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  • Growth steady, but manufacturing still struggles

    A CBI growth indicator study has shown that while growth remains steady, momentum has slowed up. 748 companies from the manufacturing, retail and service sectors responded to the survey; it shows that as with other sectors the manufacturing industry is still affected by slow growth.

    The survey also revealed that expectations for the next quarter remain weak, but on a more positive note they are still above average.

    CBI Director of Economics Rain Newton-Smith stated:

    “Growth in the economy is steady this month, but momentum is slower than in the first half of the year.

    “Business and consumer services are stoking the economic fire, but while manufacturing has seen a modest improvement, firms in the sector are still expecting to see a fall in output.

    Newton-Smith added that the major risks to our economy came from beyond the UK; this is due to vulnerabilities in emerging markets and the possibility of volatile global markets.

    However, the PMI report from Markit showed an increase in exports for manufacturing in November, and while the sector continues to see moderate growth, it is the larger companies that are benefiting as opposed to the small and medium sized businesses.

    Rob Dobson, who is the Senior Economist at Market, said:

    “UK manufacturing is moving back into expansion mode during quarter four, as it starts to reverse the losses sustained in the prior quarter. Although the pace of growth so far is only very modest, it positions manufacturing as less of a drag on the broader economy.”

    Manufacturing Advisory Service

    The manufacturing sector was handed a blow on Friday, December 4th, when the government made the surprise announcement that it is to close the Manufacturing Advisory Service and the Growth Accelerator, which are all part of the government’s Business Growth Service.

    As part of the advisory service, manufacturers could get advice to help grow their business if they were based in the UK and had a turnover of less than £40 million; it helped to support manufacturers in a vast range of industries including the oil and gas, pharmaceuticals, food and chemical sectors.

    The decision to close the Business Growth Service was unexpected as it wasn’t announced as part of the spending review and some MPs, including Greg Mullholland, are calling for the decision to be reconsidered.

    Commenting on the decision, Baroness Lorely Burt stated:

    "The Manufacturing Advisory Service was a great asset to businesses, and an important part of the Industrial Strategy set up by Vince Cable.”

  • 30% take time off to deal with winter emergencies

    A new survey by British Gas has revealed that 30% of Britain’s have had to take time off sick, use holiday time, or have had to turn up to work late due to an  a home energy emergency such as a broken gas boiler or burst pipes.

    It is estimated that Britain’s take up to an average of 12 working days off to manage winter repairs to their gas heating system over a lifetime; 10% of those surveyed also stated they were concerned taking time off to deal with such problems could lead to them losing their job, missing out on a promotion or stop them from getting a pay rise.

    Moreover, the survey discovered it was residents in London that were more likely to take time off to deal with an emergency, with 44% stating  they had to take time off to cope with an unexpected emergency at home.

    The cost of emergencies

    In addition, electrical faults are another common reason for taking time off work with 21% of people forced to stay at home to deal with the problem, and it is estimated it costs £512 million a year in repairs.

    The survey also estimates UK workers can lose anything up to £100 in lost income and face average bills of £542 a time to repair winter damage.

    Commenting on the survey, Matthew Bateman, managing director at British Gas residential services, said:

     “The results of the research highlight that winter home emergencies can take a toll on people in terms of time and money, and worrying about how it impacts time away from their job. Every winter we increase the number of staff in our call centre teams so we have the resources ready to help customers who may be calling us with problems”.

    Prevent emergencies

    In order to help prevent household emergencies, British Gas advise householders to arrange regular checks of their boilers and bleeding the radiators. They also suggest insulating the gas pipes during the colder months and insulating the hot water tank.

    In addition, Chris Brain, a British Gas engineer from Canterbury, states:

    “This winter, frozen condensate pipes have been a big problem for customers with condensing boilers in colder areas of the country. Frozen pipes can result in damage to the boiler and even flooding, so people should ensure pipes on the outside of their home are wrapped with lagging, at the very least”.

