Electric cars

I see Australia is the latest country to start the switch to electric cars and wean its population off dependence on oil.

It follows Denmark and Israel’s lead.

New Zealand has already clinched a deal with Mitsubishi for a fleet of electric cars to be introduced in 2009. And in Japan, Japan Post is replacing its vehicles with electric equivalents.

In England, London has already been at the forefront of electric car usage and Boris Johnston has given a grant for the scheme to be extended across the boroughs of the city.

Now Brighton and Hove are planning a similar system. They successfully secured a £2.2 million grant from the EU for their project. Their 10 charging points will cost £30 000 altogether or £3000 each, quite a bit cheaper than the London counterparts.

The Australian model will be powered by renewable energy. The recharging stations will be powered by wind turbines.

Project Better Place will raise $1 billion to provide 250 000 recharging stations in the east of the country.

This works out at $4000 per recharging station.

Thats a lot cheaper than the £7000 it takes to install a recharging station in London, but I guess the price difference is down to the sheer massive scale of the Australian project.

The similar Danish system is also run by wind turbines. Around 20% of Denmark’s electricity production comes from wind, but the fact that the car batteries are traded in to charge – and they store electricity from the grid – with a number of batteries charging at any one time means that wind power can provide base load even when the wind is not blowing.

In fact, 2 million electric cars in circulation would provide Denmark with a standby capacity of electricity over 5 times its needs.

Project Better Place are in discussion with another 30 countries keen to implement the system. The mayor of San Francisco wants electric cars there.

The same company has already done the same in Israel.

Norway has about 50 recharging stations, but plans to have 400 on the go by 2011. The Norwegian Car company Think currently makes around 10 000 electric cars a year and can’t up with demand but does plan to open new factories to increase production.

Not to be left behind the Swedish Government are planning to provide a network of recharging stations across the country. It plans to be oil-independent by 2020.

The Finns seem to have taken a different approach. They have started a scheme where they convert your existing car to electric using lithium ion batteries. They claim that the top speed of your car will be a little less but the acceleration of the car will be better.

Even the Icelanders – slated by new Secretary of State for Scotland Jim Murphy as being in an ‘Arc of Insolvency’ – have just shook hands on a deal with Mitsubishi to fleet test their electric cars in the country in 2009, similar to the New Zealand deal.

Another country in Murphy’s ‘Arc of Insolvency’, Ireland, will shortly announce plans to have 10% of all its cars powered by electricity by 2020. Project Better Place are already in talks with the Irish Government. Its predicted around 50 000 jobs could be created in Ireland with the establishment of such eco-friendly policies.

So much for the environmentally aware Scandanavians and the forward thinking Irish in their Arc of Prosperity you might say. What about Scotland?

Until recently Scotland had only one electric car. That was a G-Wiz, the electric car much used in London, with a slightly dodgy safety record. It also had only one public recharging station, in the Braehead Shopping Centre.

Clydebank Housing Association has provided electric cars for its tenants at Radnor Park. They are recharged at the local power station that provides electricity for the flats.

Its been funded by a £37 000 Community Scotland grant.

The Department of Transport is also planning to pilot a ‘green van’ scheme in various locations in England from Newcastle, Gateshead, and Liverpool to Leeds and Coventry. In Scotland only Glasgow has been selected.

James May, of BBC’s Top Gear, is not a fan of the Westminster Government’s ‘green transport’ policy:

‘People think it’s about style or performance, but it’s down to the science. There has to be a hydrogen infrastructure in place to provide the energy to make electric vehicles work properly. We are nowhere near that point.’

Far from ‘kick-starting’ the revolution, May says the Government is simply ‘window-dressing’. ‘There’s a feeble bit of Congestion Charge relief if your drive an electric vehicle. This is no more a Green-vehicle strategy than my cat,’ he says.

Newer electric cars like the Smart Fortwo Electric can plug into a mains socket, has a top speed of 70 mph and can travel for 75 miles without a recharge.

The new Tesla Roadster is an electric sports car, assembled by Lotus. It can do 0 – 60 in 3.9 seconds and can travel 244 miles on a single charge of its battery. Of course it does cost 99 000 euros or around £84 000.

75% of Scots in a recent survey said they would consider changing to an alternative powered car if they became readily available.

The Scottish Government has planned a consultation exercise on electric cars this Autumn. But there are already calls for the SNP Government to try and get Project Better Place’s network in Scotland.

But if it doesn’t act soon Scotland could be the poor relation of Europe in electric car takeup.

Spain has announced a target of 1 million electric cars on its roads by 2014.

