ONE of Wales’ most successful companies, Moneysupermarket.com yesterday announced its intention to float on the Stock Market next month in a move which could value the business at £1bn. The Flintshire-based finance and travel price comparison venture said a listing on the main exchange would help raise the profile of the business, as well as providing finance to pay off the recent £162m it raised to buy out of co-founder of the business Duncan Cameron – although he has retained a 4% interest. The company also yesterday announced it had appointed former Railtrack chief executive Gerald Corbett as its non-executive chair. Mr Corbett will help oversee the process of attracting two other non-executive directors. Co-founder and chief executive Simon Nixon said that post flotation the management and staff would retain a 50% interest in the business. Moneysupermarket.com’s flotation comes at a time when price comparison sites are attracting significant valuations and are seen as hot takeover targets. Cardiff-based headquartered motor insurance group Admiral is planning to sell a stake in its comparison website, Confused.com, which it is thought could value the site at between £700m and £1bn. A number of new entrants are also hoping to launch into the sector in an attempt to tap into the growing consumer demand for price comparison services on everything from energy suppliers to home insurance. Over-50s firm Saga is to launch an insurance price comparison site, while Tesco’s personal finance business is also understood to be planning the launch of Tescocompare.com before the end of the year. Moneysupermarket.com now attracts around 64 million visitors and 523 million page impressions a year, although it makes its cash by charging product providers a commission payment on sales made via the site, alongside around 5% from offering online advertising space. Last year the firm made revenues of £104.5m, an increase of 54% on 2005, with underlying earnings up 42% at £33m. Mr Nixon said, “We see an IPO flotation as important step in the development of our business. We have achieved a lot to date in becoming the UK’s leading finance price comparison website and travel. “We think an IPO will raise the company’s profile and further enhance its credibility and reputation with consumers and providers, which is pretty important. “We think it will also help with staff retention by being able to offer employees share schemes. “It will be good for recruiting other high quality staff externally into the business.” Mr Nixon said the business was well placed for continued growth, as well as a move into the mainland European market. He added, “There is huge growth in the market with broadband penetration increasing dramatically year on year. However, only 15% of people in the UK have bought a financial product online, so we feel we are just scratching at the surface. “We have just moved into home services, which includes comparison of mobile phones and broadband shopping. That is currently the fastest growing part of our business. “We are constantly monitoring other areas to move into. We are looking to diversify further in the UK. “The three obvious territories outside of the UK are Germany, Spain and France, because of their size and internet adoption.” The company currently employs just under 600 at its headquarters in Ewloe. “We are growing the numbers pretty rapidly. I am committed to the company long-term,” said Mr Nixon. He added, “One of the secrets behind our success in the past, and why we think we are going to be successful in the future, is that we don’t build products and services that just make money. “We build them so we can recommend them to family members as an unbiased consumer champion… this is what makes us money. Mr Corbett said, “Moneysupermarket.com is an exciting and dynamic business. “I have been impressed with the strong management team led by Simon Nixon, and by the significant growth the business has achieved up to now. “I believe that the group has a bright future as a public company. I am committed to achieving the standards of corporate governance expected of an industry leading company.”

Ofgem, the UK energy regulator, has released figures showing that, nationally, UK prepayment meter customers are losing out on savings worth a total of GBP250 million by not switching supplier. According to the watchdog, this works out as an average saving of around GBP100 a year for each customer who has not switched, which is a much bigger saving than for Direct Debit customers, who can save on average around GBP60 by switching. Ofgem has also published new research commissioned as part of its Consumer First program, which found that prepayment meter (PPM) customers wanted more information on the deals available to them and remained largely unaware of the benefits of switching. As a result, Ofgem is launching a campaign to encourage PPM customers to consider three options, including whether they are eligible for a special tariff deal that their supplier might offer. The campaign will also name and shame the most expensive PPM suppliers in each UK region. Ofgem said that, while Scottish and Southern Energy offered the best deal for PPM electricity customers, npower offered the worst deal. In addition, ScottishPower offers the best prices for PPM gas customers, while British Gas offers the worst deal, unless its customers are on its British Gas Essentials Tariff. The watchdog said that, unlike other customers, PPM customers are usually better off ‘pick and mixing,’ taking their gas from one supplier and their electricity from another, rather than opting for a dual fuel deal. Ofgem chief executive, Alistair Buchanan, said: “PPM customers should take advantage of the competitive market if they are to see further falls in their energy bills. Our research shows that by changing supplier they can save on average around GBP100. But in some regions this can be as great as GBP170 per year.”

