MOD in Hot Water

Now it is the turn of the Ministry of Defence to come under fire for its approach towards cost cutting in the recession. It was reported in The Times on August 18th that:

“Private consultants are being paid £4,000 a day by the Ministry of Defence to help it to cut the costs of its contracts…

Under an agreement described as “extraordinary” by one MP yesterday, eight consultants will also receive a 30 per cent “success fee”, pushing their daily pay to more than £5,000 each.

It is also understood that the MoD departed from normal practice in awarding the contract, worth up to £12 million, by failing to advertise it before recruiting Alix Partners, a US-based company with a London office.

Industry experts criticised the deal, saying that the fees were unusually high and that the failure to advertise the contract might have led to an unnecessarily high bill for the taxpayer. The details have come to light as the Armed Forces pension scheme is cut and hundreds of redundancies are made.”

You can go here to read more.http://www.thetimes.co.uk/tto/news/uk/defence/article3137644.ece

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24 billion Euros of fuel costs avoided from wind energy in 2015

Expectations of wind energy have been substantially increased in recent months due to the combination of rising fossil fuel prices, devastating oil spills and the shelving or downsizing of several nuclear programmes following the crisis at Fukushima.

Every month in 2009 and 2010, the global wind energy industry installed new capacity equivalent to the output of 1.2 average nuclear reactors. According to the EWEA^*, expectations are that in 2015 wind power will avoid € 23.7Bn of fossil fuel costs – € 15.1Bn of coal costs, €6.4Bn of gas costs and €1.7Bn of oil costs – to produce electricity. This is based on a moderate development of wind power, with 460 GW of global cumulative wind power capacity installed by 2015, compared to 200 GW last year

Figures for 2020 will be even more substantial (€87Bn of fuel costs saved), whilst for 2030, EWEA forecasts that wind energy will meet 26-34% of Europe’s electricity demand, with almost as much electricity coming from offshore turbines as from those onshore.

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18% of SME’s don’t understand energy contracts or energy options

Small businesses must be protected by electricity market safeguards to prevent energy bills from escalating further as small firms say they are concerned about the rising cost of energy, the Federation of Small Businesses (FSB) said in a new report.

In the 2011 Budget, the Government announced plans to reform the electricity market and introduce carbon pricing – a mechanism that artificially increases the prices of electricity generated from fossil fuels – in order to make renewable and nuclear energy more attractive energy sources and decrease the UK’s dependence on fossil fuel energy.

But, ahead of the White Paper on Electricity Market Reform due tomorrow (Tuesday 12), the FSB is raising concern that electricity generators will pass on the extra costs to consumers. In a new report, ‘Small business and infrastructure: Energy‘, the FSB is arguing that while it supports the idea of incentives to invest in low carbon infrastructure, there needs to be safeguards in place to prevent electricity generators from passing the carbon price on to end users by pushing prices up further.

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SMEs feel slighted by Energy suppliers

Ofgem recently completed a Harris-commissioned study, polling 90 SMEs and enquiring about their use of energy and their experience of the energy market. Although this segment of the market represents comparatively low revenues for the suppliers -notwithstanding that little revenue times many SMEs still represents a fair few bob – it is a sector they should heed, as some of these SMEs may one day become significant PLCs with proportionate clout.

And the current views are damming. Energy suppliers are perceived as undifferentiated, offering in essence a commodity. There are claims of profiteering, of little or no proactivity when it comes to contract renewal, rollover or issuing of renewal letters, and of insufficient transparency concerning bill management, tariff rates and contract terms.

The bill is often found to be difficult to understand. In general there is a feeling that suppliers should be more honest and proactive. The concept of backbilling is intensely disliked, being described as ‘unfair’ and ‘diabolical’. Conversely, overpayments, sometimes involving large sums of money, take a considerable amount of time to be repaid by some suppliers.

Auditel affiliates will not be surprised by these gripes, but comforted by the fact that they bring genuine help to these stranded SMEs, not just on the financial side but also with decrypting a series of unfathomable hieroglyphics and possibly even with managing emotions!

This survey should be bedside reading for the CEO of all energy suppliers.

New OFCOM rules for Business

OFCOM (The Telecoms industry regulator) has announced some changes that affect business customers:

Shorter Contracts – The maximum contract length for new contracts is now 24 months and a potential customer MUST be offered a 12 month option.  The aim is to promote competition and ease of switching.  However it doesn’t appear to state what notice periods are allowable.  We’ve recently seen one telecoms company that sold a 12 month contract but with a 36 month notice period i.e. in effect a 36 month contract.  Not exactly fair and a perfect example of sharp practices in the industry and why you should always read the T&C’s no matter how long, how boring or how much you trust the salesman (alternatively let us read the T&C’s for you!)