  • 52 percent of Tory Voters in favour of Wind Farms

    A poll published in the Sunday Times shows more than half of Conservative voters think the government should do more to encourage onshore wind power.  52% of those surveyed said the building of wind farms should be encouraged, while 18% were against the building of more wind farms and thought they should be banned.

    The public in general are also in favour of the use of wind power according to the survey. 61% said that they would like to see more of the wind farms in the UK while 14% said that they would like to see a ban.

    Members of the public are also keen to see more offshore wind power, with 73% of people stating they would be in favour of more offshore wind power plants being built.

    When it came to other forms of energy production, there were mixed views on the extraction of shale gas with 43% against extracting shale and 32% in favour of it.

    Commenting in a press release, RenewableUK Chief Executive Maria McCaffery said:

    “Recent comments suggest that the Government is looking to restrict onshore wind as it’s concerned about the technology’s popularity. These poll results, and the many like them that have gone before, should provide reassurance that the majority of people, however they vote, want to see more onshore wind, and that any premature curtailment is not necessary.

    Indeed, as the Government has said it is committed to decarbonisation at the lowest cost, early curtailment would seem to directly contravene government objectives.”

    Queen’s Speech and Onshore Windfarms

    In the Queen’s Speech it was announced the new energy bill would mean decisions over smaller onshore wind farms that have a capacity of 50 MW will be decided by local authorities in England as opposed to a ministerial level.

    At the moment it is unclear whether this will also affect wind farms in Wales as a decision has not yet been made.

    Renewable energy organisations have expressed concerns that this could cause a delay in renewable energy projects and RenewableUK are calling on the government to give local authorities the additional resources local councils will need to make quick decisions.

    Maria McCaffery, Chief Executive of RenewableUK said

    “Onshore wind is committed to being a good neighbour to the local communities in which it is hosted, providing substantial economic advantages to the region including the ground-breaking community benefits it pays, so we are confident that Local Authorities should recognise the value of these projects.” 

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  • Consultation opens over new interconnectors

    Ofgem has opened up a consultation over plans for a number of new electricity interconnectors. If the proposals go ahead, Ofgem say they will be built by 2020 and will provide an increase of 3.4 GW of electricity.

    Ofgem states the new electricity interconnectors would help to create cheaper energy generation thus helping to reduce energy bills for customers in the UK; another benefit would be better energy security for the future, and it would help to boost Britain’s energy supply.

    As well as saving the consumer money, interconnectors, which allow electricity to flow between two different countries, can also help to reduce the carbonisation of energy, thus producing greener forms of energy supply.

    Commenting on the proposals, Martin Crouch, Ofgem’s senior partner for electricity transmission, said:

    “Ofgem is helping to deliver greater interconnection. These three interconnectors would further boost Britain’s energy security and reduce pressure on bills. To date, under our cap and floor regime, we are looking at adding around 5GW to Britain’s energy supply.”

    If the plans go ahead, Ofgem says the new interconnectors could offer up to £8 billion worth of benefits to consumers over a 25 year period.

    Four projects under consideration

    The proposals set out explain two of the interconnectors will connect Britain’s electricity system with France and the third one with Denmark

    The FAB project will link Britain and France via the island of Alderney; the project is under development by Transmission Investment and RTE.  If it goes ahead, the interconnector will produce 1.4 GW of electricity.

    The proposed IFA2 project will also establish a connection between Britain and France, but would only produce one gigawatt of electricity; this project is a collaboration between National Grid Interconnector Holdings and RTE.

    Also under consultation is the Viking project, which would mean a 1 GW interconnector transmission link between Denmark and Britain; this would be developed by NGIH and Danish company Energinet.dk.

    In addition, a fourth and final project, which is known as Greenlink, is being considered. The 500 MW interconnector would run between Ireland and Britain; this project would be developed by Element Power.

    Current Interconnections and Consultation

    Currently, there are four interconnectors in place between Great Britain and Europe; they are located in France, Ireland, the Netherlands and Northern Ireland; this produces 4 GW of electricity and accounts for 4% of Britain’s energy supply.

