STRIKING a balance between Britain's desire to increase the amount of energy derived from renewable sources, and protection of the wilderness and rural landscapes is not an easy one, and it is now set to a face additional pressure.
Ian Marchant, t
he chief executive of Scottish & Southern Energy, and a long-time critic of the planning process when it comes to developing wind farms, revealed yesterday that the company "wanted to find out" whether a desire for renewable energy would make it easier for it to get consent for more hydro-electricity projects.
He posed the question as Glendoe, the 100 megawatt station near Loch Ness – widely expected to be the last major Scottish hydro project – nears completion.
The dilemma is an inevitable consequence of the growth of wind farms, which for all of the positives, cannot solve the renewable issue in isolation. The problem with wind generation is very simple: when the wind drops, the supply stops.
There are other forms of electricity which can complement this by having capacity on demand, but it is not as simple as one might think.
Nuclear plants, at least the current generation in Britain, take days or weeks from initial start-up to reach optimum operating level. The government has clearly signalled nuclear will form a greater part of the mix in the future, but a suitable complement to wind it is not.
Coal is more suitable in terms of flexibility, but less desirable from an environmental point of view.
By comparison, hydro is the renewable energy equivalent to giant batteries, with electricity able to be stored and released at relatively short notice. But the alternative is by no means one without a cost, and that is the very reason why Glendoe is the largest Scottish hydro project in half a century.
The John Muir Trust, a group dedicated to protecting the wilderness, immediately fired back at SSE's "desire". It argues against the policy, which would result in major civil construction projects in often fragile ecological areas.
But as contradictory as the argument appears, the UK cannot have it both ways. If wind is to play a major part in the future, a genuinely clearer energy mix, something has to give.
AFTER the spectacular failure of Northern Rock, how the Financial Services Authority was planning to pass the buck was difficult to predict.
In the end they didn't bother. An internal report on the fiasco, released yesterday, admitted the FSA demonstrated "a lack of adequate oversight" at the bank, while chief executive Hector Sants said it was clear the supervision of the Rock was "not carried out to a standard that is acceptable".
While apparently mild in nature, these confessions are the bureaucratic equivalent of self-flagellation.
And there is plenty of justification for it. The same regulator charged with monitoring and assessing the health of the business model was apparently not even keeping minutes of official meetings. Senior staff were too busy working on the demutualisation of Standard Life and the battle for ABN Amro to ensure that the required monitoring was taking place.
Ultimately blame was passed back to Northern Rock's management, which is perfectly fair, but if this is the watchdog of Britain's apparently great financial services sector, it is hard to escape the conclusion that changes must be made.
CENTRAL bank "supremos" didn't do empathy. Or sympathy. Or any other kind of "athy" that involves showing a softer, caring side, writes Peter McMahon.
Their job description required them to be hard, uncompromising, stern, unbending.
Or that is how it used to be until sub-prime, the credit crunch, Northern Rock, Bear Stearns and all the rest.
In the face of what looked like the Marxists' long-predicted crisis of capitalism, central bankers buckled.
Over in the USA the Fed began slashing interest rates and pumping money into the system.
Europe's central bankers followed, offering injections of large sums of euros.
But in the UK, it was rather different. Mervyn King, the Bank of England guv'nor, proved not to be so flexible.
To the chagrin of the banks, whom he met last week, he refused to be as generous as his US and continental cousins.
Yesterday, in front of the Commons Treasury committee, he did promise further assistance to help restore confidence. This could mean some more dosh for inter-bank lending, and perhaps to oil the liquidity wheels. But it would not, repeat not, mean bailing out the banks.
The Old Lady was not for turning. Risk relating to losses on lending was a matter for the banks and their shareholders.
In his understated way, the Governor had a message that the big five may not like. Whether it is fair or not, putting it crudely it was this: you got us into this mess, you get us out.
Fortune's Nordic link is Absolut
RUMOUR OF THE DAY
US FIRM Fortune Brands has teamed up with private equity group Nordic Capital in its bid to buy Absolut Vodka maker Vin & Sprit VSG.UL from the Swedish state, sources have claimed.
The source confirmed a report in Sweden's Svenska Dagbladet newspaper which said Fortune Brands and Stockholm-based Nordic Capital intended to split V&S between them.
Fortune Brands will keep premium vodka brand Absolut and Nordic Capital will take over business areas Distillers and Wines, a smaller part of the company, the paper wrote, citing unnamed sources close to the process.
The source said: "It is logical that a big player teams up with someone who can take on the remaining part (of the business], and who has a Nordic connection."
Dana sees share recover continue but Melrose dips on first day in FTSE-250
SCOTS STOCKS
DANA Petroleum continued its strong recovery from last week's falls, adding another 4.9 per cent to 1,178p. The Aberdeen-based firm fell 13.5 per cent last week as it appeared to move closer to bidding for Aim-listed Faroe Petroleum, but has risen around 10 per cent so far this week.