Porting Mobile Numbers to take a maximum of 1 working day – The penalty OFCOM has suggested is compensation of at least the daily line rental rate however providers are free to design their own compensation schemes.

Emergency SMS – Under new European regulations, disabled consumers should have the same access to emergency services as other consumers. The emergency SMS scheme, allows registered users to text 999 in an emergency instead of making a phone call. The scheme currently has around 14,500 registered users and predominantly used by hearing and speech-impaired people.  Mobile providers are now required to make the scheme available on a permanent basis for hearing and speech-impaired consumers.  So if you have any hearing or visually impaired staff with mobiles you need to ensure that they have access to this service.

Read the full OFCOM press release

Predicting Future Energy Prices – 5th & Final part

Parts 1 to 4 are some of the most important variables but it’s by no means an exhaustive list. Other important factors will all play their part e.g:

• The global economy
• New gas and oil new technology for extracting oil/gas e.g. Steam extraction of Canadian Oil Sands
• Unrest in the Middle East
• Political decisions on nuclear reactors
• The uptake of renewable sources
• New & improving renewable technology

So in summary:

All in all you can see how difficult it is to predict what the energy will do in the coming weeks and months, never mind years! Can Shale Gas reshape the global energy industry as many predict or will it be hindered by environmental, safety and technical issues? What progress will the EMR bring – simplification, stable costs and a clear vision for the future, or the opposite? Will promised storage materialise to stabilise UK prices? …And of course, don’t forget the weather!

Confusing as some of these issues may seem at first glance; these are some of the many factors that need to be taken into consideration when implementing an energy contract. When to ‘lock in’ and how long for are vital questions in terms of costs and budgeting. No-one can state with accuracy exactly what the market will do, however by taking an informed, unbiased view, and with careful monitoring, risks can be reduced and savings maximised.

Focus DIY is going into administration

It is a shame, but they have been struggling for a long time, and the current state of the housing market didn’t help. This reminds us that if you are going to be in an inconvenient location, you’d better be the category killer (or the best player, with the biggest pulling power!)

Yesterday (May 5th), this news was widely reported as you will now know. My interest in Focus is multi faceted. I sometimes say that I was born retailing. My parents had three hardware and Garden shops in Nottingham when I was young. That is where my career started. The bigger “DIY sheds” (B & Q, Great Mills etc), were just emerging. Remember Texas “THE BIG ONE”? Sadly I do!

They were putting pressure on the traditional independent retailers like ours. The supermarkets were doing the same, although initially just on food, not DIY and Gardening. Now of course they do Stationery, Greetings Cards, Decorating, Motorcare, Toiletries, Cleaning, Dry Cleaning, Post Offices, Key Cutting, Shoe Repairs, and even Cars!

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Blow wind, blow over Blighty and its modern windmills!

According to Renewable UK, latest statistics reveal that in 2010, the contribution of wind to the UK’s electricity supply was almost 3 times that of hydro, totaling over 10 terawatt hours. This is sufficient electricity for well over 2 million homes.

As for Quarter 4 2010, all indicators point to the fact that wind delivered a record contribution of electricity to the grid, both 20% higher than Q3 2010 and 24% higher than the comparable Quarter of 2009. So much for those who say that wind energy production falls off in the winter months!

Today, in and around the UK, there are almost 3200 turbines in operation across 290 projects. Apart from the energy produced, our atmosphere benefits too. Annual noxious gas reductions amount to 6MT of carbon dioxide, 137kT of sulphur oxides and 41kT of nitrogen oxides.

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A word in Urea

Researchers at Heriot-Watt University in Edinburgh – renowned for its leadership on critical global issues – have discovered a way to use urea – (NH2)2CO – as a fuel for low-cost fuel cells. Fuel cells are an excellent form of alternative energy for, amongst others, cars, submarines and remote power stations, but concerns over the cost of hydrogen and its explosive nature have prevented the technology from being widely used.

Using urea — which is present in all animal and human urine — instead of hydrogen could be a low cost alternative to these super low-emission systems. Urea is a rich source of nitrogen and its removal at sewage plants is both energy-intensive and expensive.

Removing urea directly from urine offers a possible alternative for producing both clean water and electricity.

(Source: Inhabitat)

Ofgem Getting Tough

Posted by: Adrian Burton

As reported by Robert Preston of the BBC, Ofgem chief executive Alistair Buchanan is getting tough having declared ‘’There is a ‘profound loss of confidence in energy companies’’

Mr Buchanan believes that energy companies need to make the tariffs being offered easier to understand so that consumers are able to make comparisons.

Apparently since 2008 the number of tariffs available has grown from 180 to over 300 now currently in the market.

Ofgem further added The “big six” suppliers should also face more competition, this would be great but it is not easy for new suppliers to enter the market and actually be competitive against the main suppliers.

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