Comparison websites help many people cut costs but their primary aim is to make profits for providers and they do not always show the cheapest sources of gas, electricity or other utilities. These sites usually receive between £30 and £60 in commission from the company you switch to and that can lead to conflicts of interest. This has prompted Energywatch, the energy supply watchdog, and Ofcom, which oversees phone, internet and digital TV suppliers, to introduce voluntary accreditation schemes to show which sites are more trustworthy than others. The Ofcom scheme requires the service to be independent and cover a reasonable number of suppliers. Energywatch requires approved services to cover all licensed suppliers. A dozen websites have now been accredited. Some applied but were refused. Audrey Gallacher, of Energywatch, says: “There are a number of services out there who did not want to sign up to our code. To consumers thinking about using one of those services, my message is caveat emptor or buyer beware. Even with the accredited sites, you cannot be a passive consumer, you should check at least three sites that carry the Energywatch confidence code logo. “I decided to check all 12. I live in central London, giving me a number of potential electricity suppliers (I don’t have gas), and my bill from EDF for the last quarter was £133. Typing my details into Simplyswitch.com, Moneyexpert.com and Energylinx.co.uk, the cheapest standard rate is apparently to stick with EDF, whose price is also matched by Sainsbury’s. But Saveonyourbills.co.uk tells me I would save £46 per year if I swap to British Gas Click Energy 2. Energyhelpline.com, Unravelit.com, Switchwithwhich.co.uk, Moneysupermarket.com and Uswitch.com give the same result. Ukpower.co.uk and Theenergyshop.com suggest EDF and Sainsbury’s. Homeadvisoryservice.co.uk says Scottish Power is the best, saving me £14 per year. After a day of trying to decipher the reasons behind the differing results, it appears to come down to how the people behind the sites input the details of each deal. For instance, I pay by quarterly variable direct debit, but this is a grey area with Click Energy 2. Quite apart from the potential technical failings behind the sites, there is room for some questionable practices. Even some insiders say some sites are less trustworthy than others. Ken Geddes, of Energylinx.co.uk says: “A site should have to include every supplier, not just licensed suppliers. That’s because there are companies in the market such as Telecom Plus, Ebico, Utilita and Green Energy who are not licensed suppliers, but they are suppliers none the less and have exceptionally good deals. “These companies buy energy from the licensed suppliers and rebrand it as their own. “But they are small companies and will only pay a minimal fee to the price comparison sites, so some of the sites just don’t list them. “Ebico, which buys its power from Scottish and Southern Energy, is a small not-for-profit company designed to help people on low incomes. But its plans are open to all and it is often the cheapest on the market. But it pays little or no commission to the sites, so they have no incentive to pass customers on to it.

The Energywatch accredited sites are:

www.switchwithwhich.co.uk 08000 111 395

www.ukpower.co.uk

www.energylinx.co.uk 0845 225 2840

www.uswitch.com 0845 601 2856

www.theenergyshop.com 0845 330 7247

www.energyhelpline.com 0800 074 0745

www.moneyexpert.com 01942 710 910

www.unravelit.com 0800 279 4091

www.simplyswitch.com 08000 111 395

www.moneysupermarket.com 0845 345 5708

www.homeadvisoryservice.co.uk 0800 0931021

www.saveonyourbills.co.uk 0870 005 2095

www.energywatch.org.uk

www.ofcom.org.uk

The trading unit of Electricite de France, Europe’s biggest power generator, may transport more liquefied natural gas to the UK and the Netherlands after winning a contract to buy Qatari LNG. EDF Trading Ltd said on Tuesday that it had signed an agreement with Qatar’s state-owned Ras Laffan Liquefied Natural Gas Co (RasGas) to buy as many as 4.5bn cubic metres of the fuel a year through 2011 for delivery at Zeebrugge in Belgium, equal to about 5% of annual consumption in the UK. “We can send it to the UK, France, Germany, Holland or Italy,” Eric Bensaude, who’s in charge of developing EDF Trading’s LNG business, said. LNG cargoes bound for Belgium under the contract can be diverted to ports outside Europe under unspecified circumstances, Bensaude said. The London-based unit, which last year traded enough gas to supply France for four years, owns 10% of the capacity on the Interconnector (UK) Ltd pipeline linking Belgium and Britain, Europe’s second-largest gas market. It’s also building a storage facility in Germany, the region’s biggest market. LNG is used in power plants, factories and households. Europe needs to import more gas, with U.K. production falling 8.6% last year, according to data from BP. Output declined 9% in Italy and 1.6% in the Netherlands. Europe won’t necessarily benefit from all the Qatari gas. LNG tankers can be diverted to markets where prices are higher, offering greater profit margins. Gas for next month at the National Balancing Point, the UK trading hub, yesterday traded at the equivalent of $3.64 a million British thermal units (Btu), ICAP prices showed. That’s about half the $7.09 at the Henry Hub in the US, the world’s biggest gas market. July-delivery gas at the Netherlands Title Transfer Facility traded at $4.14 a million Btus. “Some ships could go elsewhere,” Philippe Torrion, EDF Trading chief executive officer, said. Torrion declined to comment on who decides the final destination of cargoes from Ras Laffan Liquefied Natural Gas, or on what portion of profit from diverted cargoes EDF Trading receives. He also declined to say how the price EDF Trading pays for the gas is determined, citing commercial confidentiality. EDF will benefit from the Qatari supply as it builds or converts gas-fired power stations in the UK, France and Italy to provide an extra 3,000 megawatts of capacity by 2010, Bensaude said.
The company sells about two-thirds of its gas to traders and uses the rest for its own generation. The fuel may be sent to a proposed storage site in northern Germany, which is slated for completion in 2010, Torrion said. Such facilities allow traders to buy gas when it’s cheap and sell when prices rise, particularly during winter cold snaps. EDF Trading owns a gas storage facility in the U.K. Zeebruuge, Belgium’s only LNG terminal, can berth up to 60 tankers a year and will double its capacity in 2007 to import as much as 9bn cubic meters a year. RasGas, is a state-controlled company in which ExxonMobil holds a 30% stake. It said in April that it may increase LNG capacity by 40% to 36mn tons of LNG by 2009, about three times current US consumption. Qatar last year overtook Indonesia to become the world’s largest LNG exporter and plans to expand capacity to 77mn tons by the end of the decade, about a third of world supply “It’s clear that we have to be involved in LNG because it’s playing a more significant role in the European gas market, which will become more and more open in the coming years,” Torrion said. LNG is important for security of gas supply because it can be shipped to locations where there’s limited or no pipeline capacity. Europe relies on Russia for about a quarter of its natural gas. “There’s a significant pressure for the European Commission to get a more open market” for gas, Torrion said. Once the EU pipeline network is more joined, allowing more competition, “you will have a significant link between the natural gas markets of the world.”