    The consultation will remain open until May 2, 2015.

  • Contracts for World’s biggest interconnector awarded

    Contracts worth €1.5 billion have been awarded to build an electricity link between England and Norway. When it is complete, the interconnector will be the longest in the world; NSN Link Limited gave the contracts to Nexans and Prysmian, who will be responsible for constructing the 740 km route.

    The England and Norway link will be the first time that two countries have shared a direct energy system; the project is a collaboration between the National Grid and Norwegian company Statnett SF.

    The cables will run from Blyth in Northumberland to Kvilldal in Norway. It will require almost 1500 km of cable to complete the project and there will also be a 10 km offshore route.

    Prysmian will be providing 950 km of the submarine and land cables; they will also be responsible for installing them. Prysmian will manufacture the cables in a factory in Naples and they will use a specially designed cable laying vessel, which is called the “Giulio Verne”.

    Nexans will be providing cabling for the Norwegian side of the connection; they will manufacture the cables in their Halden-based factory.

    Commenting on the project, Alan Foster, National Grid’s director of European Business Development, said

    “There is a huge programme of work for us to undertake over the next five years to deliver what will be the world’s longest interconnector.  Our contractors will have a big part to play in that successful delivery. But the benefits to both UK and Norway are also huge and when completed the link will deliver low carbon electricity for the UK and also add to security of supply for Norwegian consumers.”

    Håkon Borgen, Executive Vice President of Statnett, added that the project was vital for the future of the energy system in Europe.

    The licence that will allow the project to go ahead was first granted in 2013 when the Norwegian Ministry of Petroleum and Energy gave permission for the interconnector to be built. Preparation work at the site will begin in 2016 and will continue into 2017 when construction will get underway

    The link between the two countries will have numerous benefits including helping to provide a more secure power supply for both the UK and Norway, and the construction work will help to provide jobs. When the link has been finished it will have the capacity to produce 1400 MW of power.

    It is expected that the work would be completed in 2019 and the interconnector will be operational by 2020.

  • Didcot B repair work announced

    Npower has announced a programme of works to restore the Didcot B cooling tower, which was damaged as a result of a fire in October 2014.

    The energy company has been searching for contractors to undertake the project to repair the damage that was caused to module five of the Didcot B cooling tower in Oxfordshire. The search to find contractors took six months and Npower have now announced that SPX Cooling Technologies has been selected to complete the repair work.

    Cells 19 and 22 of the cooling tower were also damaged during the fire, but this was only minor. Npower states that they will be back in service in the summer of 2015 and cells 20 and 21, which received more extensive damage, should be restored and be back in use by September 2015.

    Work will also need to be completed to repair the fans of the cooling towers; it is expected that this work will be finished by December 2015.

    Due to damage that has been caused to the towers, Npower state that it will be necessary to rebuild the entirety of some units. However, components that weren’t so badly affected by the effects of the flames can be repaired.

    As well as employing outside contractors to do some of the work, the owners of Npower, RWE, will complete some of the repair work itself.

    Commenting on the repairs, the manager of the Didcot B power station said:

    ‘We are pleased to announce the project to repair the cooling tower of Module 5 has begun. The power station has been available to generate since the fire but the repairs will enable us to achieve a higher efficiency, and full station capacity as we approach the winter months.’

    ‘I would like to again thank the emergency services who worked alongside RWE teams to bring the fire under control quickly and safely.’

    The Didcot B power station fire made headline news in 2014. The BBC reported that 100 firefighters and 25 fire engines were called out to control the blaze. As a result of the fire, Npower said the station would need to be closed down for the foreseeable future while the repairs were carried out.

    The fire started in one of the Didcot B cooling station but soon spread to a number of the other towers.

    Following an investigation into the cause of the fire, Npower have since identified a fault within the fan unit, which the power company says started the blaze.

  • Exports stall for small and medium sized manufacturers

    While small and medium sized manufactures in the UK have announced new job opportunities, increased orders and more domestic orders, they are still struggling when it comes to exporting goods.

