A supermarket in England will begin using a new energy source this week that will be used to power its cash registers - speed bumps. 

According to GreenBiz.com, supermarket giant Sainsbury’s has installed new Kinetic Road Plates that will harness energy from vehicles driving in and out of the store’s car park.  The system, which has been developed by U.K. startup Highway Energy Systems works using plates that move when vehicles drive over them, creating enough kinetic energy to drive a generator.

Along with the kinetic energy system, Sainsbury’s features several other environmental technologies, including rainwater harvesting systems, solar thermal panels for heating water, sun pipes designed to increase the use of natural light, and energy management systems designed to ensure energy efficiency is constantly optimized. The speed bumps are also being tested to power street lights, traffic lights and road signs in London, and could be implemented throughout England if they are successful.

51 million extra funding to cut public sector carbon footprint

Hospitals, leisure centres, local authorities - and even central government departments - will be able to reduce  carbon emissions by taking up new energy efficiency loans. The Government, in partnership with Salix Finance and the Carbon Trust will provide £51.5 million in interest free loans to help public sector organisations take advantage of energy efficiency technology.  Announced by the Chancellor in the Budget, this money is an addition to £30m million announced last year for the scheme in 2008-20012 and will be available through Salix Finance. Loans will be available for around 80 different energy efficiency tehnologies, including building insulation, boiler and lighting upgrades, improved cooling systems and IT energy efficiency improvements.

This support will play an important part in the build up to the Carbon Reduction Commitment (CRC), which begins in April 2010. The CRC is a mandatory scheme which targets carbon dioxide emissions from large public and private sector organisations, which use more than 6,000MWh of electricity per year.  It will provide incentives for these organisations to record and reduce their energy use, and improve energy efficiency, saving an estimated 4 million tonnes of CO2 a year by 2020.

Minister for Energy and Climate Change, Joan Ruddock said: ”We estimate this fund could help public sector bodies save around £14 million per year in fuel bills. Following the announcement of our ambitious carbon budgets, all public sector organisations should lead by example by pioneering ways to reduce carbon emissions. I hope that schools, hospitals, and fire stations will look into projects they can undertake, and use this funding opportunity. “CEO of Salix Finance, Alastair Keir said: “Salix is very pleased to be managing this programme. Salix is currently working with 128 public sector bodies who are already saving over £3.5m a year in energy spend. This new loan funding will enable us to significantly increase the support we can provide to public sector bodies to reduce their energy spend and their CO2 emissions. It will not only enable other public sector bodies to benefit but also allow our current clients to undertake larger projects and achieve even greater savings.”

The Scheme will provide loans to pay for the installation of a wide range of energy efficiency measures in public buildings. All public sector organisations are eligible to apply. All loans will be repaid in 4 years with 8 equal repayments made by direct debit. The repayments can be covered from the energy savings achieved by the projects.The Carbon Trust is an independent company set up in 2001 by Government in response to the threat of climate change, to accelerate the move to a low carbon economy by working with organisations to reduce carbon emissions and develop commercial low carbon technologies.

Carbon Reduction Commitment - Public sector organisations that consume at least 6,000MWh of electricity through half hourly meters during the 2008 calendar year, or equivalent to an annual electricity bill in the region of £500k, and have at least one settled half-hourly meter, will qualify for the CRC. All central government departments will be part of the CRC and many other public sector bodies will also be covered. The scheme will begin in April 2010, starting with a three year introductory phase. Organisations will have to report their carbon emissions to the Environment. Agency and purchase allowances for every tonne of carbon they produce. The first allowances will go on sale in 2011 and all the revenue from the sale of allowances will be recycled back to participants six months after Government’s allowance sale, with a bonus/penalty element based on emissions

performance and their relative position in the scheme’s performance league table.

The European Union’s Emissions Trading Scheme (ETS) has been around since 2005 and accounts for most of the carbon dioxide (CO2) allowances issued to businesses in the world. In the US, President Barack Obama has also thrown his weight behind a cap-and-trade scheme. But few realise the UK will soon adopt a carbon trading scheme of its own in less than two years - the Carbon Reduction Commitment (CRC) that was announced back in 2007.

We believe that up to 6,000 businesses in the UK will be liable to join the mandatory scheme.

UK Businesses are facing huge bills if they remain unprepared.