Gazprom, the state-controlled Russian gas company, could make its second small acquisition in the UK with the purchase of Natural Gas Shipping Services, based in Wilmslow in Cheshire. NGSS is the sister company of Pennine Natural Gas, a company whose supply business was acquired last year by Gazprom Marketing and Trading, a Gazprom unit based in Kingston, south-west London. GMT has an option to buy NGSS, although it has not yet decided whether to exercise it. Gazprom’s presence in the UK is still small: Pennine Gas and NGSS together would account for less than 1 per cent of the market. But the Russian group has ambitions to grow, and has targeted a market share of 10 per cent. Yesterday Gazprom posted a doubling in annual profits to Rbs636bn (£12.3bn) last year, on revenues of Rbs2,200bn, up from Rbs1,380bn in 2005. Alexander Medvedev, general director of Gazprom’s international marketing division, caused a furore earlier this month when he said the company would make an acquisition in Britain “in the nearest future”. Shares in Centrica, which owns British Gas, rose more than 5 per cent, as traders speculated that the long-rumoured bid from Gazprom could now be imminent. However, Gazprom then denied that it had any plans to bid for either Centrica or Scottish and Southern Energy, the other leading British electricity and gas supplier that is not part of a big European group. By making such a statement, Gazprom precluded itself from making a bid for six months, unless another company bids. Analysts have suggested that if Gazprom does bid for Centrica, it is more likely to do so next year, after the Russian elections, once the uncertainty over the political outlook in the country has been resolved.

Energy Trends and Quarterly Energy Prices publications are published today, 28 June by the Department of Trade and Industry. Energy Trends covers statistics on energy production and consumption, in total and by fuel, and provides an analysis of the year on year changes. The June edition of Energy Trends also includes articles on: “Renewable energy in 2006″, “Estimates of heat use in the UK”, “UK oil imports since 1920″, “Regional and local use of road transport fuels 2005″, “Fuel Poverty”, and “Small area electricity and gas consumption”. Quarterly Energy Prices covers prices to domestic and industrial consumers, prices of oil products and comparisons of international fuel prices.

TOTAL ENERGY: QUARTER 1 2007

- Total production in the first quarter of 2007 at 49.3 million tonnes of oil equivalent was 13.3 per cent lower than in the first quarter of 2006.

When examining seasonally adjusted and temperature corrected annualised rates:

- Total inland consumption on a primary fuel input basis was 240.3 million tonnes of oil equivalent in the first quarter of 2007, 1.8 per cent lower than in the first quarter of 2006.

- Between the first quarters of 2006 and 2007 coal and other solid fuel consumption fell by 13.4 per cent.

- Oil consumption increased by 2.5 per cent.

- Gas consumption rose by 6.3 per cent.

- Primary electricity consumption decreased by 27.8 per cent.

COAL: QUARTER 1 2007

- Provisional figures for the first quarter of 2007 show that coal production (including an estimate for slurry) was down 27.9 per cent on the first quarter of 2006 at 4.0 million tonnes. The decrease was the product of a fall of 42.0 per cent in deep mined production and a decrease of 11.3 per cent in opencast production.

- The fall in deep mined production is due to mine closures.

- Imports of coal in the first quarter of 2007 were 2.3 per cent lower than in the first quarter of 2006 at 12.2 million tonnes.

- 84 per cent of the coal imported in the first quarter of 2007 (10.2 million tonnes) was steam coal, largely for the power stations market.

