Posts

The Climate Change and Industry Minister, Claire Perry, confirmed today that the sale of the Green Investment Bank (GIB) to Macquarie Group Limited has now been completed.

New owner Macquarie has committed to the GIB’s target of leading £3 billion of investment in green energy projects over next 3 years.

The £2.3 billion deal ensures that all the taxpayer funding invested in GIB since its creation, including set-up costs, has been returned with a gain of approximately £186 million.

As well as fully meeting the government’s objectives, the deal secures the future of the GIB with an ambitious new owner committed to growing the business. The Edinburgh office will be home to a new revenue-generating business as well as providing services to the green energy portfolios of both Macquarie and GIB in the UK.

The government decided that moving it into the private sector now would free it from the constraints of public sector ownership allowing it to increase investment in our green infrastructure as we transition to a green economy. GIB’s independent Board supported the government’s decision to sell the business to Macquarie.

In order to build on the company’s success within the private sector, Macquarie and GIB have announced today that the company will now be known as the Green Investment Group (GIG) so that it will be able to make overseas investments.

Climate Change and Industry Minister Claire Perry said “We led the world in setting up the Green Investment Bank and it is now being copied by others. Now that it’s in the private sector, it will be able to operate on an international level to tackle the global challenge of climate change. It is also perfectly placed to help us finance green initiatives for our Clean Growth Plan and realise the commitments set out in the Paris Agreement.

The green ‘special share’ held by the Green Purposes Company Limited also comes into force now. Five independent trustees have the power to approve or reject any proposed changes to GIG’s green purposes in the future.

The government will continue to hold an interest in a portfolio of a small number of GIB’s existing green infrastructure investments. These assets will continue to be managed by GIB until they can be sold on in a way which returns best value for taxpayers’ money.

An independent review into the cost of energy led by Professor Dieter Helm CBE will recommend ways to keep energy prices as low as possible.

The review will consider the whole electricity supply chain – generation, transmission, distribution and supply.

An independent review into the cost of energy led by Professor Dieter Helm CBE will recommend ways to keep energy prices as low as possible as part of the Industrial Strategy, Business and Energy Secretary Greg Clark announced today.

Professor Dieter Helm, one of Britain’s leading energy experts, will look specifically at how the energy industry, government and regulators can keep the cost of electricity as low as possible, while ensuring the UK meets its domestic and international climate targets.

This ambitious review builds on the commitment made in the Industrial Strategy green paper and will consider the whole electricity supply chain – generation, transmission, distribution and supply. It will look for opportunities to reduce costs in each element and consider the implications of the changing demand for electricity, including the role of innovative technologies such as electric vehicles, storage, robotics and artificial intelligence.

The ambition is for the UK to have the lowest energy costs in Europe, for both households and businesses.

Business and Energy Secretary Greg Clark said “All homes and businesses rely on an affordable and secure energy supply and the government is upgrading our energy system to make it fit for the future. We want to ensure we continue to find the opportunities to keep energy costs as low as possible, while meeting our climate change targets, as part of the Industrial Strategy.

“The review will consider how we can take advantage of changes to our power system and new technologies to ensure clean, secure and affordable supplies over the coming decades. Professor Helm will bring invaluable expertise to the review, and I look forward to seeing his recommendations.

Professor Helm is one of Britain’s leading energy experts, a Professor of Economic Policy at the University of Oxford and a Fellow in Economics at New College Oxford, and a former member of the Council of Science and Technology, advising the UK Prime Minister from 2004 to 2007.

Professor Dieter Helm CBE added “I am delighted to take on this Review. The cost of energy always matters to households and companies, and especially now in these exceptional times, with huge investment requirements to meet the decarbonisation and security challenges ahead over the next decade and beyond. Digitalisation, electric transport and smart and decentralised systems offer great opportunities. It is imperative to do all this efficiently, to minimise the burdens. Making people and companies pay excessively for policy and market inefficiencies risks undermining the objectives themselves.

“My review will be independent and sort out the facts from the myths about the cost of energy, and make recommendations about how to more effectively achieve the overall objectives.”

