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Conventional DECT (‘cordless’) phones consume about 2 watts when the battery is charged and 3 watts when charging. The large number in UK homes, all on 24 hours a day, means that even these low power usage figures have a measurable impact on UK emissions. Very approximately, cordless phones in the home add about half a million tonnes a year to UK emissions, or about 0.1% of the national total.

A saving of half of this would be useful. I was also interested in knowing whether the techniques used by BT to gain the claimed 50% saving could be transferred to other consumer electronics. Before making its claims about a 50% energy saving, I assumed that BT had done proper testing of existing phones and had carefully measured the energy consumption of new devices.

I was wrong. Here is the full text of an email interchange between a PR person at BT and me:

Dear XXXX

Thank you for this. (this refers to the BT newsletter announcing the new phones). Would it be possible to find out the expected electricity consumption, in use and on standby of the new range of DECT phones compared to the models you used as the base case? Apologies for the slightly nerdy question, but I am very interested to see how much electricity consumption you have been able to drive out of the devices.

Many thanks for any help

Chris Goodall

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Hi Chris

I have been in contact with my colleague and have been informed that the information you require is not available at the moment. The information is currently being worked out and as soon as it becomes available we will be able to update you.

I am sorry we are unable to assist on this occasion but please do not hesitate to contact us for any other enquiry.

Regards XXXX

So BT made very precise statements to the press and to industry analysts that were simply not backed up by the facts. It made extravagant claims about efficiency gains before it had bothered to do the research to check its assertions.

If BT had made similar statements about financial matters, it would have had a legal obligation to ensure basic truthfulness. It doesn’t appear to believe it should extend this rule to boasts about its performance as a good corporate citizen.

BT’s behaviour has something of a disappointing pattern. I made similar inquiries in October last year, asking about BT’s announced plans to install wind turbines at some of its exchanges. In particular, I asked whether the company had checked to ensure that transmission capacity would be available from the local electricity distribution company. Since the sites were in remote areas with weak transmission infrastructure, this is a key question to ask. Eventually, after several rounds of correspondence, it appeared that no investigation of this issue had actually taken place.

BT uses a large amount of the UK’s electricity. Quite reasonably, it is therefore trying to position itself as a leader on climate change issues. But it is acting irresponsibly in making green claims that are not backed up by reasonable evidence.

One of the few co-operatively owned wind farms in the country has almost finished raising its funds. Investors have put up £3m to buy two existing turbines in the Fens. Locally owned wind farms should be encouraged as a cost effective means of cutting emissions.

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About 100,000 people in Denmark own shares in wind farms. Although most of the newest developments have been financed in conventional ways, the early growth of wind power was largely driven by cooperatives. Individuals bought their stake and receive income from their investment. The arc of 20 wind turbines that sits outside Copenhagen harbour is a good example: 8,000 investors own 50% of the venture with a local utility owning the rest.

The Danish example has been copied by a small number of wind farms in the UK. Two years ago, Westmill Wind Farm in Oxfordshire raised £5m to build a wind farm on a hilltop site in the west of the county. After the money was raised, Siemens, the equipment supplier, told the co-operative that it no longer had any turbines for sale, having committed all its output to the US market. Negotiations eventually resolved the issue and the wind farm is now being constructed. It has 2,400 shareholders, most of whom live within a 30-mile radius. Shareholders typically invested £2,000 each. Additional finance was provided by the Co-operative Bank.

In recent months another co-operatively owned wind farm has been raising cash. The closing date for the share offer is 30 November, but the business looks as though it has got the cash commitments that it needs. The Fenland Green Power Co-operative has the rights to buy two 2MW turbines that have already been constructed near Deeping St Nicholas in Lincolnshire. The rest of the wind farm is owned by EDF and these two turbines were promised to local investors as part of the package that got the planning permissions several years ago.