Datamonitor estimates that UK businesses could face a £1.4bn bill for the carbon credits they need by April 2011, when the CRC permits are first sold.  If the finance director of a company has to write cheques for carbon allowances, they’re going to start asking why those costs are so high.  The CRC scheme will begin next April when the large businesses and public sector organisations, including the NHS and state schools, begin monitoring their emissions and reporting them to the government.  A league table of the participants will be published by October 2011 showing the targets, reductions in emissions and so on.

Based on volumes of electricity and gas emissions, retail businesses will be hit the hardest with over 30% of total CO2 emissions, according to Datamonitor.  The next largest polluters are manufacturers, at 15%, followed by the public sector. “We’re seeing a far greater awareness of the CRC within the business community, but organisations need to start budgeting for these allowances and formulating their carbon strategies now, particularly in light of the recession,” Datamonitor’s Jon Lane said.  “Those that sit on their hands and complain will end up paying more in the long term.”

Several businesses gathered at a carbon and energy summit on Thursday at the Royal Society of Arts in London to discuss how best to deal with the carbon trading scheme.
The UK wants to reduce CO2 emissions by 60% by 2050.  A power cut meant much of the event was held in darkness. One presenter quipped this at least meant that event had a smaller carbon footprint.  Much of the talk was about how the government’s scheme was an opportunity for businesses to reduce their CO2 emissions now ahead of the CRC.

“There’s a significant upside to helping to reduce climate change,” said Henry Garthwaite, a business development manager at the Carbon Trust, a government-sponsored agency that helps businesses lower their footprint. It also helped develop the CRC scheme.

“If the finance director of a company has to write cheques for carbon allowances, they’re going to start asking why those costs are so high.”

Mr Garthwaite said that one business the Carbon Trust had worked with had saved £1m a year off its energy bill just by switching off the screensavers on the computers in their offices.

It was these sort of seemingly small gestures, rather than complete overhauls, that were suggested to make companies more energy efficient, lowering their fuel costs and their eventual CRC bill.

That includes installing smart meters, which show exactly how much gas and electricity is being used.

“You can’t do anything in terms of reducing your footprint if you don’t know what it is,” Mr Garthwaite said.  The government already plans to put one in every home by 2020.

Some in the press have labelled the CRC scheme as another stealth tax on businesses. But few at the conference were keen to do the same. “It is essentially a very good piece of legislation,” said Donna Young, head of climate change at telecoms giant BT. “It just has some difficulties.”

For example, it calculates your allowance based purely on electricity and gas bills in the UK, not taking into account other items such as car fleets or its international businesses.

This leads to filing reports separately for each scheme, such as the UK and the EU’s ETS scheme, and the obvious problem of a company possibly being penalised for the same carbon footprint twice.

There are also the issue of how useful the scheme will be when it actually happens.

Unlike the EU scheme, the participants to carbon trading in the UK can set their own targets and their certify their carbon emissions themselves, rather than the third-party verification that is done on the Continent.

But surprisingly, there was little grumbling about the CRC scheme itself. It seems most businesses are happy to accept that they will be a critical part of fighting climate change.

And there is rare unity among the world’s politicians that carbon trading is the way to do it.

A proposed UK scheme designed to force some 5,000 businesses to cut carbon emissions by reducing their energy consumption gives companies no reason to buy renewable energy, critics said on Friday.  “Businesses need greater incentives to demand increased renewable power in their fuel mix, not less,” said Jo Butlin, vice president at UK renewable power supplier Smartest Energy.  “The UK’s Carbon Reduction Commitment proposals partly remove that demand, and with it a great deal of support for the UK renewable industry.” The Carbon Reduction Commitment (CRC) is a mandatory scheme starting in April 2010 that will affect any business that spent more than 500,000 pounds on electricity in 2008.

The Department of Energy and Climate Change (DECC) said it will help Britain cut carbon emissions by four million tonnes a year by 2020, the equivalent of taking one million cars off the road, and save businesses some 1 billion pounds on their energy bills.

The scheme calculates the greenhouse gas emissions of a business by applying the average carbon dioxide (CO2) emitted per megawatt hour of power when purchased from the national grid.

Critics point out that the CRC does not take into account where a company’s electricity is generated, for example if bought from a wind farm, nor does it recognize if a company has already voluntarily offset emissions by buying carbon credits.

“As your emissions are based on the grid average, why would you buy renewable energy over investing in reducing your electricity consumption?” Andreas Gunst, an environmental lawyer at DLA Piper, told Reuters on the sidelines of Prince Charles’ May Day Summit on Climate Change in London.