    According to the statistics from the CBI SME Trends Survey, domestic orders remained steady, but export orders show little sign of picking up. It is also predicted that domestic orders will continue to increase in the next quarter, but small and medium sized manufacturers remain pessimistic about the future for exporting.

    A quarter of the 426 businesses surveyed stated their exports increased, but 28 per cent said they have fallen. These statistics are the same as the last quarter and companies expect the export market to remain unchanged in the near future.

    Moreover, there was less optimism surrounding the future for exports in the coming year, and a number of firms expressed concerns over how the exports would be affected by political and economic conditions.

    Export Challenges

    There are several factors making exports a challenge for UK-based businesses. The increase in the Pound against the European currency means UK firms are less competitive, while the on-going financial problems in Greece are causing continued concern.

    Katja Hall, CBI Deputy Director-General, said:

    “Smaller manufacturers are reporting solid increases in output, orders and jobs. While growth was a little slower this quarter, they expect a pick-up in activity in the next three months.

    “However, prospects for exporting to the rest of Europe remain a concern. Sterling’s recent rises against the Euro may mean more money in the back-pocket of holidaymakers, but it makes it that bit tougher for British manufacturers to stay competitive and sell inside the Eurozone.

    “Business will also be keeping a close eye on how the Greek situation develops in the coming weeks.

    New Government

    However, with a new government about to be elected, firms are hopeful there will be a more concerted effort to develop a long-term export strategy for the future, and businesses hope that this will be adopted sooner rather than later, as the CBI makes it clear exports are key for helping to keep economic growth on track.

    Employment Prospects and Output

    Nevertheless, despite the continued negative outlook for exports, employment prospects are looking up. Job creation in the manufacturing sector continued in the last quarter and at better than average rates. Moreover, job creation is predicted to grow in the next three months as well.

    Output was also on the increase; this trend is expected to continue into the next quarter.

  • Government draws up draft regulations for fracking

    The Government has drawn up a set of draft regulations that set out which areas will be protected from underground fracking.

    The regulations also detail the additional protections that will be given to Areas of Outstanding Natural Beauty, World Heritage Sites, and National Parks etc.; when fracking is permitted in these areas, restrictions will be put in place to protect them.

    Despite this, environmental groups have reacted angrily to the announcement that areas such as National Parks could be used for fracking. However, in a statement, Energy Minister Andrea Leadsom said:

    “The UK has one of the best track records in the world when it comes to protecting our environment while also developing our industries – and we’ve brought that experience to bear on the shale gas protections.

    “We need more secure, home grown energy supplies, and shale gas and oil have a vital role to play – much better that we use what we have at home than relying on supplies from volatile foreign imports.

    Ms. Leadsom added that the fracking industry would be “developed safely with world class environmental protections, creating jobs and delivering better energy security while safeguarding of some of our most precious landscapes.”

    Task Force on Shale Gas

    The draft regulations from the Government come at the same time as the latest report from the Task Force on Shale Gas, which examines the possible health implications and environmental concerns that could be caused by the shale industry in the United Kingdom.

    In its report, the Task Force detailed a number of recommendations to make the fracking industry safer. This includes companies providing full details of the chemicals that are used as part of fracking and regular monitoring from the Environment Agency to ensure that chemicals are kept at safe levels.

    The Task Force also suggested that a National Advisory Committee should be formed so that data could be collected and monitored, making it possible to analyse any possible impact that fracking could have on health and the environment.

    Commenting on the report, Lord Chris Smith, who chairs the Task Force on Shale Gas concluded by saying that:

    “Only if the drilling is done properly and to the highest standard, and with rigorous regulation and monitoring, can shale gas fracking be done safely for local communities and the environment.”

    Fracking has long been used in the U.K, but it gained more prominence when proposals were announced to use the method to extract shale gas; efforts are already being stepped up by several communities to prevent fracking in their local areas.