OIL: QUARTER 1 2007

- Total indigenous UK production of crude oil and NGLs in the first quarter of 2007 decreased by 4.5 per cent compared with 2006 to 19.9 million tonnes. Three new fields started production during the year ending march 2007, including the very large Buzzard field.

- The UK was a net exporter of oil and oil products in the first quarter of 2007 by 0.1 million tonnes. In the same period of 2006 the UK was a net importer by 0.6 million tonnes. The primary reason for the change from net importer to net exporter was refinery maintenance work. This resulted in the UK being a net exporter of oil products in the first quarter of 2007 by 1.0 million tonnes compared with the UK being a net importer of oil products by 0.3 million tonnes in the same period of 2006.

- Overall primary demand for oil products in the first quarter of 2007 was 5.1 per cent lower than last year.

- Motor spirit deliveries rose by 0.1 per cent. Deliveries of Derv fuel increased by 3.8. Deliveries of aviation turbine fuel rose by 9.3 per cent.

GAS: QUARTER 1 2007

- Total indigenous UK production of natural gas in the first quarter of 2007 was 16.8 per cent lower than in the corresponding quarter of 2006. Overall, natural gas production is declining as UKCS reserves deplete.

- Compared with the first quarter of 20065, exports of natural gas in the first quarter of 2007 increased by 44.1 per cent and imports increased by 50.6 per cent.

- Demand for gas in the first quarter of 2007 was 3.4 per cent lower than in the first quarter of 2006.

- Gas use for electricity generation was 34.2 per cent higher.

- Provisionally, consumption in the domestic sector fell by 12.9 per cent, while public administration, commerce and agriculture consumption fell by 11.2 per cent. Consumption in the industrial sector fell by 12.3 per cent.

ELECTRICITY: QUARTER 1 2007

- Fuel used by generators in the first quarter of 2007 was, in total, 8.8 per cent lower than the first quarter of 2006.

- Coal use during the quarter was 21.1 per cent lower than a year earlier.

- Total electricity supplied by all generators in the first quarter of 2007 was 4.8 per cent lower (-5.1 TWh) than a year earlier.

- Final consumption of electricity fell by 4.1 per cent in the first quarter of 2007. Domestic use fell by 6.2 per cent and consumption by commercial, public administration, transport and agricultural customers was down by 1.3 per cent. Industrial use of electricity was 4.4 per cent lower.

PRICES: QUARTER 1 2007

- Average industrial gas prices including CCL were 32.0 per cent lower in real terms in Q1 2007 compared to Q1 2006, whilst prices excluding CCL were 32.5 per cent lower.

- Average industrial electricity prices including CCL were 7.0 per cent higher in real terms in Q1 2007 compared to Q1 2006, whilst prices excluding CCL were 7.5 per cent higher.

- Estimates suggest that in April 2007, medium industrial electricity prices in the UK including taxes were below the EU15 median. Prices for all other size bands of industrial electricity and gas consumers were at or above the EU15 median.

- In mid June 2007, unleaded petrol was on average 96.6 pence per litre, an increase of 1.3 pence per litre compared to a year earlier.

- In mid June 2007, diesel was, on average, 97.2 pence per litre, 0.5 pence per litre lower than a year earlier.

(1) Deflated using the GDP implied deflator. Includes estimates of the average Climate Change Levy paid.

(1) Prices are provisional estimates.

(2) Prices are for ultra low sulphur versions of these fuels.

- Provisonial Q1 2007 data shows that the price paid for all fuel and light by household consumers has risen by 22.9 per cent in real terms between Q1 2006 and Q1 2007.

- Domestic electricity prices, including VAT, in Q1 2007 were 21.1 per cent higher in real terms than in Q1 2006. The price of domestic gas rose by 33.7 per cent in real terms over the same period, whilst the price of heating oils fell by 12.1 per cent.

- Estimates suggest that in April 2007, domestic gas prices in the UK, including taxes, for medium sized consumers were the second lowest in the EU15 and domestic electricity process were fifth lowest.

RENEWABLES: 2005

A special feature in the June 2007 Energy Trends looks at Renewable energy in 2006. It includes summary renewables statistics for 2006, which are published for the first time. A full set of renewables statistics will appear in the Digest of United Kingdom Energy Statistics, which will be published on 26 July 2007. The main features of the latest statistics are:

- Electricity generated from all renewables as a percentage of total UK electricity generation rose to 4.6 per cent in 2006 using the international definition of renewables. In 2005 on the same basis it was it was 4.2 per cent.

- In 2006 the percentage of UK electricity sales that were from sources eligible for the Renewables Obligation (RO) was 4.4 per cent, up from 4.0 per cent in 2005.

- Total electricity generation from all renewable sources in 2006 was 18,133 GWh, 7.5 per cent up on 2005.

- Generation from biofuels grew by 3 per cent, withinh which landfill gas was the main contributor. There was no growth in the contribution from the co-firing of biomass with fossil fuels.

- Generation from offshore wind grew by 49 per cent; and generation from offshore wind grew by 27 per cent.