A DECC spokesman said the scheme is meant to spur companies to make simple reductions in energy consumption.

“It’s not trying to do everything. The main thing is it’s trying to pick up that really easy block of energy than can be reduced and save businesses money at the same time,” he said.

“We have a scheme for incentivising the production of renewable energy called the Renewables Obligation, and we think people should offset their emissions if they’re unavoidable, but that should be a last resort.”

In a separate survey, DLA Piper found that 71 percent of bosses were unaware of their company’s CRC obligations.

At the end of 2010, companies will have to retroactively buy carbon allowances from the government, starting at 12 pounds per tonne of CO2, to cover their emissions for that year.

Following that, businesses must buy allowances every April starting in 2011, based on their expected annual emissions. The revenues raised will be recycled back to participants at the end of the year based on cuts in energy use.

“You’re going to get some money back, but it’s essentially giving the government free credit for a year and people are very cynical about that,” Gunst said.

The DECC spokesman said the smallest participants would have to buy around 30,000 pounds worth of allowances annually.

In its annual budget announced last week, Britain unveiled 1.4 billion pounds of initiatives to encourage investment in green energy and said it would cut greenhouse gases by 34 percent below 1990 levels by 2020.

The UK on Friday also announced 100 million pounds in funding for companies to invest in energy efficiency.

One of the biggest renewable energy manufacturers in Britain announced on Tuesday it is to cut more than half its UK jobs, blaming the government for failing to support the sector. In a grave blow to the government’s ambitions to create a “green” export industry, Vestas, the world’s biggest maker of wind turbines, will axe about 600 of its 1,100 UK employees, probably closing its factory in the Isle of Wight and cutting jobs elsewhere in the UK.  Engel, chief executive of Vestas, told the Financial Times: “We had been planning additional investment in the UK because of government targets to increase renewables. But the UK is probably one of the most difficult places in the world to get permission for wind projects. We can’t afford to keep on this capacity.”  The blow comes less than a week after Alistair Darling trumpeted the role of low-carbon industries in job creation, announcing new funding for renewables in his Budget. Mr Engel said the cuts were not the result of the recession – the company’s order book had recovered and he predicted 20 per cent growth in 2009. The reason was rather the inability of the government to deliver the conditions needed for renewables growth. “There are two sets of politicians, Whitehall politicians and local politicians,” Mr Engel said. While the former group encourages renewables, which bring new jobs, local politicians tend to oppose wind farms, meaning few are built.

Businesses are losing their enthusiasm for environmental issues, just as the government is ramping up its efforts to combat global warming, a new poll suggests. More than eight in 10 companies think the government’s targets of cutting emissions by 80 per cent by 2050 are unattainable, according to a survey of 300 UK businesses by RWE Npower, the energy company. The poll was carried out before the Budget when ambitious emission cuts were set out.

Exchange rates, which have made imports of wind turbine components from Europe more expensive, also played a part in Vestas’ decision, Mr Engel said. “The UK currency has dropped significantly against the euro, which has made things difficult.”

But the main reason, he said, was the problem with building renewable energy in the UK. Although the UK has the best wind resource and the most generous subsidy system in Europe – paid for by electricity consumers – it has failed to generate the volumes of electricity necessary to meet European Union targets, which will require 35-40 per cent of electricity to come from renewables by 2020, against about 5 per cent today.

Mike O’Brien, minister at the Department of Energy and Climate Change, sought to play down the significance of the job cuts. He said: “It’s clear that Vestas recognises the potential of the UK wind market. Measures set out in the Budget will offer renewed support to the wind industry and help move potential projects towards construction, which could mean more business for Vestas.”

He said the government would be offering support to those affected by the redundancies.

But, making clear that he believed Vestas would continue to retain a production base in the UK, he added: “Vestas have indicated the steps we have taken [in the Budget] will have a positive influence on the possibility of them producing blades in the UK.”

Blades are the single component of turbines that Vestas makes in the UK. Other parts are imported.