The government is already taking action, and has asked the regulator to come forward with proposals to extend the price protection currently in place for some vulnerable energy consumers to more people on the poorest value tariffs. This builds on action taken to cap the price for 4 million pre-payment meter customers which came into force on 1 April 2017.

There are also a number of schemes in place to reduce energy bills by improving energy efficiency, such as the Energy Company Obligation which will upgrade 200,000 homes each year and help tackle fuel poverty. For business, the package of relief for energy intensive industries was worth £260 million last year and there are financial incentives to switch to cleaner fuels and processes.

This review will consider the electricity system as a whole and make recommendations on how to deliver affordable energy over the coming decades. It follows the plan set out in July by government and Ofgem for a smarter energy system and the commitment to ensure Britain’s energy costs are as low as possible.

Historical maritime buildings in the harbour of Wick in Caithness, Scotland, will be brought back into operation when renovated to act as the hub for one of the largest new offshore wind farms in the UK.

Work is well underway to build the £2.6 billion, 84 turbine offshore wind farm in the outer Moray Firth. Designed by world famous Scottish engineer Thomas Telford in 1807, the conservation of the onshore maritime buildings will play a key part in generating 588MW of sustainable energy from the wind farm to go into the grid.

Leading independent management, design and construction consultancy Pick Everard, based in Inverness and Glasgow, is part of the team who will be delivering the onshore aspects of the project alongside HRI/Munro Architects.

Pick Everard is delivering mechanical and engineering services for the £10 million land base which will service the windfarm commissioned by BOWL (Beatrice Offshore Windfarm Ltd). Once complete, the wind farm will power approximately 450,000 homes (around three times the number of homes in the Moray and Highland regions).

Doug Soutar, director at Pick Everard, said “This is such an exciting project to work on and one that is key in helping us to continue to deliver sustainable energy for the future.

“The onshore element of the project comprises the conservation, re-planning and part reconstruction of two blocks of the historic Old Pulteneytown area of Wick.
“These buildings are more than 200 years old and have a longstanding history of being used for maritime purposes. We are pleased to be helping to bring them back into service again following planning permission from the Highland Council.”

Wick has provided a safe haven for fishing, commercial, and leisure vessels for the last 150 years or so with the harbour consisting of three basins. The Inner and Outer Harbours are the main fishing and leisure berths, and the River Harbour is the commercial area.

Steve Wilson, senior project manager for SSE, added “Renovation of the iconic Thomas Telford buildings in Wick is well underway and has been progressing well. These buildings will become our long term Operations and Maintenance base for Beatrice Windfarm.

“These Thomas Telford buildings are a symbol of Wick’s industrial and marine past so we are really pleased to be utilising them and in doing so help continue that legacy. We’ve been very pleased with the support there has been in the area.”

The Beatrice wind farm will be operational in 2019. It is one of the largest private investments ever made in Scottish infrastructure, bringing economic and community benefits to the area. Beatrice will also create opportunities with job creations across the region, skills training, investment in Scottish ports and harbours, supply chain opportunities and community benefit funding.

There was much food for thought in the Queen’s speech, which took place today. Touching on key areas of our sector, on subjects such as housing skills, energy and infrastructure, the speech piqued the interest of construction professionals throughout. Buildingspecifier takes a look at what industry experts have to say in response:

Skills

The Government’s Immigration Bill must ensure that British business has access to sufficient levels of EU workers or major construction projects will grind to a halt, the Federation of Master Builders (FMB) has said in response to the Queen’s Speech.

Brian Berry, Chief Executive of the FMB, said “In terms of today’s Queen’s Speech and the focus of British business, all eyes are on the Immigration Bill. As suspected, we now know that the Bill will end the free movement of people but that begs the question: what will replace it? The Government has not set out what our post-Brexit immigration system will look like but it is crucial that key strategic industries, such as construction, are able to draw upon sufficient numbers of EU workers. EU tradespeople have come to play a crucial part in plugging the industry’s chronic skills gap and if the ability to employ non-UK workers is curtailed, the Government’s housing and infrastructure plans will be no more than a pipe dream.”