  • Improved manufacturing performance in last quarter

    Manufacturing growth ended on a high in 2014, according to the latest figures from the British Chamber of Commerce; statistics from the Quarterly Economic Survey were positive news for the manufacturing industry following a period of slow growth in the sector.

    Nearly 7,000 companies were interviewed for the survey and the results showed a marked increase in growth for the last quarter in 2014. Analysts say that the strong performance of the last quarter is a good sign of continued economic growth throughout 2015, however, this will only be possible if U.K businesses get the support that they need from the government.

    Strong Growth and Job Creation

    The figures from the Chamber of Commerce show strong growth all round with an increase in domestic and turnover confidence. Export sales were also on the increase, however, they were still slow. According to the statistics, there was an increase in the number of firms investing in training in the last quarter of 2014, and an increased amount of manufacturing firms are now operating at full capacity. The figures are also good news for future job creation as many companies indicated that they intend to recruit new staff members and were actively searching for new employees.

    Commenting in a press release, John Longworth, Director General of the British Chamber of Commerce said:

    “British businesses are well placed to grow in 2015 – a testament to their hard-work and resilience. It is particularly pleasing to see the manufacturing sector bounce back, despite signs of a slowdown in recent months. However we must aim for growth that is sustainable for the long-term, rather than settle for second best.”

    “With employment and investment intentions at historically high levels, businesses are gearing up for a big year in 2015. It is now vitally important that firms are able to convert their growth ambitions into reality. Strengthening our business finance system, which constrains the growth aspirations of too many firms, will remain a decisive factor in securing a sustainable recovery. Low interest rates and reduced regulation will also go a long way to creating an environment that encourages enterprise and wealth creation.”

    Economic Recovery

    Despite the positive news, Longworth also added that the U.K. economic recovery still faced many challenges, and while businesses are “bouncing back” he warned that the economic recovery might face a set back “if political point scoring outweighs sound economic policies” Longworth also urged politicians from all parties to outline what they will do to make sure that business investment and growth continues over the long term.

  • Offshore wind industry adds more than 900m to economy

    New figures recently issued by RenewableUK shows that the offshore energy wind industry added £906 million to the UK economy in 2014.

    The latest statistics were compiled as part of a report conducted by BiGGAR Economics on behalf of RenewableUK.

    Benefits to Local Regions

    Local regions are also benefiting from the drive towards renewable forms of power generation. In Yorkshire and Humberside, 379MW of onshore wind is being used to help power more than two hundred thousand homes.

    Employers, manufacturers and consultants from the region are also benefiting from the trend towards green energy supply with local firms. The South West and East of the country were also beneficiaries of the offshore wind industry.

    Commenting on the figures, RenewableUK’s Chief Executive, Maria McCaffery, said,

     “The British onshore wind energy industry is adding over £900 million a year to the national economy, so the benefits to the UK are clear to see. This report also shows that £7 of every £10 spent on onshore wind projects is invested here in the UK. Onshore wind powers local economies, bringing £199 million of investment into the local communities that host wind farms and creating jobs across the supply chain. The industry is helping to propel Britain to a brighter, cleaner and more secure future – onshore wind is already the lowest cost of all low carbon options and is set to become the least cost form of all electricity within the next five years.

    Wind Power in Wales

    The figures published by RenewablesUK shows that Wales is likely to gain £799 million of economic benefit from onshore wind power over a lifetime. 559 megawatts of wind power is already being used; Mid Wales and South Wales are the most active in this area.

    Wind Power in Scotland

    Scotland has also benefited from the move towards green energy. Figures released by RenewableUK show that Scotland will gain £7bn worth of economic benefit over a lifetime due to onshore wind power.

    Scotland has been at the forefront of wind power and it has 4,918 megawatts of onshore wind power in use. This is enough to produce enough power for more than 2.5 million homes in Scotland.

    South Lanarkshire, the Highlands and the Scottish Borders are the areas using the most wind power, and Scottish companies such as Scottish Power Renewables, Natural Power and SSE are among those helping to facilitate the supply of wind power.