Cambridge Econometrics predicted carbon dioxide emissions will fall by around three per cent a year in 2009 and 2010 as a result of less economic activity and more use of gas instead of coal to produce electricity. However the continued reliance on coal and gas-fired power stations will mean emissions fall more slowly over the long term. In addition the twice-yearly UK Energy and the Environment report found the Government will not meet its targets to increase electricity from renewables. The “ambitious” EU goal for the UK to produce 15 per cent of all energy from sources such as wind power and biomass by 2020 is set to be missed by a “wide margin”, the analysts said. A separate report from the UK Energy Research Centre (UKERC), based on 500 international studies, said Britain lagged behind other countries in the use of cleaner modes of travel. It added that there was short-term potential in improvements to bus, cycling and walking infrastructure, car sharing or school travel plans. But the report stressed that the biggest long-term impact would come through altering travel patterns so that fewer trips relied on the car.

The reports come as the Chancellor Alistair Darling lays out the first three five-year “carbon budgets” for reducing emissions and the target for cuts by 2020 alongside the Budget on Wednesday. The targets are expected to follow the recommendations of the Committee on Climate Change but fall well below the 42 per cent target recommended by environmentalists. Friends of the Earth wants at least £30 billion to be invested each year to deliver a low carbon recovery. The group is calling for a green investment bank and Treasury- backed green bonds as well as investment in green energy schemes and preventing energy waste.

Soaring costs have forced British Gas owner Centrica to postpone building a giant £750million offshore wind turbine farm. This is the latest setback for the Government, which is relying on wind power over the next decade to help the UK achieve tough green energy targets. Last week, Spain’s Iberdrola, the world’s biggest investor in wind power, admitted that investment in the UK would fall by 40 per cent this year. Centrica is still keen for the 250 megawatt wind farm near Skegness, Lincolnshire, to be developed, but the board will not sanction the move because of rising costs. The company has a £4billion war chest to spend on wind projects over the next five years and it still hopes it will be able to go on to become the country’s largest wind power investor and operator. Centrica has all the permission necessary to build the wind farm, which would be capable of supplying 170,000 homes, but the price of turbines, which are made overseas, continues to soar because of the weak pound, while engineering costs are escalating as steel prices rise.

In an attempt to kick-start the investment, Centrica and the Government have been in talks aimed at giving industry a bigger incentive to develop wind farms. The group wants Whitehall to offer increased concessions under its wind subsidy programme. Under this scheme, for every unit of green electricity a company produces, it receives a credit from the Government that can be used to offset charges it faces from any electricity it uses or produces from ‘dirty’ plants such as coalfired power stations. Energy Minister Mike O’Brien is said to be determined to create the conditions that will allow the wind industry to go ahead with its investments, without which the UK would miss its climate change targets.
Tomorrow he will spell out how the Government will further encourage the industry by offering generous research and development grants for a new generation of giant wind turbines. He will also say he is working with the Treasury to come up with more financial inducements to attract investment. 

It was a deal to make Alistair Darling hug himself with glee. Just as the world’s existing financial markets were hitting a five-year low two weeks ago, the Treasury raked in a cool £54m from a brand new one. The occasion was Britain’s first auction of CO2 permits. Almost 4m were knocked down to greenhouse gas emitters in a sale that was four times oversubscribed. The government expects to sell 80m more over the next four years, raising a further £1 billion.

The plan, at first glance, seems simplicity itself: by charging companies for the , the government hopes to encourage them to switch to cleaner andright to emit CO2 greener technologies. It is the latest development in a global campaign to save the planet by making polluters pay.

We are witnessing the birth of the greatest and most complex commodity market the world has seen. Last year alone, permits worth more than £55 billion were traded on the world’s carbon markets – but future trading volumes, if all goes global according to plan, will dwarf these.

Carbon trading schemes originate from the Kyoto protocol on climate change agreed under the auspices of the United Nations in 1997. Governments adhering to Kyoto accept limits on the CO2 their countries can emit. To meet their pledges, they put caps on the carbon outputs of domestic companies, which have to buy annual permits to exceed them.

Permits are bought from governments or from carbon traders, who, naturally, charge a commission. For the City the arrival of carbon trading is a bonanza. The sector already employs about 3,000 people and has created a few dozen new millionaires.

Several such schemes are up and running around the world: Europe’s Emissions Trading Scheme, founded in 2005, is the biggest, but others are following in Australia, the US and even China.

It sounds good news for everyone: governments, taxpayers, City boys and the environment. The reality is a great deal less rosy – indeed some of those closest to the carbon markets say openly that the system is doomed to failure.

Many carbon traders believe they could make the system work but fear the politicians who oversee it will never dare put a sufficiently high price on carbon emissions to make a difference.