Germany is launching its own network of electric car recharging stations.

Portugal is also announcing its own network of recharging stations. It will build 1300 stations by 2011.

France has recently announced a $549 million investment in electric and hybrid cars.

With the SNP Government’s commitment to renewal energy surely the Danish model based on wind turbines is the way forward? The combination of providing much more base load than we need and have the rest exported, the reduction of carbon emissions and the prospect of being oil independent when the oil finally runs out must be the favourite way ahead.

Back to James May:

‘The wind blows, the waves roll, the sun shines. The moon in the sky plucks at the sea to makes the tides, and Tennyson’s wild cataract leaps in glory. And he wasn’t talking about an eye infection. All of this will go on for as long as there is a world, and we need convert only a very tiny amount of it to electricity to keep driving until the sun goes out.’

Rankings and levers

Newspapers have been quoting the survey by the World Economic Forum in which business leaders have been rating the solvency of world banks.

The rankings however were compiled just before the recent £50 billion bail-out by the UK, the nationalisation of the Icelandic banks and the larger US bail-out.

The website has the co-authors interviewed from the 3rd to the 7th of October. The report itself was published on the 8th October.

RANKINGS

1. Canada

2. Sweden

3. Luxembourg

4. Australia

5. Denmark

6. Netherlands

7. Belgium

8. New Zealand

9. Ireland

10. Malta

11. Hong Kong

12. Finland

13. Singapore

14. Norway

15. South Africa

16. Switzerland

17. Namibia

18. Chile

19. France

20. Spain

21. Barbados

22. Bahrain

23. Slovak Republic

24. Brazil

25. Estonia

26. Austria

27. Panama

28. Mauritius

29. Kuwait

30. Qatar

31. United Arab Emirates

32. Trinidad and Tobago

33. Senegal

34. Israel

35. Portugal

36. Iceland

37. Cyprus

38. Botswana

39. Germany

40. United States

41. Lithuania

42. Peru

43. El Salvador

44. United Kingdom

45. Greece

46. Benin

47. Costa Rica

48. Malawi

49. Guyana

50. Malaysia

51. India

52. Puerto Rico

53. The Gambia

54. Montenegro

55. Mexico

56. Croatia

57. Czech Republic

58. Jordan

59. Ghana

60. Suriname

61. Brunei Darussalam

62. Latvia

63. Saudi Arabia

64. Kenya

65. Jamaica

66. Honduras

67. Zambia

68. Burkina Faso

69. Slovenia

70. Sri Lanka

71. Pakistan

72. Philippines

73. Republic of Korea

74. Romania

75. Thailand

76. Madagascar

77. Colombia

78. Cote d’Ivoire

79. Italy

80. Bulgaria

81. Hungary

82. Cameroon

83. Georgia

84. Oman

85. Tunisia

86. Paraguay

87. Nigeria

88. Armenia

89. Morocco

90. Dominican Republic

91. Bolivia

92. Malia

93. Japan

94. Tanzania

95. Moldova

96. Bosnia and Herzegovina

97. Poland

98. Nicaragua

99. Venezuela

100. Uruguay

101. Guatemala

102. FYR Macedonia

103. Syria

104. Albania

105. Nepal

106. Mozambique

107. Russian Federation

108. China

109. Uganda

110. Serbia

111. Egypt

112. Ukraine

113. Vietnam

114. Turkey

115. Bangladesh

116. Azerbaijan

117. Taiwan, China

118. Ecuador

119. Mauritania

120. Mongolia

121. Indonesia

122. Zimbabwe

123. Tajikistan

124. Kazakhstan

125. Cambodia

126. Burundi

127. Chad

128. Ethiopia

129. Argentina

130. East Timor

131. Kyrgyz Republic

132. Lesotho

133. Libya

134. Algeria

Yes. That’s right.

The UK lies behind Peru and El Salvador.

Now given this report was a survey of the world’s economists whose advice our banks were no doubt taking; should we believe it?

Are the UK’s banks really behind Peru, El Salvador and Senegal?

Or is it an accurate representation that is slightly out of date, compiled as it was slightly before the bail-outs?

That must depend on whether you believe the bail-outs will work.

If reports are to be believed the Royal Bank of Scotland is next in line to be nationalised tomorrow. If that happens then there will be further pressure on the remaining UK bank’s to be nationalised too. The banking sector could be picked off one by one by the market and the taxpayer forced to pick up the tab.

On that Iain Dale post there have already been comments about the English taxpayer bailing out the Scottish bank.

It must be a pity, to all those who carp, that Scotland is not already independent.