  • RWE inaugurates Germany wind farm

    As it continues with its commitment to greener forms of power generation, RWE has introduced the German-based Nordsee Os windfarm into its business. The windfarm is one of the biggest in Germany and has enough capacity to produce 295 Megawatts of energy. There are 48 wind turbines in the wind park, which bring power to 320,000 homes.

    RWE’s investment into the windfarm stands at more than €1 billion. An operation room situated in Heligoland will operate and manage the running of the windfarm and a control room has been set up to monitor the project. Moreover, an apartment block has been built for employees to stay while they work.

    It took more than 60 kilometres of undersea cable to make the installation possible and the installation vessels used in the project cover 137,000 nautical miles; each of the blades weighs more than 23 tonnes and measures over 60 m long. The turbines weigh 350 tonnes and they measure 160m in height.

    Commenting on the project, Peter Terium, CEO of RWE AG, said:

    “The expansion of renewable energy is one of our main growth areas and offshore wind energy will play a vital role. RWE will become the third largest player in the European offshore market this year. And we are growing further: In only one month’s time, we will be commissioning another wind farm, Gwynt y Môr, located off the coast of Wales.

    “We are developing and operating additional offshore projects alone and with partners in Germany, the UK and the Benelux region.”

    Hans Bünting, CEO of RWE Innogy, added:

    “At the end of this year, 40% of our power generation from renewables will already come from offshore power production. Thanks to the Nordsee Ost and Gwynt y Môr offshore wind farms our operating result will see double-digit growth."

    Further wind farms are in the development stages and when they are completed, they will be situated in the German North Sea. The wind farms will have an expanse of 150 km² and they will be able to produce 1000 MW of power.

    Gwynt y Môr windfarm

    RWE will introduce the Gwynt y Môr windfarm into its business in June 2015. The farm is located in Wales and it has the capacity to produce 576 MW of energy. The building of the windfarm has been carried out in conjunction with Siemens and other partners.

  • UK businesses Support changes to Renewables obligations

    Research conducted by Npower business solutions shows that UK-based businesses are largely in favour of the proposed new energy legislation regarding renewables obligations (RO) and feed in tariffs (FiT,) and they feel that it is likely the changes will have a positive effect on their business when they go ahead.

    The changes in legislation was announced in late 2015 as part of the government’s spending review. In the review, the government announced its intention to scrap the compensation scheme for RO/FiT and to introduce an exemption programme in its place. 51% of those surveyed stated that they were in favour of the exemption scheme and plans to backdate compensation as they felt it would enable their businesses to remain competitive.

    However, more than half of the manufacturers interviewed said that they were not aware of the government’s plans regarding Renewables Obligations and Feed in Tariffs, and the majority of retailers had not heard of the government’s proposals either.

    Review and Consultation

    A review into the proposals is scheduled to get under way later this year, and according to the research more than half of those surveyed said they would be interested in taking part during the consultation phase because of the impact the proposals could have on their business.

    Commenting on the plans, head of Npower Business Solutions, David Reed said:

     “The proposed exemption would represent good news for the businesses and sectors which are eligible. Making regulatory processes more transparent and more straightforward would reduce the burden on businesses and would provide them with greater clarity about their finances.

    “A majority of retailers and manufacturers we spoke to were not aware of the upcoming consultation. That’s why we’re working with the Government to host a round table event, to explain these upcoming changes to businesses and discuss the proposed benefits.”

    Renewables obligation and feed in tariffs explained

    The Renewables Obligation scheme is a measure that was introduced to ensure that electricity suppliers buy a percentage of their power from renewable energy suppliers, however, these charges have been steadily increasing due to a number of factors, including the surge in the number of renewable energy companies.

    The Feed in Tariff was an attempt to get UK-based businesses and homes to generate greener forms of energy themselves such as wind and hydro power; the suppliers get compensated for each kWh of energy that is generated. However, as with the Renewables Obligation scheme, the cost of the tariffs are continuing to increase because of the growing number of low carbon energy firms and a greater amount of green energy being generated.

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