Those millions collected by the Treasury, for example, came mainly from UK power companies, and the cost will be added directly to our bills, as will the cost of annual CO2 permits in future. More worrying still, carbon trading shows no sign of achieving its purpose: CO2 emissions have increased, not slackened, since the first trading schemes. What, then, is the point? Good question, particularly for the 10,000 politicians, policy-makers and civil servants arriving this week in Poznan, Poland, for the latest round of global climate negotiations. They will consider a proposal to make carbon trading one of the world’s main tools for cutting greenhouse gas emissions after the Kyoto protocol expires in 2012.

The incongruity of proposing that a brand new financial market might be able to save the world – when faith in every other kind of financial market is tumbling – needs no underlining. But there are plenty of other reasons for scepticism, too.

Jim Hansen, director of the Nasa God-dard space centre and a renowned critic of global measures to combat climate change, believes carbon trading is a “terrible” approach. “Carbon trading does not solve the emission problem at all,” he says. “In fact it gives industries a way to avoid reducing their emissions. The rules are too complex and it creates an entirely new class of lobbyists and fat cats.”

Even some of those involved in setting up the carbon markets fear they will fail in their principal aim of cutting carbon emissions. Liz Bossley of CEAG, a City consultant in carbon trading, may have helped the fledgling system to grow from nothing into a big business but she is frank about its limitations. “The fatal flaw is . . . the politicians, because they set the cap which determines the supply of CO2 credits,” she says.

“The problem is that making those caps tough enough to achieve real cuts in CO2 emissions would have all kinds of political consequences. The chances of any politician taking such a decision are negligible.” What Bossley means is that consumers – voters – have to foot the bill when the cost of permits turns up in domestic energy prices.

British consumers are already paying about £60 extra each year on their gas and electricity bills to support renewable energy. Will they take more of this medicine in the middle of the worst recession for dec-ades? Nervous politicians remember the backlash in 2000 when angry lorry drivers almost brought the country to a standstill over the fuel accelerator tax.

There’s more. Under the 1997 Kyoto deal the main 37 industrialised nations (but not America) agreed that one of the ways they could cut emissions was by financing “clean development” projects in the developing world.

The idea is certainly appealing: if a company is emitting too much CO2 it can either make cuts or pay other companies to cut their emissions instead. If it turns out to be cheaper to pay someone in China to plant a forest to absorb carbon dioxide, or a factory in India to install clean technology to cut its emissions of greenhouse gases, then this is allowed, provided the project has been approved under the UN framework convention on climate change. For each tonne of CO2 saved, the convention issues a certified emission reduction certificate, or CER. These are valuable: indeed, they are the nearest thing to currency that the carbon markets acknowledge. Each one is worth about £14.

The original plan was to create a system for transferring wealth from developed countries such as Britain and America to the Third World, hence killing two birds with one stone: cutting emissions and helping international development.

It certainly sounded good – but the reality is the most complex trading system the world has known.

The complexity naturally means the system is open to abuse. Last year The Sunday Times revealed how SRF, an Indian company that produces refrigeration gases at a sprawling chemical plant in Rajasthan, stood to make £300m from selling certificates to overseas companies including Shell and Barclays. The Indian company had spent just £1.4m on equipment to reduce its emissions – and was using the profit to expand production of another greenhouse gas, a thousand times more . Other manufacturers damaging than CO2 in India and China producing similar products are expected to earn an estimated £3.3 billion over the next six years by cutting emissions at a cost of just £67m.

Internal papers leaked from the UN show that such problems arose because the system for checking companies involved in emissions reductions schemes was seriously flawed. One official estimated that up to 20% of the carbon credits issued did not represent genuine reductions in greenhouse gas emissions. This meant that the real effect of the system had been to increase the amount of greenhouse gas in the atmosphere.

Nor is this all. One of the unintended consequences of the carbon trading system is a potentially huge – and massively destabilising – transfer of money and influence from the industrialised West to Russia. This is because when the Kremlin signed up to the Kyoto treaty it was given an annual emissions limit based on the horrors pumped out by filthy old Soviet industries back in 1990. Since then Russia’s industrial base has contracted so drastic-ally that it uses only a fraction of its allowances. One recent analyst’s report found that Russia has accumulated emissions permits worth about four billion tonnes of CO2. The report warned: “Russia must be singled out as a potential threat to the ability of the market to produce a meaning-ful carbon price.”