- As at 31 December 2006, 449 projects contracted under the Non Fossil Fuel Obligation (NFFO), the Scottish Renewables Orders (SRO) and the Northern IreIand NFFO had been commissioned and were generating electricity, with a capacity totalling 1,200 MW. Total renewables capacity in the UK at that date was 3,613 MW (in DNC terms).

ISSUED BY:
Department of Trade and Industry
1 Victoria Street
London SW1H 0ET

Notes to editors

1. More detailed figures of United Kingdom energy production and consumption and of energy prices, for the first quarter of 2007 are given in the June 2007 editions of ENERGY TRENDS and QUARTERLY ENERGY PRICES respectively, the Department’s statistical bulletins on energy, published on 28 June 2007.

2. Energy Trends and the Quarterly Energy Prices bulletins, published quarterly, are available in hard copy from DTI on subscription, price £40 per annum and on the internet at http://www.dti.gov.uk/energy/statistics/publications/index.html The processing of subscription order/renewal fees has been transferred from DTI to Amey Plc with effect from 1 September 2005. For new subscription queries or a subscription form, telephone Amey on 01633 224712 or you can write to: Amey, 7th Floor, Clarence House, Clarence Place, Newport South Wales NP19 7AA.

A subscription form is also available on our Internet site http://www.dti.gov.uk/energy/statistics/publications/trends/index.html Single copies of Energy Trends and Quarterly Energy Prices are also available from the DTI Publications Orderline priced £6 and £8 respectively:

3. More detailed annual data on energy production and consumption for the years 2001 to 2005 are available in the DIGEST OF UNITED KINGDOM ENERGY STATISTICS 2006, published by the Stationery Office on 27 July 2006, priced £39.50. The Digest of United Kingdom Energy Statistics 2007 will be published on the 26 July 2007, all information will be available on the Internet at http://www.dti.gov.uk/energy/statistics/publictions/dukes/page39771.html

Ten years after British energy markets were liberalised the customer is king and can put pressure on prices with a click of a computer mouse to change provider. Since Britain first prised open its gas and electricity markets to private households in 1998-1999, the market has settled down and prices are quite low, but at the expense of close supervision by market regulators. British regulators encourage consumers to change supplier to maintain competitive pressure. Before the market was opened up, British Gas enjoyed a monopoly in the gas sector, while 14, mainly American, electricity companies had a monopoly in each of the country’s 14 regions. The market opening brought another 11 competitors to the market, notably banks and supermarkets, and at the end of 1999 26 companies were distributing gas and electricity throughout Britain. Prices dropped, but so did the level of service. Salesman working on commission practised foot in the door methods, offering compact discs and airline tickets in exchange for signing on the dotted line. In response to the disorder the government created in 2000 a two-headed policing authority, the regulator Ofgem and Energywatch, charged with resolving consumers’ problems. The organisations brought order into the market, reducing the number of companies to six. They are British companies Scottish and Southern and British Gas, which still has 47 percent of market share in gas, France’s EDF Energy, Germany’s EON UK and nPower (a subsidiary of RWE), and Scottish Power, which became Spanish when it was bought by Iberdrola. Prices are low in the market. According to the last comparative study by Eurostat, on July 1 2006, Britain was 16th in the ranks of cheap energy within the then 25-nation EU. And Ofgem and Energywatch are constantly goading the operators to adjust their prices, encouraging users to switch provider with a single click of a mouse or telephone call to force down prices. It has accredited 12 internet sites to compare prices. Allan Asher, the director general of Energywatch said that while half of the clientele has never changed operators, a quarter do it regularly and five million changes are expected this year. Customers are only allowed to change once a month. Alistair Buchanan, Ofgen’s director general, said competition rests firmly on the shoulders of the consumer. However the picture is not totally black and white, with British prices being among those which most increased between 2005 and 2006. The price of gas has increased by 70 percent since 2003, and that of electricity by 52 percent despite recent decreases, Asher said.

Householders who use pre-payment utility meters end up around £100 out of pocket by not switching their supplier, Ofgem said today. Pre-payment customers could save money by getting their gas and electricity from separate firms. However, many remain unaware of the potential savings, according to the energy regulator. It found npower to be the most expensive electricity firm for pre-payment meter customers, charging an average £435 a year. Scottish and Southern was the cheapest at £356. British Gas was the most expensive gas firm with average annual rates of £617. Ofgem said the potential savings for users of pre-payment meters totalled around £250m. Pre-payment meters are most often used by low-income households who find them helpful for budgeting. However, consumer groups are critical of the meters for being overly expensive and complain that suppliers make it difficult for customers to switch. Ofgem today launched a campaign urging households on pre-payment meters to shop around for better deals. Chief executive, Alistair Buchanan, said: “Pre-payment meter customers should take advantage of the competitive market if they are to see further falls in their energy bills.” Four million households are defined as “fuel poor” in the UK because they spend more than 10% of their income on energy. Many of these households use pre-payment meters.