“Already, we’re starting to see a dramatic drop off in immigration from the kinds of countries that have typically supplied the construction sector with skilled talent. Statistics released today by Oxford University’s Migration Observatory show a 35% fall in the number of national insurance numbers being issued to nationals from the ‘EU8’ countries that joined the EU in 2004. A lack of certainty over what rights EU citizens will have in the country post-Brexit will undoubtedly be a factor behind this decline. Given the ongoing need to recruit from abroad, we need a clear message from the Government that non-UK skilled workers are welcome now, and will be welcome come what May.”

“The sector stands ready to work with MPs to shape the Immigration Bill into something that serves the economy and provides vital human resource to British business. The construction industry is also ready to significantly upscale the training and recruitment of UK construction workers so we welcome the recommitment to a proper industrial strategy and high skilled learning. In the longer term, being able to train more of our own workforce is without question part of the solution to our enduring skills deficit. Nevertheless, the Government must be pragmatic and introduce an immigration flexible system that allows skilled EU nationals to work in the UK with relative ease.”

Energy

Responding to the Queen’s Speech, RenewableUK’s Executive Director Emma Pinchbeck said “We welcome the Government’s commitment to a new modern Industrial Strategy. Wind, wave and tidal energy are new industries which are already creating highly-skilled, high-paid jobs, exporting around the world. Renewables can and should be the engine room of the Government’s flagship Industrial Strategy, driving our low-carbon economy.

“The need to reduce energy bills for consumers was also rightly highlighted in the Queen’s Speech. Renewable energy technologies are making record-breaking cost reductions, and clean energy tariffs are now competing with traditional low-cost tariffs to provide consumers with lower bills – we should continue this trend.

“It was important that the Government reaffirmed its strong support for action on climate change, including the implementation of the Paris Agreement. President Trump’s decision to turn his back on this has been greeted with bafflement and incomprehension in the US energy sector, as the global renewable energy market is worth $290 billion a year. The UK Government is showing leadership on energy policy and environmental issues which matter to the majority of the British public”.

Housing

Responding to today’s Queen’s Speech, Chartered Institute of Housing chief executive Terrie Alafat CBE said “We need an ambitious, long-term plan to tackle our housing crisis so it is encouraging to hear the government’s commitment to get more homes built and to bring forward the measures outlined in its housing white paper.

“But it’s not just about building more homes, it’s about building more affordable homes for people on lower incomes. We believe more investment is urgently needed in genuinely affordable homes to rent. Figures released this week revealed that the number of homes for social rent built with government funding dropped by 51 per cent in 2016/17. One of the new government’s priorities should be rebalancing the housing budget – affordable housing currently accounts for just 16 per cent of total direct investment.”

She added “CIH has been calling for a ban on letting agent fees so it’s good to see draft legislation being brought forward to tackle this issue.”

Terrie Alafat said the continuing uncertainty over the future funding of supported housing risks undermining government moves to provide appropriate services for our ageing population. She said “We are still waiting for the consultation on the government’s proposal to extend the Local Housing Allowance cap to supported housing, which is designed for people who need extra support, such as older people or people with a mental or physical disability. It’s absolutely vital that the government moves quickly on this issue. Supported housing schemes provide homes for some of the most vulnerable people in our society, and our ageing population means that demand is only increasing. We know that many supported housing providers will have put sites on hold while we wait for a decision on future funding and continuing uncertainty could be very damaging.”

Infrastructure

Richard Threlfall, KPMG’s UK Head of Infrastructure, Building and Construction comments “This is a critical investment that will enable Britain to build the infrastructure needed to rebalance our country’s economic wealth.

“Today’s announcement connects more of our major cities to a high speed rail network, and takes us a step closer to creating a Northern Powerhouse.

“The commitment recognises the dismal state of links between the heart of the UK and its Northern cities today. This should finally turn the tide and help the North regain its historic prominence in the UK economy.

“Government, local political and business leaders now need to come together and develop the connectivity that HS2 offers into an overall vision for the development of the North.
“The objective is clear – a vibrant, successful and integrated northern economy that our children will be proud to inherit. Today’s announcement brings us an important step closer to that.”

Constructive discussions between employers at Hinkley Point C and Unite the union have resulted in an interim agreement over the payment of bonuses during the construction of the power station.