There is of course another huge incongruity in Russia, one of the world’s biggest suppliers of coal, gas and oil, also in effect having control of the system for reducing emissions from these fossil fuels. It means that the West could end up paying the Russians for fuel – and then paying them again for the right to burn it.

Undeterred by these fundamental flaws, the UN is planning many more CER schemes. About 4,000 are awaiting approval, including plans for capturing methane from Indian chicken farms, Filipino pig farms and Thai coal mines. Other schemes propose destroying industrial gases at factories in China and India and cutting CO2 emissions by building wind farms in Mon-golia. One of the ideas under discussion in Poznan could result in European industry paying millions of pounds to landowners in Brazil and Indonesia not to cut down their rainforests.

It is easy to mock such schemes but the mockery hides from view the really big question, and the one that is hardest to answer: are the emerging carbon markets capable of making a significant dent in the world’s surging carbon emissions?

Lord May, a former government chief scientist, is now an influential member of the British government’s climate change committee, whose inaugural report (Building a Low-Carbon Economy – the UK’s Contribution to Tackling Climate Change) will be published tomorrow.

The report will include a full scientific and economic analysis of how Britain can achieve its target of cutting emissions by 80% by 2050, including specific reduction targets for each of the UK’s first three five-year “carbon budget” periods. Although the report will support carbon trading as a possible means of reducing emissions, May has warned that the system risks creating a false sense of security.

Speaking at the Royal Society last month, he said: “The [inclusion of] these fiscal instruments could give the misleading impression that they can deliver real emissions reductions. Sooner or later, people are going to have to realise that, in climate change, we now face something far worse than world war two.”

Some of his fellow scientists even warn that governments may soon have to accept that combating climate change is becoming incompatible with economic growth. A recent peer-reviewed paper from the Tyndall Centre for Climate Change Research, the government’s leading academic research centre for global warming, warned: “Unless economic growth can be reconciled with unprecedented rates of decarbonisation, it is difficult to foresee anything other than a planned economic recession being compatible with stabilising the climate.”

At the Royal Society, Professor Kevin Anderson, director of the Tyndall Centre, spelt it out: “The target set for the climate talks was to keep global temperature rises below 2C. At the moment, however, the level of emissions is rising so fast that we are heading for a world that is 4-5C warmer than now by 2100. That would be catastrophic for the environment and for humanity.”

In other words, if the scientists are right, all our efforts to fight off the recession are wrongheaded. We should be embracing it. So where does this leave the world leaders and their Sherpas, heading for Poznan with their hopes set on trading our way out of the abyss? Anderson’s answer is a shrug.

“Carbon trading may have been the answer once but not any more,” he says. “It will just take too long to achieve anything, and we no longer have the luxury of time.”

Stinking rich

For clever City boys, carbon markets are a marvellous way of turning muck into brass. Daniel Co, a Filipino pig farmer, used to shovel the dung from his 10,000 animals into ponds on his Uni-Rich Agro Industrial farm. The manure generated thousands of tons of methane, a global warming gas, but Co did not want to spend £110,000 on kit to trap the gas.

Then EcoSecurities, a British carbon trading firm, worked out that anything that captured the methane would entitle the farmer annually to nearly 3,000 “certified emission reductions” – the nearest thing to a carbon trading currency.

EcoSecurities did the paperwork for Co and gave him just over £2 per certificate. He put in the methane-capture kit, generating power and saving about £24,000 a year in utility bills. EcoSecurities sells the CERs for about £10 each to a French bank, which sells them on to power plants that need to offset emissions. The consumer pays through higher bills. A nice little earner for everyone except the poor mugs (us) at the end of the chain – but can it save the planet?

The Carbon Trust has doubled the size of loans available to small and medium sized businesses for upgrading to energy efficient equipment and also doubled its grants for research into technology that can cut carbon emissions. The Energy Efficiency loans have been upped from £100,000 to a maximum of £200,000. The loans go toward companies that want to replace equipment with more energy efficient versions, including lighting, boilers and heat recovery systems. The interest free, unsecured loans can be paid back over a maximum of four years. Businesses in Northern Ireland are eligible for even larger loans; they can receive up to £400,000 for upgrades. Coinciding with the increase in individual loans, Carbon Trust has upped the pot available for loans by 45 percent, from £21.5 million to £31 million. Carbon Trust, an independent company set up by the government in 2001, said the increase was made in response to difficult market conditions and to help companies implement changes more quickly and on larger scales. The higher loans are also designed to attract more energy-intensive small and medium business that would need to spend more to upgrade their operations. Companies developing carbon-cutting technologies can also receive a larger boost from Carbon Trust, which has also doubled the size of its Applied Research grants. Increased from £250,000 to £500,000, the grants go towards projects that have the potential to reduce carbon emissions in the U.K. Since 2001, £18.5 million in Applied Research grants have been distributed to 145 projects. To date, 95 projects have been completed, and more than 65 of those have filed patents, secured additional funding or made commercial sales. Carbon Trust recently opened up its latest search for Applied Research projects.