The economics of the venture make investment reasonably attractive to local investors:

• The risk is negligible. The turbines are already working, and have produced almost as much power as predicted before they were constructed. Modern turbines are extremely reliable and should need very little unplanned maintenance for the 25 years of their life.
• The two turbines should produce about 11,200MWh a year in total. If the energy were sold by an independent entity on the spot market, the current value of this would be about £500,000 a year. The Renewable Energy Certificates (ROCs) that the co-operative is entitled to will also be worth about £500,000, making a total of about £1m of revenue.
• Probably to assist with debt financing, the venture has gone a different route and has sold the ROCs and the power to EDF. Its actual revenue is likely to be about £750,000.
• Operating costs are low and the cash flow before interest is likely to be about £500,000 a year. About £200,000 is kept as a sinking fund to repay the investors at the end of 25 years.
• The total cost of the project is about £4.4m, of which £3m is being raised in equity. With the leverage from the bank loan, the cash return to investors will be over 10% within a few years.
• Shareholder investments will benefit from 20% EIS relief, raising the prospective return to investors to more than 15% per annum over the life of the project.
• The principal uncertainty is the price that is obtained for the power when the initial contract with EDF has finished in some years time.
• For an investment that has a highly predictable and secure cash flow, the returns to individual investors seem attractive and better, for example, than typical corporate bond issues.
• The return on the Fenland investment is likely to be slightly better than the UK average. The percentage of peak output achieved by the turbines has been about 32% compared to the UK average of around 28%. (A turbine has a maximum power, reached when the wind is high, but not so high that the turbine is closed down. 28% is the typical yearly output compared to the figure that would be reached if the turbine was operating at full power all the time.)

Local ownership and the impact on public opinion
Some of the antagonism to wind farms arises from the perception that they are owned by large remote companies with no interest in the area. A large part of the opposition can be defused if the local community is offered a chance to participate in the financial success of the venture. Boyndie Wind Farm in Aberdeenshire, Scotland is also partly owned by co-operative investors as a result of a deal with the local community when the farm was constructed.

Most surveys show that about 80% of the population favours wind farms. A figure of about 60% or slightly more would be happy to have turbines within view. This second figure means that a substantial fraction of the affected population is likely to oppose wind farm plans. If neighbourhood opinion-formers had a financial stake in a successful wind turbine, their opposition might be more muted.

The Westmill wind farm in Oxfordshire faced serious local opposition during the ten years or so it took to get through the planning process. As the first wind farm in the UK designed from inception as a local co-operative, Westmill was blazing a trail, and most local residents probably did not understand that it might eventually be possible to buy a share in the venture. Once the Westmill model (pushed by an organisation called Energy4All) is well understood around the country, it should help wind farm proposals through the planning process.

Government, companies, and co-operative wind farms
In his November speech on climate change (see this edition of Carbon Commentary), Gordon Brown talked about onshore wind farms. He seemed to suggest that the government would be sympathetic to any schemes that improved the local acceptability of turbines. Perhaps he was hinting that the government would do more to assist co-operatively owned wind projects.

BT has announced it will attempt to set up 120 wind turbines on its properties around the country (see Carbon Commentary Newsletter #4). Its chances of getting these ambitious plans approved would be significantly enhanced if it brought in local investors at each of its sites. It might even be able to reduce the overall cost of capital for its wind plans by using equity money from private individuals, who might be willing to invest with expected rates of return no greater than the cost of bank debt.

The cost per tonne of carbon dioxide saved is low for commercial wind farms. I calculate that the Fenland wind turbines will typically save a tonne of CO2 per £36 invested. This cost is higher than the £8 that climate care might charge, but far below the price needed to subsidise small-scale home renewables. In windy areas, large commercial wind turbines, funded by the local community, are the most effective means of cutting carbon emissions.

This is an impressively large plan. The cost is about £250m. The financial return will depend on how much of the electricity replaces power BT would have bought from other suppliers and how much is ‘exported’. Assuming very little is used by BT itself, the return will be approximately £50m a year, yielding a return of about 20% on the initial investment. These figures assume that BT gets a yield of about 28% of the rated capacity of the turbines, which is about the UK average.

These figures depend entirely on finding sites. I think that BT may well have substantial difficulties finding as many 120 places where it can capture enough wind to average 28%. Perhaps more importantly, at many of those sites which do have enough wind, I think it will have problems getting connections to the local distribution network. Two of the three initial sites identified by BT are in the Scottish Islands. Although a typical 2MW turbine is not a huge generator to add to the local network, the islands have quite limited electricity needs. Scottish and Southern may not easily be able to add these turbines to their network.

When I asked BT whether it had approached the local distribution companies to check on this point, I was not given an affirmative answer. This raises the possibility that BT announced these plans before detailed consideration of whether its aspirations are technically feasible. So it may be a great idea to erest wind turbines, but it looks like it will be much more difficult than BT realises. Companies like Ecotricity have been developing wind turbines on industrial sites for years. Though planning permission is easier, there are still huge obstacles to overcome. BT needs Ecotricity’s expertise immediately, but it will still struggle to meet its aspirations to grow its wind power capacity.