Blue NG inconsistencies, misinformation and spin

April 2009

1. Sustainable Biofuels?

In the course of 12 months, Blue NG has made statements saying firstly it will source palm oil, jatropha oil and rapeseed oil from Malaysia, Brazil, the US and the EU, then that they will source only within 50 miles of London, then that they will try to use local and domestic vegetable oil but may import any biofuels subject to ‘internationally recognised certification’ (which would include palm oil). To this date, Blue NG has not made any binding commitments not to use a particular type of vegetable oil (e.g. palm oil) or not to source biofuels from any particular country.

+ March 2008: Blue NG’s first planning application, to London Borough of Newham, states that they would use palm oil, jatropha oil and rapeseed oil from Malaysia, Brazil, the US and the EU.

+ May/June 2008:

- The report by the Newham planning department still says: “Blue-Ng have stated that the biofuels are likely to be imported from E.U countries as well as from Malaysia, India, Brazil and US. The original source of the biofuel is yet to be determined and finalised. The sourcing of the fuel will be achieved through various certification bodies including Assured Combinable Crops Scheme (ACCS) and the Linking Environment And Farming (LEAF) organisation” (LBN Planning Report 4 June 2008 Application Number: 08/00460/LTGDC, para 4.10)

- Prior to the two planning hearings about the Newham/Beckton application, Blue NG indicates that what they said in the planning application with regards to sourcing was out of date. They release a ‘Biomass Procurement Policy’ (copy available on request from Food not Fuel or Biofuelwatch). This contains a series of very general rather than concrete statements about ‘sustainability’. Human and land rights and the right to food appear to not figure in their definition of ‘sustainability’. The statement says that biofuels would only be sourced from “land that has been historically cultivated for arable crops” – disregarding all concerns about the food crisis. According to the ‘policy’ “It is likely that our procurement will be limited to the UK and the European Union for the foreseeable future in order to meet the above criteria.” This wording would not actually preclude imports.

- Biofuelwatch writes to the company to enquire whether they will commit themselves in writing to not using palm oil. There is no response to this request.

- At the planning hearings for the application to LB of Newham, Blue NG refers to their intention to use ‘second generation biofuels’ in future. This claim, which is still on the company website, is implausible. Second generation biofuels are liquid biofuels made from wood or other solid biomass. It takes a lot of energy to refine wood into liquids and it would make no economic sense to do that for a power plant, given that the wood could just be burnt far more efficiently. If it were done, it would require completely different plants from the ones Blue NG is planning.

+ The company then puts up an even more general and non-committing statement about biofuel/biomass procurement on their website: . In this, they claim both that their ‘bioliquids sourcing policy has been developed in consultation with environmental NGOs” and that they are still “developing sustainability criteria using advice from external auditors, environmental bodies, NGO’s and Government agencies.” Yet no such policy has been published or submitted to any of the relevant panning authorities.

+ January 2009:

- A Guardian article by Hands, dated 3rd January 2009

( states that, according to Andrew Mercer, CEO of Blue NG, “the CHP engine would run on vegetable oil squeezed from local rapeseed, though 2OC is experimenting with other fuels, such as synthetic oil made from wood”. There is a small number of companies involved in second generation biofuel research and 2OC are not known to be amongst them, nor does their website suggest that they are.

- The planning authority ultimately responsible for the decision on the Newham/Beckton application, the London Thames Gateway Development Corporation (LTGDC) enters into a legally binding agreement with Blue NG which says that they must submit and agree a procurement policy before they can open the plant. As of April 2009, according to the LTGDC planning department, no procurement policy has been submitted.

- On the BBC London TV programme ( about the Newham/Beckton plant Blue NG say that the fuel will be sourced from within 50miles of London.

+ March 2009: Forum for the Future publish an article about Blue NG in their Green Futures magazine ( ). This states: Mercer confirmed that Blue-NG has signed what he called a “green handcuffs” agreement with the Greater London Authority, committing it to using sustainably sourced crops. “For our first two sites, vegetable oil will be sourced, grown, crushed and driven around within 50 miles of London” . The Greater London Authority subsequently confirms verbally that such an agreement does not exist.

+ In their most recent planning application to Ealing LBC, Blue NG says they intend to use local or domestic rapeseed oil but may use imports provided those are accredited through ‘internationally recognised certification’. This wording covers palm oil certified by the RSPO – a certification scheme which many NGOs, including Greenpeace, have condemned as not addressing deforestation, accelerated climate change, evictions of communities and other serious impact. Just as they did in June 2008, Blue NG speak about developing a sourcing policy with NGOs, but don’t show that such a policy exists.