All parties have agreed to take part in a collective differences panel that will seek to identify an agreeable long-term settlement of the bonus issue.
As part of the agreement, interim bonus payments will apply until the end of August 2017 and will be linked to safe and collaborative working on site. The total bonus to be paid on this basis is as follows: working supervisor and craft grades £4 an hour, skilled worker grades £3 per hour and general workers £2 an hour.

The interim payments were agreed by representatives of EDF Energy (the client), BYLOR (the Tier 1 contractor comprising Laing O’Rourke and Bouygues TP), the Kier-Bam joint venture (who are undertaking the enabling works) and Unite the union.

As part of the agreement, the previously approved Civil Engineering Sector Agreement (CESA) for the project, which governs pay and conditions, will be fully implemented with effect from 1 June 2017, including the interim bonus arrangements.

The collective differences panel, which will consist of a senior Unite full time official and a senior EDF Energy executive, will thoroughly examine the matter of bonuses.

The panel will seek to identify appropriate permanent bonus arrangements that are agreeable to all parties and is scheduled to deliver its recommendations on productivity/milestones bonus payments by August.

As part of the agreement, no industrial action will be considered while these interim arrangements are in place or until the collective differences procedure has been exhausted.

Nigel Cann, EDF Energy’s Programme and Construction Delivery Director for Hinkley Point C, said “We are proud about the ‘best in class’ nature of the overall package for the Hinkley Point C civil workforce.

“We have created great facilities, an opportunity to develop and a very competitive reward structure.

“We are pleased that these interim arrangements allow constructive dialogue to continue to finalise this important agreement.

“Unite the Union has been a constructive partner in the discussions to date and I look forward to this continuing throughout the construction of the Hinkley Point C power station.”

Unite acting national officer for construction Jerry Swain, said: “I am pleased that following consultation with our stewards and members that we along with the various parties have been able to agree a clear path forward and that the prospect of industrial action, which is always a last resort, can be taken off the agenda in order to allow the ‘Differences Panel’ to deliberate.

“The work undertaken by EDF Energy in ensuring that all parties signed up to the interim agreement has been crucial in providing a breathing space and creating the opportunity for a long-term solution being agreed to finally resolve this matter.”

Many existing, new and retrofitted buildings exhibit large gaps between design aspirations and in use performance. To meet policy objectives and meet the needs of building owners and occupants, in-use performance needs to improve rapidly and radically. Ambitious new start-up organisation, The Building Performance Network (BPN) hopes to influence change in policy, procurement and practice, both politically and technically across the UK and global Construction markets.

Whilst many people are now aware of performance gaps for energy use and CO2 emissions, fewer people are aware that issues are also evident in technical performance, occupant satisfaction, operating costs, environmental impact and importantly the health of the occupants.

Data is the key to understanding whether we are making the right choices throughout the lifecycle of the building. The UK suffers from a disjointed building performance evaluation sector, where data are inaccessible, study methods are not clear or shared, and decisions are often made on poor or limited data.

The Building Performance Network (BPN) will be an independent not for profit organisation, operating in all building related sectors. It will work to bring together individuals and organisations with an interest in improving building performance in operation. It is founded on the principles of integrity and robustness to ensure that it remains credible and authoritative. It is open to all, not just the existing Building Performance Evaluation industry.

The BPN has the following key objectives:

  • Bring people together with an interest in building performance
  • Understand how building performance data is collected and analysed to ensure members have reliable data on which to base their decisions
  • Move forward the practice of building performance evaluation to make it accurate and useable for the sector
  • Share and make members aware of a wide range of studies undertaken in the UK, creating a data-sharing platform to move the building performance agenda forward
  • Use data to influence change in policy, procurement and practice

The BPN is founded on the principle that participation should be open for all and that the member organisation has an interest in the performance of buildings in-use. It is constituted as an independent, non-profit organisation, which requires some core funding.

Members will be a part of an exclusive collective group of expert organisations shaping the building performance landscape and be seen as a credible collaborator by Government and other organisations with an interest in this field. If you want to support engagement with government in a unified industry approach, have a say in what is proposed as industry standards and enjoy a host of annual benefits then click here to find out how you can become part of this ambitious and fast growing organisation: http://building-performance.network/

Download the prospectus here.