As part of British Energy’s continuing commitment to provide clean, safe and reliable electricity across the UK, the company today signed a seven-year partnership agreement worth around £550 million and securing up to 800 jobs in Scotland and the rest of the UK with Renfrew-based Doosan Babcock. The partnership also has the opportunity for a future joint apprenticeship and graduate training scheme between the two companies. From their Renfrew base, Doosan Babcock will provide a mobile workforce of high quality technical and engineering staff to support British Energy’s generating stations across the UK. Bill Coley, Chief Executive of British Energy said: “Over the years, Doosan Babcock has consistently supported our industry’s commitment to safety, quality and excellence, providing British Energy with the support of highly skilled people. This agreement builds on the strong relationship we have had with Doosan Babcock since 2002 and establishes the basis for an even more successful partnership for our two companies.” “British Energy remains committed to Scotland, the location of our corporate office. Scotland is the base for a quarter of our generation fleet and the location that provides key engineering support, corporate services and high quality external engineering support across our company.” Iain Miller, Chief Executive of Doosan Babcock said “Doosan Babcock has a long standing and continuing relationship with British Energy, having worked on station maintenance support activities, plant outages, and a wide range of projects across all of its sites. However, this contract builds on this approach and moves towards a more strategic, coordinated and long-term relationship in support of operational reliability and plant life extension.” Wendy Alexander, MSP for Pailsey North which includes Renfrew, said: “This £550 million contract will bring many new, high quality jobs to the town, in addition to providing a more secure future for hundreds of Doosan Babcock employees on British Energy sites across Scotland. “The potential for a joint apprenticeship and graduate training scheme between the companies gives further cause for optimism. I will be urging local youngsters to consider these exciting opportunities as they plan their futures.”

Notes to editors:

The contract

The partnership strengthens the relationship between the two companies, which has existed since 2002 and covers mechanical site services, boiler and ancillary plant, engineering and technical support and non-destructive examination services. In addition, the contract will enable a fully integrated strategic approach to resource management, life extension, outage management, and project optimisation. This seven year contract, with the option of a two year extension, covers technical, engineering and operational support across all of British Energy sites.

British Energy

British Energy Group plc is the UK’s largest generator of electricity. With a dedicated workforce of about 6,000 skilled professionals, the company produces around one-sixth of the nation’s electricity. The company’s business strategy is to remain at the forefront of electricity generation in the UK. Put simply, the three imperatives for the business are world class nuclear operations, financial stability and life extensions. In the longer term British Energy will seek to apply its skills, expertise and assets in taking part in the evolution of the power market and in future debates initiated by Government regarding the UK’s energy strategy. The company is also striving reach world class standards of performance within the global nuclear community. British Energy is committed to operational excellence and achieving world-class performance in safety, human performance and plant performance and reliability. Further, the company seeks to extend the lives of the nuclear stations and secure the low-carbon benefits of those stations to help meet the climate change objectives of the UK. British Energy owns and operates eight nuclear power stations and one coal-fired power station. The company’s generating fleet helped avoid the emission of more than 33 million tonnes of CO2 in fiscal year 2006/2007. The nuclear stations have a combined capacity of almost 10,000 megawatts, whilst the coal-fired plant adds a further 1,960 megawatts of output. British Energy operates two types of nuclear reactor: the advanced gas-cooled reactor (AGR); and a pressurised water reactor (PWR). Sizewell B is the only PWR nuclear power station in our portfolio.

Doosan Babcock

Doosan Babcock provides services to the petrochemical, pharmaceutical, oil and gas and power industries worldwide. Its range of asset maintenance and improvement services, emissions control systems and related technologies allow Doosan Babcock to maintain its position as one of the world’s leaders in energy and process engineering. Globally headquartered in the UK, Doosan Babcock employs around 4,000 personnel.

UK utility Scottish and Southern Energy has finalized the first of four agreements with GD Power Development, a subsidiary of Chinese power player China Guodian Corporation, to support the development of four new wind farms in northeast China. The agreement was made through Scottish and Southern Energy’s (SSE) SSE Energy Supply subsidiary, which will also purchase approximately two million carbon emissions reduction certificates (CERs) over a period of five years, from the start of 2008. Each of the four wind farms is expected to have an installed capacity of around 50MW and will displace carbon emissions from coal-fired power stations in the region, leading to around two million tonnes of CO2 being avoided. The construction of the first of the wind farms, GD Xingcheng Haibin, is already underway and the last is expected to be commissioned during 2008. Ian Marchant, chief executive of SSE, said: “Climate change is literally a global challenge and supporting the development of clean sources of energy anywhere in the world is a key means of addressing it. We have deliberately acquired CERs which relate to a mature electricity generation technology which we have experience of operating, because we want to be sure that they are making a real difference.” Under the clean development mechanism (CDM), which is part of the Kyoto Protocol, countries and companies can meet their carbon emission reduction targets by purchasing CERs from CDM-approved carbon reduction projects in the developing world. This is the first time that SSE has directly acquired primary CERs from a project. In May 2007, SSE announced a target to reduce the amount of CO2 per kilowatt hour of electricity produced at power stations in which it has an ownership or contractual interest by 20% over 10 years, to 2016.