2. Geo-Pressure?

Blue NG has by accident or design, allowed outsiders to assume that some proportion of their electricity generation comes from the ‘free energy’ available as a by-product of the Gas Pressure Reduction Process performed at 2000 national Grid sites around the country. This is commonly known as Geo-Pressure, although it appears that so far there is only one small demonstration plant which uses that technology, and that is in France.

+ March 2008:

Blue NG claims in their “Statement of Community Involvement” submitted with the Beckton planning application, that they had been given ‘pre-accreditation’ by DBERR for their electricity to qualify for Renewable Obligation Certificates in 2006.They state that getting ROCs – a taxpayer subsidy was a key part of their business plan. Subsequently they learn that DBERR was going to deny them accreditation. Blue NG then mounts a campaign, enlisting the support of big NGO’s, Jonathan Porritt, and The Climate Group etc to get DBERR to grant them accreditation. Nowhere in this Community Involvement document does Blue NG state whether the ROC pre-accreditation was for geo-pressure generated electricity or for biofuel generated electricity. However, buried away towards the end in a section covering the involvement with local Beckton MP Stephen Timms is this statement:

“Although the initial plans for Beckton outlined to Mr Timms were based on pure geo-pressure technology, subsequent site evaluations have deemed this not possible. Hence the current plans for a new form of Combined heat and Intelligent Power (CHiP) technology.”

+ June 2008:

Prior to the two planning hearings regarding the Newham/Beckton application, the planning officers’ report clarifies that no geo-pressure was involved:

“The applicant has also stated that the proposed development will not utilize geo-pressure. The proposal will utilise the combustion of sustainable crude vegetable oils to directly generate electricity. The process will then utilize highly efficient heat recovery systems to generate further electricity.”

(LBN Planning Report 4 June 2008 Application Number: 08/00460/LTGDC, para 6.4.6)

Yet during the LTGDC planning committee meeting on 12 June 2008, Blue NG provided a letter of support from Greenpeace, which the LTGDC planning officer Stephen Allen recorded as follows:

“The applicant has provided a letter from the Executive Director of Greenpeace UK, John Sauven who indicates his support for the proposal, namely the use of gas pressure reduction technique of electricity generation and the use of raw vegetable oil as a fuel for generators…”

and

“Two additional letters of support have been received The first is a letter from Jonathon Porritt in his capacity as Founder Director o f Forum for the Future indicating support for the geo pressure initiatives within this application.”

In other words, Blue NG were still letting it be assumed that their scheme at Beckton was going to make use of the ‘free energy’ available from Geo-Pressure, three months after they had put into writing the opposite.

+ January 2009:

+ The 3rd January Guardian article by David Hands extols the potential of geo-pressure, and includes quotes from Andrew Mercer:

“Work to place small turbines inside the gas network will start later this year at Beckton in east London. This first scheme will produce 20MW by 2010 from the natural gas that rushes through the pipes…Andrew Mercer of company 2OC, which has developed the "geo-pressure" technology, said: ‘We're very lucky that somebody else has built this pipeline infrastructure. We can borrow it to produce renewable energy.’…2OC has teamed up with the National Grid, which owns most of the gas pipeline network in the UK, to build mini-power stations at eight letdown stations over the next few years. They will install devices called turbo expanders that generate electricity as the gas pressure is reduced. The turbines used are compact – 20cm in diameter – but can generate 1MW of electricity each.”

So in January 2009, Blue NG’s parent company 2OC and Blue NG’s CEO, Andrew Mercer were still briefing the mainstream media about their scheme to get clean electricity from Geo-Pressure, even though they had announced (somewhat covertly) 9 months previously that they were unable to use geo-pressure at Beckton.

+ March/April 2009:

- The second planning application for Southall/Ealing suggests, just as in the previous one, geo-pressure is probably not used, although the details published are vague.

- In an article published in the Sunday Times on 12th April ( reference is again made to geo-pressure and Andrew Mercer is quoted as saying:

“Power generated by natural gas pressure is available round the clock. It does not require wasteful base-load power to be standing by and it is responsive to demand.”

This suggests to readers that energy is directly produced from geo-pressure, yet in fact the energy comes from burning vegetable oil.

3. Combined Heat and Power

Blue NG plays up the ‘CHP’ description of its system. This builds credibility with local authority planning departments, with Government and with some NGOs. The most common definition of combined heat and power is that both electricity and heat will be supplied to properties (typically via district heating) or to industry. Yet no plans to supply heat to anybody else are included in either of the first two planning applications. Although heat will be used to prevent the gas pipework and valves in the Pressure Reduction Station from freezing (natural gas is currently used for this), calling this CHP stretches the definition to extremes.