An independent Scotland with a similar oil fund like our neighbour Norway could be similarly insulated from these turbulent times.

It would also have the economic levers to maintain its economy best, not just for the South-East of England as remains the case today. Remember Eddie George, the former Governor of the Bank of England: Unemployment in the north is a price worth paying for affluence in the South!

Although the credit crunch is global, take a look back at those rankings.

Sweden, Luxembourg, Denmark, Belgium, Netherlands. All small countries lying in the top 10.

Even Ireland, who have recently guaranteed all deposits in their banks, are sitting 9th.

The argument that Scotland is too small to be financially unstable is farcical! I don’t hear anyone saying that Denmark is too small and should be run from Berlin. (Not since the days of Adolf Hitler and the Second World War anyway!)

As countries large and small struggle with the credit credit crunch from the U.S. and Russia down to Iceland with its 300 000 population, this population argument of independence must be seen to be invalid. Iceland, with a population slightly smaller than North Lanarkshire, isn’t exactly Miramont Gardens in Pimlico!

What matters now is that we take the right decisions to get out this mess.

Those decisions may be different for each country. They may even be different for England, Scotland, Wales and Northern Ireland.

That’s why its important key economic levers are devolved away from Westminster.

Otherwise the Eddie George syndrome will hamper ‘the North’ recovering for years.

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Olympic successes and Google Earth

It seems that Chris Hoy was upset by The Scotsman’s reports that he said a Scottish Olympic team would be ridiculous.

He is quoted in the Daily Record (Its something when even the Daily Record shows up how anti-SNP The Scotsman has become!):

“I feel a bit upset that I have been quoted as saying the idea of a Scottish Olympic team is ridiculous.

“If and when a Scottish team was put together, I would be delighted to represent Scotland in the Olympic Games.

“But before that happens, so much needs to be done for the athletes to be able to compete at the highest level.

“As a cyclist, there isn’t a facility in Scotland where I can train throughout the year and that’s why I have to base myself outside Scotland.

“I am proud to be Scottish, but at the same time it’s not feasible to think we can compete as a nation without the right facilities.”

So he’s just calling for an improvement in facilities, and seems to have clarified his past comments.

I’m sure he would much rather train in Scotland if the facilities matched those of Manchester.

And that’s the rub. Athletes can train anywhere that have the right facilities. Many of the successful Jamaican Olympic team trained in the United States, for instance.

The 2014 Commonwealth Games should provide a legacy of facilities for our athletes for years to come.

Some athletes don’t need much in the way of facilities:

Kristin Armstrong, an American Olympic cyclist in Beijing, won the Gold in the Women’s Individual Time Trial in Road Cycling.

It seems all she needed was her bike, her husband’s GPS and a PC running Google Earth.

She took the GPS when she trialled the Olympic route in 2007. She then went home, imported the data into Google Earth, and then matched the elevations of the Chinese Olympic route to a similar route at her home in Boise, Idaho for her training.

Now that is smart thinking.

And in Beijing she cruised to a Gold Medal.

You can just bet Google Earth will be playing this up for years!

Incidentally, Emma Pooley from England won the Silver, one of the medallists in Team GB. She is based and trains in Zurich, Switzerland. I’ll bet she wishes she thought of that idea! Or indeed, Nicole Cooke from Wales – based in Lugano, Switzerland, who finished fifteenth. But she did win the Gold in the Road Race.

Finally a hat-tip to Daibhi Anseo who pointed out in the comments to my post on Home Nations Olympic teams in history that a cycling team represented Scotland in the 1912 Olympics in Sweden.

I’ve not found a picture yet but I have found the names of the Scotland cycling squad:

John Wilson
Robert Thompson
John Miller
David Stevenson
Charles Hill
James Stevenson
George Corsar
Arthur Griffiths

They finished fourth and just missed out on a medal. The hosts Sweden came first and took the gold, obviously having the advantage of regularly training on the Olympic route.

If only Google Earth was around in 1912!

Georgia and the oil hungry Crocodile

In my last post I suggested that it wouldn’t be in Russia’s best interests in the region if South Ossetia was independent.

Paradoxically though they are right behind the South Ossetians in their bid for independence.

Its not really a genuine wish for their self determination. A genuine South Ossetian state that wasn’t pro-Moscow like Georgia would be another nightmare for Russia, opening up tensions in its own ethnic Caucaus regions.

Its nothing more than the old divide and conquer strategy.

That’s why the Abkhazia and Ajaria independence movements are also sponspored by Russia. Purely to destabilise Georgia, nothing less.