A few details from a draft version of Labour’s upcoming manifesto have been leaked. What does it say about construction, house building and infrastructure? Buildingspecifier.com investigates:

Energy

The leaked data highlights plans to bring parts of the energy industry into public ownership and introduce a local, socially owned energy firm in every area. Also introduce an “immediate emergency price cap” to make sure dual fuel bills stay below £1,000 a year.

Infrastructure

As well as nationalising the railways, Corbyn proposes to borrow £250bn to invest in infrastructure but stick to the fiscal credibility rule to balance day-to-day spending. He also plans to complete HS2 from London to Birmingham, Leeds, Manchester and Scotland.

Housebuilding

The draft includes a target for tackling the housing shortage, suggesting that we build 100,000 new council houses per year. Additionally, Labour would see the homes of disabled veterans insulated for free.

Skills

In a bid to tackle the skills gap without jeopardising the potential for attracting home-grown talent, the draft manifesto urges us to recognise the benefit that immigrants have brought to our industry but also introduces fair rules and reasonable management. Corbyn promises to work with employers that need to recruit from abroad but emphasises the need to prevent exploitation.

Limescale can be a major contributor to a loss of efficiencies for water heating systems of any type, so leading continuous flow water heater manufacturer Rinnai has taken steps to maintain superior efficiencies throughout the life of the system by incorporating a proven limescale inhibitor that will significantly reduce the impact of limescale, thereby maximising efficiency over the product’s lifetime.

Rinnai has teamed up with electrolytic in line inhibitors, pioneers in limescale inhibitor technology, to maximise system efficiency on its range of A rated commercial water heaters.
This electrolytic scale inhibitor kit is for commercial hot water systems. Independently tested, it is a low-maintenance way to protect against the damaging and expensive impact of limescale on hot water systems.

Not only does it offer long lasting protection against the formation of hard limescale it also ensures bacteria has fewer places to hide as a result of cleaner surfaces, so in a secondary return DHW system the problem of Legionella is also heavily reduced. The independently tested and proven technology protects capital investment and occupier health.

The electrolytic zinc anode technology used in this solution is mentioned in the Part L Building Services Compliance Guide, whereas “external to pipe” water conditioning techniques are not.

The system’s low level zinc additions change the water chemistry to inhibit the formation of limescale by transforming calcite in such a way that they do not stick to the interior of the unit or pipework.

The system delivers value engineering as it does not decay after dosing and its effectiveness is not impacted by water storage or agitation caused by passing through a booster set.

Rinnai has recently supplied its system efficiency systems for London-based SGA Consulting, a specialist in low energy buildings, after liaising with the practice’s mechanical engineer Vivek Devan on two restaurant projects. Devan says “The Rinnai units are compact and their smaller footprint both physically and environmentally made them a good choice here. The scale inhibitor technology was also a factor.” Devan spoke with Rinnai technical experts before specifying the units and heard that Rinnai is actively promoting and selling scale inhibitor solutions following the successful results obtained from various trial sites.

The electrolytic unit may be installed in the rising main, before the water heater and booster set. Capex cost savings are probable because the rising main pipe size is often a smaller diameter than the hot and cold water distribution pipe sizes. Therefore, just one inhibitor system will treat the whole location, also offering an attractive value engineering opportunity.

The inhibitor is widely specified and installed in a range of sectors such as manufacturing, hotels, retail and supermarkets, healthcare and education as well as public authorities.

For buildings using BMS systems, a Pulse Splitter is an option that provides water flow rate or water usage data directly to the BMS from the water meter in the system.

The inclusion of the electrolytic system in Rinnai’s A-rated continuous flow water heating systems delivers peace of mind to installers and end users as performance is maintained throughout the lifetime of the appliances.

The scale protection units are available in a variety of pipe sizes – large 67,76 and 108mm; medium 28,35,42 and 54mm; and small 22mm.

For more information on the RINNAI product range visit www.rinnaiuk.com.

Construction of the first grid-scale electricity storage facility to be built in Britain for more than 30 years could begin as early as 2018 following today’s granting of planning permission for the scheme.