Nearly 70% of UK businesses have no target to reduce their carbon footprint, according to research by the Green Technology Initiative. Yet over 90% of respondents to the Green IT Awareness Survey think that tackling the carbon footprint of IT systems is core to an overall green strategy. Across the board the survey reveals a story of businesses believing in the concept of greener IT but failing to translate that into action, instead they are looking to suppliers and to the Government to carry the responsibility for bringing down emissions. Chris Hines, Director of Sustainability, at The Eden Project comments: “IT has the potential to have huge benefits for sustainability. But if played wrong can accelerate its impact disastrously. All business can think smart about making IT work for them and the planet.” 79% do not link power costs to hardware spend or IT budgets. Despite the fact that a small server will now cost more to power during its lifecycle than it costs to purchase initially. Indeed over 95% of respondents do not know how efficient their IT systems are because they have no measurement. “What we are doing in IT today is not sustainable. Systems efficiency is the cheapest and easiest way of reducing the carbon footprint of the work you do and delivered properly it has the benefit of bringing down costs across the board,” says Dan Sutherland, founder and acting chair of the Green Technology Initiative. “Whilst undoubtedly UK enterprises are willing to take action, many lack the incentive, knowledge and resources to make immediate changes.” There is some good news. The message about turning off systems that are not in use is beginning to get through, but much more needs to be done. Over 50% of respondents had still not caught on and of those that had many had only begun the process. The overwhelming majority of respondents are looking to vendors, hardware manufacturers and government to get them and the country on target to reduce CO2 emissions by 20% before 2010. A target we are not on track to meet. “Businesses are very aware of green issues but they are failing to translate that into effective action. 2010 is not far away and IT accounts for a significant amount of greenhouse emissions, so now is the time to take greater responsibility and tackle IT energy consumption,” concluded Dan Sutherland. “But business is clearly not getting the help and support it needs to take that responsibility. Both industry and the Government need to work together to help businesses make the changes they clearly want to make.” The Green Technology Initiative is working to provide information and advice to UK businesses to help them reduce their IT carbon footprint. Centring on the environmental impact of powering and operating IT infrastructure its aim is to demonstrate that every business can make at least a 20% cut in the emissions caused by IT in line with Government targets for 2010. More information can be found at www.greentechnologyinitiative.org.

UK gas prices at the National Balancing Point were generallly flat Friday as players stayed out of the market ahead of the weekend and in advance of an industry event, traders said. Within-day was up 0.4 p at 12:00 London time (11:00 GMT) at 21.8 p/therm on the back of a short system, traders said. Day-ahead was also up from where the working week contract closed Thursday, to 21.1 p/th, while the week contract itself was flat at 20.8 p/th. National Grid data showed demand up from the previous session, to 198 million cubic meters/day at 11:00 London time. The system was 6.3 million cu m short at that time. The extra demand was partly due to slightly colder weather, but may also
have been due to nominations for export to Belgium. The Interconnector website was showing at 12:00 that the pipeline would flip to UK export mode. Storage injection nominations into Rough storage faciliy were outpaced by withdrawal nominations by around 3.87 million cu m at 12:00, Centrica Storage website showed. With prompt prices basically steady, or at least in line with the slight change in fundamentals, the near curve was flat on the previous session. July was flat at 17.8 p/th at noon London time, as was August, at 18.95 p/th. “It just doesn’t seem to want to do anything,” said one trader. On the far curve, the winter 07 contract continued its downward path, dropping 0.3 p to 42.2 p/th. Later seasonal contracts were fairly illiquid, with wide bid-offer spreads, traders said, and mostly seemed flat on Thursday. Summer 08 was around 26.9 p/th, a touch weaker, and winter 08 at about 44.7 p/th, a touch firmer.

Water mains could be a new source of new energy, if a new technology developed in the UK is successful. The new technology from Mouchel Parkman would tap into energy from water mains with what they say has the potential to provide enough power to illuminate the Eiffel Tower 45 times or – on a more practical level – meet the energy needs of about 7,000 UK homes. The technology works by installing intelligent ‘micro-turbines’ in existing water and wastewater mains, where there is a measurable difference in pressure and available flow. Each turbine is capable of generating several kilowatts of energy and early estimates suggest that it can initially be installed in 100 sites in the UK, providing enough energy to boil the water for 24,000 cups of tea every hour. The technology recently held a successful trial in the US and could soon be fully operational in the UK. The venture, which has the backing of UK Trade & Investment, has prompted the launch of Rentricity Limited a new company dedicated to delivering the clean energy potential of the technology to the UK water industry. “The concept of water mains turbines has been around for a while although the technology which supports it is new and proven,” said George Taylor, managing director of Rentricity Ltd. “It’s an extremely exciting development given escalating energy prices and the increasing demands on business and society to devise alternative energy sources. This technology will allow water companies to retrieve and capitalise on a resource that would otherwise be lost to them.” Unlike wind power, the turbines are also contained within chambers that are generally below ground. “In the vast majority of cases there will be little or no aesthetic impact on the surrounding landscape,” said Taylor. Taylor also added that other organisations – including British Waterways, the Carbon Trust, and New and Renewable Energy Centre (NaREC) have also expressed interest in the new technology. “We believe that the technology can also be transferred to similar sized gas mains,” he added.

