement its position as the UK's largest producer of renewable energy.
Salmond also praised the partnership as further evidence of Scotland's emergence as a leading development hub for low-carbon technologies.
"Scotland is taking a lead in the global journey to a low-carbon future through our commitment to world-leading greenhouse gas reductions and to harnessing our vast wind and marine power resources and established expertise in engineering and innovation to deliver clean, green energy," he said.
The deal also underlines Mitsubishi's growing interest in the UK renewable energy market. The Japan-based engineering conglomerate has made a series of investments in the UK's low-carbon sector in recent months, most notably announcing plans to invest £100m in a UK-based wind turbine R&D project through its Mitsubishi Power Systems division.
This article was featured in BusinessGeen.com
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Quality of water dips to 99.95 per cent
Thursday, July 15, 2010
Water quality in England and Wales dipped marginally in 2009, falling to 99.95 per cent after three years at 99.96 per cent, according to the Drinking Water Inspectorate's annual report.Chief inspector Jeni Colbourne said pesticides were responsible for the downturn. She said concentrations of slug-killer metaldehyde in raw water had fallen in 2009 and slug pellet sales were down 70 per cent on 2008, but added: "It remains to be seen whether this catchment management approach will be sufficient."
Colbourne said compliance would have been 99.93 per cent if the stricter European lead standards due to come into force in 2013 had been applied, despite industry efforts to remedy the problem with treatment.
The inspectorate wants companies to work with local authorities and health professionals to address lead in drinking water where older housing stock poses the most risk.
Thames and South West topped the league table with compliance scores of 99.98 per cent.
This article was featured in Utility News website.
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