Developer Snowdonia Pumped Hydro (SPH) has been given the go-ahead by the UK government to turn two abandoned slate quarries at Glyn Rhonwy near Llanberis in North Wales into water reservoirs that will store some 700 MWhs of electricity—sufficient to supply 200,000 homes with electricity for seven hours a day over a projected operational lifetime of 125 years or more.

The GBP 160m facility will use surplus electricity, for example from wind and solar sources, to pump water through an underground tunnel from the lower to the upper reservoir. When lack of wind or sunshine reduces renewable power output, or when fossil fuel generators fail to start, the water will flow back down the tunnel, spinning a turbine in an underground chamber to regenerate the stored electricity at a power output of 99.9 MW.

The only visible evidence of the pumped hydro storage facility will be a modest building on an industrial park, and two reservoirs contained by slate dams blending with existing slate tips, whose water levels silently rise and fall each day.

The UK currently has four pumped hydro storage sites, the youngest of which was built with taxpayers’ money more than 30 years ago. SPH is seeking private equity funds to build the Glyn Rhonwy scheme without public money.

Pumped hydro provides over 90% of the world’s electricity storage, and countries including the US, South Africa, Australia and China are among those expanding their national pumped hydro fleets as they seek to balance the intermittency of wind and solar.

In Britain it was thought that only a limited number of mountainous areas were suitable for pumped hydro sites, but SPH has shown energy civil servants how the UK could build some 50 GWh of pumped hydro storage using unconventional sites like ex-industrial quarries, coastal locations and existing drinking water reservoirs.

“There are signs that the government is taking storage seriously,” said SPH managing director Dave Holmes. “The National Infrastructure Commission last year urged swift action on storage, and a team inside the Department of Business, Energy and Industrial Strategy is looking urgently at how planning barriers and market disincentives to storage can be addressed. We see the grant of permission for our Glyn Rhonwy scheme as highly significant, signalling a real change that will enable the UK to meet carbon reduction targets, while keeping electricity supply secure and prices for consumers under control.”

Energy experts agree that as the percentage of intermittent renewable generation on Britain’s electricity grid continues to increase, a mix of storage types and technologies may be the optimum solution to ensure that electricity supply remains secure and affordable. These include long duration grid-scale storage such as pumped hydro, localised shorter duration storage provided by household or community batteries, complemented by demand reduction measures.

SPH has not sought to develop Lithium-ion batteries at grid-scale. Said Holmes. “Glyn Rhonwy can be expected to deliver around 32 million MWh over its lifetime. An equivalent 700 MWh Lithium-ion installation would deliver just 2.1million MWh before needing its batteries replacing. This means electricity delivered by pumped hydro is twenty times cheaper per MWh than Lithium-ion batteries over its lifetime, and carries less environmental baggage.”

The Glyn Rhonwy facility is expected to bring a significant economic boost to North Wales, supporting hundreds of jobs during the construction phase and creating up to 30 high quality full time local positions to operate the site for its 125 years or more service lifetime.

Activity in the offshore windfarm sector reached a record high in 2016, as the total construction value for projects reached £4.1 billion, increasing from £2.45 billion in 2015.

According to the latest data from construction industry analysts Barbour ABI, offshore windfarms alone accounted for 42 per cent of UK construction contract value in the utilities and power sector and 21 per cent of the entire infrastructure sector. This trend is likely to continue with the pipeline for future offshore wind developments looking healthy, with Barbour ABI reporting that £23.2 billion pounds worth of construction contract value is in planning.

Offshore

Three major projects that made a significant difference to the increase in construction contract value for offshore wind farms in 2016 were the Beatrice, Galloper and East Anglia one offshore wind farm projects, together worth a combined £3 billion pounds, which once constructed will produce over 1,600 MW of renewable energy per hour.

Commenting on the figures, Michael Dall, lead economist at Barbour ABI, said: “Back in 2013 offshore windfarms accounted for only 7.5 per cent of the annual construction value for the utilities and power sector, which increased to 42 per cent in 2016, on the back of significant investment in this type of project.

“With reports showing that the cost of producing electricity in this way have fallen significantly, the increase in construction value makes sense.”

“We have also seen a large uptake in the planning pipeline for future offshore windfarms with £23.2 billion worth of construction planned over the coming years, suggesting this burgeoning sector will continue to expand in 2017 and beyond.