Smart meters can play a key role in helping households see where energy is being wasted, says Luke Nicholson in this week’s Green Room. But he warns that the UK government must ensure the devices display the information people need to make informed choices.The amount of energy we use in our homes, and the carbon this emits, is made up of two factors: the efficiency of everything we use, from power stations to Playstations, and how efficiently we use them. The first factor is the kind of thing that governments are good at regulating. The other one is much less familiar ground for them, but the UK’s recent Energy White Paper suggests that government may try to tackle it in a forthcoming consultation; enabling people themselves to become more efficient by changing their behaviour. There is clear potential for saving massive amounts of energy and carbon dioxide emissions through widespread behavioural change. The opportunity is huge: the Energy Saving Trust estimates that UK homes waste more than £900m each year just by leaving appliances on standby, with almost two-thirds of us leaving lights on in empty rooms. One-in-five people are completely unaware of how much our habits cost in terms of wasted energy. At present there are insufficient provisions to guarantee utilities companies will produce displays that have the desired outcome of saving as much carbon as possible. Two initiatives outlined by the government in its white paper aim to give people better information: smart meters, and “real-time displays”. A smart meter would live in your cupboard and allow more accurate bills, and a real-time energy display would be in your kitchen or living room, where it can show you detailed information on your energy use, cost and carbon emissions as you go about your everyday life. Research shows that bringing energy out of the meter cupboard will give people the information they need to start making informed choices that will increase their energy efficiency and cut their energy bills, with reported savings ranging between 5% and 30%. When they are provided with appropriate information about energy use in their own home, people can change their energy habits and save huge amounts of carbon and energy. But it is definitely too early to say which approaches work best, and government needs to provide for the pace of change that is required. The government needs to start deploying real-time information for consumers now, and they need to assess the effectiveness of displays in ways that will not undermine the progress that needs to be made. These are well intentioned initiatives, but some obvious pitfalls remain. Most glaringly it will be counter-intuitive for utilities companies to provide customers with a tool that actively encourages them to reduce their energy usage, without appropriate and accessible incentives. At present there are insufficient provisions to guarantee utilities companies will produce displays that have the desired outcome of saving as much carbon as possible. This is about engagement; displays can save between 5% and 30% of peoples’ energy consumption. If the government is going to send out 20 million of the devices, it needs to put in place a mechanism to ensure they are the 30% type. Most urgently, we must get these measures out there soon. As the Environment Secretary, David Miliband, says himself: “There’s a real will among consumers and businesses to become more energy efficient, tackle climate change and move the UK towards a low-carbon economy. Government’s role is to make it as easy as possible for them to do this.” Recognising this, we must strike while the iron is hot. Every day that people are left to guess about their energy use and emissions is another day when we will pump loads more unnecessary carbon in to the atmosphere. We need to ensure the real-time displays and smart meters households receive are effective, and are themselves low-carbon solutions. Meters and displays have the potential to help consumers to learn about energy and climate change, and to make more sustainable decisions whenever they buy a product or service.
Of course, all products and services have a carbon impact, including smart meters and real-time displays themselves. Making tens of millions of these gadgets could itself have an enormous negative carbon impact if regulation does not ensure that these interventions will save more carbon than they create. It is absolutely commendable that the government is engaging individuals on the issue of climate change and energy consumption; however, we need to see meaningful action here and now. We need to ensure the real-time displays and smart meters put in households are effective, and are themselves low-carbon solutions. They must be engaging and provide relevant information that will enable people to become more energy efficient and thus reduce domestic carbon emissions; and they must be available as soon as possible.

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The water watchdog has fined United Utilities £8.5m for breaking the rules over how it trades with its sister companies. This is the first time OFWAT has levied such a fine under powers it has had since April 2005. It issued the penalty after the North West-based utility failed to test market prices for services it provided from subsidiary companies. OFWAT Chief Executive Regina Finn said: “This fine sends a strong message to United Utilities Water and the rest of the water industry that they must comply with their licence conditions.” The penalty will be borne by United shareholders and will be paid to the Government. United Utilities made operating profits of £828m for the year to March 31 – up 13% on the previous year. The regulator based the fine on £95m in trading between the utility and its own companies in the 18 months to March this year. OFWAT said the fine covered the utility’s deals with its associate companies, including installing and maintaining water meters without testing its prices in the wider market. The watchdog has the power to fine water companies up to 10% of their turnover under powers which came into force two years ago. However, the £8.5m penalty represents 0.7% of the company’s £1.2bn regulated turnover for 2005/06.