New smart metering technology to measure energy use in the home would benefit electricity suppliers, consumers and meter distributors – but a lack of clarity over precisely where the benefits will fall is slowing the rollout, according to panelists at an industry round table earlier this week. Experts agree that the case for smart meters is compelling.

Pilots have shown that they will help reduce consumers’ energy bills by giving them more accurate information about where and how they are buying electricity, while they should also help improve competition in the market by making it much easier to change supplier.

Equally, smart meters will help suppliers meet government targets to reduce their customers’ energy use and provide clearer ways of delivering supply and billing, while also ensuring that they should have to build fewer costly new power stations.

The government and businesses meanwhile should see overall energy use and carbon emissions fall as they seek to replace a 50 year old distribution network that needs updating anyway.

But while the benefits are spread far and wide, it is not financially viable for any one entity to take control of the rollout, which at the moment is estimated to take some 10 to 14 years depending on estimates.

“Although rollout would be beneficial to suppliers, distributors, customers and more widely UK plc, the competitive energy market over here has fragmented any holistic business case,” said Chris Beard, principal consultant with technology services firm Logica.

Consequently, electricity suppliers and consumer groups both want a government mandate for rollout. “We support a mandate – we think with the relevant safeguards the barriers to rollout can eventually be overcome,” said Cassie Higgs of the National Consumer Council.

Finlay MacDonald, advanced metering programme leader at Scottish Power, agreed that without a mandate, a wide scale rollout of smart meters remains unlikely. “We don’t have a compelling supplier business case for universal rollout across our customer base,” he admitted.

It is likely that other power companies have the same problem – distribution of the 45 million or so meters needed is a relatively minor issue when compared to the infrastructure investment required by energy suppliers to support them.

Scottish Power estimates full smart meter rollout would mean a 4,000 fold increase in data volumes and significant investment in back office IT would be required to deal with this amount of information.

The department of Business Enterprise and Regulatory Reform (BERR) accepts that the business case alone is not really strong enough to encourage adoption of the technology, estimating that suppliers are only likely to roll out smart meters to 20 to 30 per cent of the market if driven solely by the commercial case.

However, customers are keen on the idea of smart meters. According to a recent survey by the National Consumer Council, three quarters of consumers think they are a good idea across all socio-economic groups.

There are three proposed models for a mandated roll out that could tackle the fragmented nature of UK power supply. First, franchises on a regional basis that would leave each supplier responsible for rollout in a particular area. Second, a central rollout with one company contracted to operate it nationally. Third, mandated rollout of smart meters built around existing metering market structures.

The government is currently consulting on its options.

“This is a very big ball, so you want to make sure its pointing in the right direction before you push it down the hill,” said Beard. “Probably the most likely option is a hybrid model of the different offerings.”

And a mandated rollout must be accompanied by an effective education campaign to encourage consumer uptake.

“Getting into schools and educating children about these things is the way forward – they’ll then persuade the parents,” said Peter Kennedy, chief executive of smart meter distributor bglobal.

As well as communicating upstream with supplier systems, smart meters have the potential to communicate downstream with innovative home display units.

Ensuring this functionality is included in any smart meters that are rolled out under a mandate is vital to having a thriving home display market, said Patrick Caiger-Smith, chief executive of home display maker Green Energy Options.

“The meter needs to be able to communicate both ways and the requirement can be specified, but not the technology,” he argued. “This will allow for a blend of home solutions to be offered, and means home displays will evolve fast.”

Displays have the potential to measure the energy use of individual appliances, allow homes to compete with one another on low energy use, and present energy information in new and innovative forms, engaging the customer, he added.

A spokesman for BERR said the department is looking to make final decisions on how to manage any smart meter rollout later this year.