Melrose Resources, meanwhile, dropped another 6.6 per cent to 300p on the day it entered the FTSE-250 for the first time. Cairn Energy, which faces ongoing rumours about the progress at a key Indian pipeline, added 9p to 2,686p.
Robert Wiseman Dairies, which is due to provide a trading statement today, continued its downward move, dropping 1.4 per cent to 427.75p, after sliding 9 per cent on Tuesday.
Thus, the Glasgow-based telecommunications provider, retreated 2.75p to 118.25p despite announcing a contract win with clothing retailer, White Stuff.
Dawson International, the Kinross-based textiles company, dropped to a new low of 1.75p, down 12.5 per cent. The Aim-listed group has been in talks with a Chinese company for months but investors appear to be growing weary on the lack of tangible progress.
Also falling was Dobbies Garden Centres, down 50p to 1,287.5p, after dropping 100p on Tuesday.
TOPPS TILES
114.75p -8p
Broker says HOLD
ABN Amro has rated Topps a "hold" and cut its expectations for full-year profits, warning it may be the first of other downgrades to come.
The broker said it forecast profits of £35.5 million, down from £40.2m previously..
It said: "Additionally, as the first downgrade for the group and given the housing market and economic back drop, the fear must be that this is the first of more to come."
ONE TO WATCH
Ricardo
338p -17p
Broker says HOLD
RICARDO provides technical and strategic consultancy for a variety of industry customers but particularly the automotive sector. It has an international trading profile but with emphasis on the US and Asia.
Controlling carbon emissions is becoming a global mantra. Even the US, not widely regarded as being in the vanguard of environmental evangelists, saw, in December, the US president pause from his plans for global domination to sign the Energy Independence and Security Act. This has the ambitious target of improving fuel economy on American gas guzzlers by 40 per cent. The European Commission has also adopted measures to tackle emissions on new cars.
Ricardo has developed hybrid vehicle systems with a more efficient and cleaner fuel process. Ricardo's order book increased by a quarter in the second half of last year and, as a result, there is more potential in rapidly growing regions such as India and Russia.
Ricardo has had its problems in the past, notably in the US, but the chief executive, Dave Shemmans, and his team have been tackling these managerial shortcomings, which has coincided with the burgeoning opportunities as the demand for greater fuel efficiencies develops. True, Ricardo does not have the market to itself and, as a consultant, the barriers to entry are relatively small. Nevertheless, Ricardo has been building an impressive reputation which, arguably, is the most important dimension of its sort of business. Pre-tax profits this year should rise by over a fifth, which makes the PE of 15 undemanding.
• The value of your investment could fall and you may get back less than you invested. You should take professional advice if you have any doubt about the suitability of this company for your portfolio.
Cable & Wireless
141.9p +3.1p
Broker says HOLD
UBS has upgraded Cable and Wireless to "neutral" from "sell" but cut its price target to 140p from 150p after shares in the telecommunications giant lost a quarter of their value this year.
The broker said the company's five-year guidance for Europe, Asia and the US suggested revenue growth of 5 per cent to 8 per cent a year.
However, UBS's own forecasts for the company were much lower than the company's own at 2 per cent.
Hochschild
430.25p +19p
Broker says HOLD
JP MORGAN has cut its rating on Hochshild Mining to "neutral" from "overweight" and trimmed its price target to 435p from 439p, saying the Latin American-focused precious metal specialist's valuation looks full.
However, JPM said Hochshild's share price was likely to be supported by strong gold and silver prices in the short term.
Downside risks are limited, the broker said, though these included disappointments with new mine projects and a drop in metal prices.
Nationwide Accident repair the damage with profits
SMALL BUT BEAUTIFUL
NATIONWIDE Accident has edged ahead after the crash repair specialist boosted full year profit and said it remained confident of prospects following a positive start to 2008.
Profit before non-recurring items, which occurred in 2006 only, rose 15 per cent in the year ended 31 December 2007 to £6.8m on revenue, up a touch to £151.9m from £151.2m.
The group, which has a market cap of £55.88m, said lost volumes as a result of its decision to let a £20m contract lapse due to unattractive commercial terms have been more than replaced by contract wins from new and existing customers.
Chairman Michael Marx said: "We believe that our business is well placed to benefit from market consolidation both by acquiring bodyshops where appropriate and also by taking advantage of opportunities to win additional volumes from insurers consolidating their repair base."
He added: "The board therefore remains confident in its business prospects."
The company said its final dividend will rise 15 per cent to 3p per share, making total for the year of 4.5p – up from 2.6p in 2006.
The full article contains 1910 words and appears in The Scotsman newspaper.