If it was only about South Ossetia then why are Russian planes bombing Georgian cities? Military tactics or an excuse to bring Georgia to its knees?

Russia does not like Georgia’s pro-Western stance. Their attempt to join NATO.

Georgia is seen as the epitome of an former Soviet republic embracing Western philosophy.

The New York Times has this appraisal:

“It’s scarcely clear yet how things will stand between the two when the smoke clears. But it’s safe to say that while Russia has a massive advantage in firepower, Georgia, an open, free-market, more-or-less-democratic nation that sees itself as a distant outpost of Europe, enjoys a decisive rhetorical and political edge.

In recent conversations there, President Saakashvili compared Georgia to Czechoslovakia in 1938, trusting the West to save it from a ravenous neighbor.

“If Georgia fails,” he said to me darkly two months ago, “it will send a message to everyone that this path doesn’t work.”

During a 10-day visit to Georgia in June, I heard the 1938 analogy again and again, as well as another to 1921, when Bolshevik troops crushed Georgia’s thrilling, and brief, first experiment with liberal rule.”

“You should understand,” Mr. Saakashvili said, mocking the Europeans who urge forbearance on him, “that the crocodile is hungry. Well, from the point of view of someone who wants to keep his own leg, that’s hard to accept.”

The Georgian President’s analogy of Czechoslovakia in 1938 when Hitler invaded – on the pretext of liberating German citizens – was also reinforced by the Swedish Foreign Minister:

“Attempts to apply such a doctrine have plunged Europe into war in the past… And we have reason to remember how Hitler used this very doctrine little more than half a century ago to undermine and attack substantial parts of central Europe,” Bildt said.

“We did not accept military intervention by Milosevic’s Serbia in other Yugoslav states on the grounds of protecting Serbian passport holders,” he added.

Poland and the Baltic States are also on the side of Georgia in the conflict:

“The EU and NATO must take the initiative and stand up against the spread of imperialist and revisionist policy in the east of Europe,” leaders of the four countries said in a joint statement.

“The Russian Federation has overstepped a red-line in keeping the peace and stability in the conflict zone and in protecting Russian citizens outside its own borders,” the statement added.

Again from the New York Times:

“Marshall Goldman, a leading Russia scholar, argues in a recent book that Mr. Putin has established a ‘petrostate,’ in which oil and gas are strategically deployed as punishments, rewards and threats.

The author details the lengths to which Mr. Putin has gone to retain control over the delivery of natural gas from Central Asia to the West.

A proposed alternative pipeline would skirt Russia and run through Georgia, as an oil pipeline now does.

‘If Georgia collapses in turmoil,’ Mr. Goldman notes, ‘investors will not put up the money for a bypass pipeline.’ And so, he concludes, Mr. Putin has done his best to destabilize the Saakashvili regime.”

Already we are seeing problems with the oil supply.

Azerbaijan has now cut off their oil exports through Georgia.

And it is now reported that Russian jets have bombed the main oil pipeline that runs through Georgia to Turkey .

Here’s an old map showing the oil routes in the area. There are two oil pipleines shown in Georgia. The largest oil pipeline (on the map as planned) is now in place and runs straight through to Turkey. Its run by BP and is the one that is reportedly bombed.

And wouldn’t Russia like the Georgian oil pipelines in their control!

You have got to feel sympathy for the South Ossetians, their capital Tskhinvali lying in ruins.

I’m reminded of the attributed words of Calgacus, the Pictish warrior, who said of the Romans attempting to invade what is now Scotland:

“They make a desert and call it peace.”

Broadband take-up

These are the latest World Broadband ratings by ITIF:-

I’m going to concentrate this blog on the first column. That of broadband penetration; what percent of the countries population has access to broadband internet at home.

A recent Ofcom study found the UK’s figures slightly higher than ITIF, sitting at 57%. I hope this is indeed the case. I’ll use the Ofcom figures as accurate for the UK and the ITIF figures as accurate globally. Where the Ofcom figures match in the case of Belgium and the US, I’ll put the UK behind both countries as a low ranking 57%.

Sorting the ITIF list purely on Broadband takeup we get:-

1. South Korea 93
2. Iceland 83
3. Netherlands 77
4. Denmark 76
5. Switzerland 74
6. Norway 68
7. Canada 65
8. Finland 61
9. Australia 59
10. Belgium 57
11. United States 57
12. United Kingdom 57
13. Luxembourg 56
14. Japan 55
15. Sweden 54
16. France 54
17. Spain 49
18. Germany 47
19. Republic of Ireland 46
20. Austria 45
21. Portugal 44
22. New Zealand 42
23. Italy 41
24. Czech Republic 30
25. Hungary 29
26. Poland 23
27. Turkey 23
28. Slovakia 22
29. Mexico 20
30. Greece 18

I think that broadband takeup is the more relevant figure posted by ITIF. Speed and price are market factors, but the takeup figure roughly shows the percentage of people that use the internet and roughly shows your market audience. (Obviously countries with extremely large populations with lower takeup are not on the list e.g. China, India, Russia.)