+ March 2008:

- The Statement of Community Involvement submitted as part of their Beckton/Newham planning application makes references to this being part of the London Olympics development “..with the generation capacity to make the Games carbon neutral …” . Vague statements about supplying heat to properties are being made.

+ June 2008: In the Newham Planning Officers’ report from 4 June 2008, the Beckton power station is considered compliant with the London Plan Policy 4A.6 – Decentralised Energy. It does so solely on the grounds that a NEW development in the vicinity might in future be able to obtain heat as well as power from the plant, even though there are no immediate plans to supply any heat and there is no intention to connect the plant to existing buildings.

+ March/April 2009:

The new planning application to London Borough of Ealing again shows that only electricity will be supplied, even though the plant would be located adjacent to a brand new development, which on the face of it would be an ideal application for a district-heating scheme.

4. Misleading claims about campaigners:

In June 2008, Blue NG made a series of unfounded allegations about Biofuelwatch. A copy of the document which contains those allegations can be obtained by emailing Biofuelwatch. We understand that the document was sent to the London Borough of Newham planning office and to the media. The document claimed that

- Biofuelwatch had withdrawn its objection to the Newham/Beckton planning application, which was untrue;

- Biofuelwatch was planning to disrupt the Council’s planning hearing (which not only was untrue but would have been absurd given that a Biofuelwatch representative was speaking at the hearing)

- Biofuelwatch had harassed Blue NG’s CEO, Andrew Mercer: This was a third false allegation, given that the only contact between them had been phone calls initiated by Andrew Mercer as well as one email sent to the company by Biofuelwatch enquiring whether the company would or would not use palm oil.

5. Renewable Obligations Certificates

Blue NG has misled Newham LBC, the media and organisations that it has obtained endorsements from OFGEM that its electricity qualifies for Renewable Obligations Certificates (ROCs), i.e. it is considered ‘green’ by the UK Government.

According to OFGEM (Jan 2009, emails from Paul Branston) and the Department for Energy and Climate Change (12 February 2009 letter from Dr Elizabeth McDonnell), Blue NG has not been given full accreditation for electrical power generation. However, when the Beckton planning application was being considered in June 2008 by London Borough of Newham and London Thames Gateway Development Corporation (LTGDC), the planning officers’ reports recorded this comment:

“They [the Applicant] have also stated that the generation of electricity from the combustion of biomass, within which crude vegetable oil is defined, is designated and renewable under the UK Government Renewable Obligation Scheme.”

(LBN Planning Report 4 June 2008 Application Number: 08/00460/LTGDC, para 6.4.6))

However in OFGEM’s correspondence (Jan 2009) they say:

“Our environmental team have confirmed they have recently received an application for RO preliminary accreditation with regards to this project, and the review of the application is currently ongoing.”

This confirms that Blue NG was misleading Newham and LTGDC in June 2008 over ROCs – note the use of the wording ‘preliminary accreditation’ not final accreditation - and suggests that environmental concerns might be at issue. The absence of ROCs is not a reason for the planning authority to deny consent, however the statement would have given the impression that another authority was fully supporting the plans which could have given greater overall legitimacy to the application.

6. Other misleading statements

“Use of free cooling”

From Guardian 6 January 2008:

“Electricity may not be the only useful product of the turboexpander technology. Reducing the gas pressure also brings about a sudden drop in temperature, typically from 10C to -30C. Mercer calls this "free cold" and says it could be used as a cheap and green way to replace refrigeration units and air conditioning. He says 2OC is in talks with two companies that are interested in siting computer data centres, which require massive cooling, near UK letdown stations.The technology could also cool the London Underground network he claimed, though Transport for London has balked at the likely cost.Another use could be to provide cooling for giant concentrated solar power plants, which are gaining credibility as a future large-scale energy source. One plan is to site such plants in desert regions of north Africa, and to transport the electricity generated to Europe. Mercer says a lack of available cooling water could cripple such schemes. Siting solar plants near letdown stations, which are common in gas-rich North African countries and the Middle East, would halve the costs and double the electricity generated, he said.”

These claims are false. For the “free cold” to be of any effective use, the gas pressure reduction station would have to be located within at most a few hundred feet from the data centre, tube station or desert solar power plant. Regarding the last cliam, Mercer has had no discussions with Desertec-UK who promote the plans for solar power from deserts, and there is absolutely no evidence that his ‘free cold’ would halve the costs and double electricity production.