Now regular readers might suspect that I’ll be analysing the UK figures in detail, and breaking them down to England, Scotland, Wales and Northern Ireland. They would be right!

As this blog already is on the long side though, I’ll refrain from the compare and contrast – till later.

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Arc of prosperity

The credit crunch. Soaring oil prices. Soaring utility bills. Soaring food bills.

One of the worst affected countries is the UK, but probably the most affected country is Iceland.

Now Iceland is regularly hailed by the SNP as part of the Arc of Prosperity, one of an arc of Scotland’s neighbouring countries that always seems to be doing rather better than us, outstriping the UK economy by miles.

One of the SNP’s goals is for Scotland is to join that Arc of Prosperity and better its economic growth rate. Obviously they claim independence would be the best route to achieve this; it gives Scotland full fiscal control over its own economy.

(Other countries in the Arc of Prosperity:-

Norway. Population 4.7 million
Denmark. 5.4 million
Finland. 5.3 million
Ireland 4.3 million
Sweden 9.1 million

All apart from Sweden have populations in size similar to Scotland; and all have had sigificantly higher economic growth than Scotland and the UK for many years now.)

So whats happened in Iceland? With the country performing so well economically and with a population of only 300 000 people, the banks wanted and got foreign investment. The Icelandic Government even loosened its fiscal policy before the 2007 election. Foreign capital poured into Iceland.

Now when the U.S. subprime mortgage market collapsed and started the credit crunch, foreign investors panicked and the money dried up. Some wanted their money back. All this has devalued the Icelandic kröna and forced the Icelandic bank to set interest rates at 15%. The country is now suffering the worst effects of the credit crunch I mentioned at the start.

Compare this with the U.S. They too are suffering the credit crunch, but are still receiving massive foreign investment. Why? Because they have a vast consumer-led population (around 304 000 000, around 1000 times bigger than Iceland’s). Hence the dollar has weakened recently; but relative to the Icelandic körna isn’t so bad and interest rates arent so bad.

One rate to look at is the current CDS rates of banks. These are Credit Default Swaps, basically a measure of how much insurance the bank needs for its debt. The higher the number the worse off the bank.

For example, when the Northern Rock was nationalised its CDS was at 295. [18 Feb 2008]

CDS have been increasing throughout the banking sector however. The US Bank Bear Sterns was bailed out by the US Government with a CDS of 720. [Mar 2008]

Other March 2008 CDS of banks were:-

Lloyds TSB 133
Barclays 170
HSBC 145
Bank of Scotland 235
Alliance and Lecicester 342

but the British banks were nothing like the Icelandic banks:-

Landsbanki 610
Kaupthing 856

Iceland, with a small population; for years one of the best economies in the world. It made a mistake relying on too much foreign capital. And when that foreign capital ran into problems, so did it. Its tough for the Icelanders, having being used to the good life for years, and now feeling the worst effects of the credit crunch. The credit crunch may be global but Iceland are feeling short term consequences of their own mistakes. Yet had the U.S. subprime mortgage market held up it may have never mattered.

Thats why the Icelandic government is now thinking of joining the Euro. The Euro is strong and the Eurozone – those countries that use the Euro as their currency – is now the biggest economy in the world, after the dollar weakened in March 2008. The Eurozone has a population of 320 000 000 people and is expected to grow as other European Union countries meet the criteria for membership.

So then what of the Arc of Prosperity? Is it in financial ruins?

Iceland may be in trouble now but remember they started from an economic base much higher than the UK or Scotland. Their problems are all relative, and will probably only result in a decline in economic growth for a couple of years, before resuming their position back near the top of the world’s economies. Even if these problems do continue then they always have the Euro to fall back on if needed, although their fishermen probably won’t like joining the EU.

What’s more another Arc of Prosperity country – Norway – has just given them 1.5 billion euros to shore up the Icelandic economy. And if Norway can afford to bail out other countries in the midst of a global credit crunch then the Arc of Prosperity can’t be doing that badly.

The Arc is better placed than most to ride out the credit crunch. I’m sure Gordon Brown and Alistair Darling will try their best for the UK.

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