Could New Wind Farm Subsidies Scare Off Green Investors?

Under the government’s reforms of the electricity market, subsidies for wind farms – which have been added to the bills of energy consumers – will rise by nearly 10% from next year. However, environmental wellness experts have questioned the new regime, detailed last week, as this may mean that renewable energy companies will still find it impossible to invest.

In the UK, wind turbine operators and manufacturers have been holding off on tens of billions of pounds of investment due to fears that subsidies would be cut to unsustainable levels. From 2014, the draft subsidy level or “strike price” will be £155 per megawatt hour for offshore wind farms, and £100 for onshore wind farms – as these are cheaper to build and run. However, in 2018, this will fall to £135 and £95, respectively. Even though the subsidies are being levied from you, the customer, Ed Davey, secretary for energy and climate change, said the new regime would help ease customer energy bills and save households £5bn by 2030. This is because the new move will reduce our reliance on imported fossil fuel energy.

However, the new “contracts for difference” will run for only 15 years, whereas the old system was set to run for 20 years. This means that investors will have less certainty and appetite for pouring their billions into our green economy. According to Maria McCaffery, chief executive of RenewableUK, which represents wind companies, ‘The levels of the strike prices are challenging but possible considering the reduced time periods that renewables will be supported for under contract for difference system compared to the Renewable Obligation. However, more details need to be set out. The most important ingredient remains investor confidence and that will take time to land. The secret is consistent long term support and investors seeing that government is behind renewables and low carbon generation for the long term.’

Ronan O’Regan, director at PwC, commented, ‘The strike price headlined on offshore wind sounds reasonable but it depends on how it reduces over time and it is difficult to compare directly with what projects get with the Renewable Obligation. Existing investors in offshore wind will broadly welcome the draft prices. But questions remain whether this on its own will be enough to attract the new financial investors that the sector requires…Capital is internationally mobile but constrained, because investors will assess opportunities across multiple markets and sectors. The UK needs to convince investors that its market is both attractive and offers a stable regulatory environment.’

Categories: investment, Subsidies, Wind Farms

Does an Investment in Corporate Wellness Pay Off?

Every year, employers spend $2 billion on wellness programmes. This is according to market researcher IBISWorld, which doesn’t even take into account the cost of corporate wellness plans that companies develop in-house. That’s a lot of cash to stake on your employee’s, and your business’, wellbeing, but the real question is; does it pay off?

The short answer is, experts still don’t know. Some studies have suggested that, for every dollar spent on wellness programmes, companies save three dollars or more in savings. However, most of this research is done by comparing workers who participate with those who don’t, and do not account for their different levels of motivation. A Rand Corp. analysis last year concluded that the evidence is insufficient ‘to definitively assess the impact of workplace wellness on health outcomes and cost.’

Plus there’s a side to corporate wellness programmes which implies that the employee’s wellbeing is not the greatest concern to companies, but rather the cost of their care. Under the Affordable Care Act, companies may charge workers premiums of up to 30% more if they don’t meet certain health goals, and Alan Balch, vice president of the Preventive Health Partnership, an alliance of the American Cancer Society, the American Diabetes Association, and the American Heart Association, argues that this could keep the sickest workers from affording the care they need. He asserts, ‘If it becomes a tool for shifting health-care costs, you might undermine the whole idea of workplace wellness.’

Yet, HR professionals are convinced that properly designed corporate wellness programmes save money. According to Bruce Elliott, manager of compensation and benefits at the Society for Human Resource Management, ‘It’s an investment, and it’s an investment that does take some time.’ He notes that helping your employees to quit smoking or unhealthy diets will save you money over three to five years, but you shouldn’t use penalties to try to coerce workers to change their behaviour. ‘The one thing that does worry me is the utter lack of metrics and really, the utter lack of thought,’ Elliott says. ‘We’re now more at a herd mentality.’

Jeffrey Harris, director of the Health Promotion Research Centre at the University of Washington, adds that deep changes to the workplace are needed, rather than just starting up a wellness programme. He says that the workplace metamorphosis needed ‘is hard, and it’s hard to outsource that to an outside firm, so most companies don’t try.’ Harris suggests that companies who lavish employees with free snacks could be adding to worker obesity, commenting, ‘Strongly consider whether you want to try to change the culture around a place by removing the bowl of Hershey’s Kisses.’

Does an Investment in Corporate Wellness Pay Off?

Categories: investment, penalties, Wellness programmes

The Investment of Arthritic Medicine

A new drug to help the symptoms of rheumatoid arthritis has entered lawmakers’ scopes as is becomes a topic of controversy regarding investment issues.

A political debate over Xeljanz, produced by Pfizer, has cost taxpayers a whopping $24,666 (£16,193) a year, which is said to grow into $2.3 billion by 2018, reflecting the company’s initial investment of $1 billion two decades ago. Pfizer joined up with a research team to produce Xeljanz. Initially, the company declined involving itself with the research team in 1994, the pricing terms of which asked for the company to “reflect the taxpayers’ investment and the health and safety needs of the public.”

Two years later, the pricing clause was removed and Pfizer worked with the team to create Xeljanz, a protein-based drug to reduce the symptoms of arthritis.

“When taxpayer-funded research helps stimulate efforts like the Xeljanz research and development program, there is a substantial return on investment,” the Pfizer statement says. “If a company chooses to initiate a high-risk $1 billion investment, as we did, that is a significant return to the American public.”

The National Institutes of Health however, has been treated with scrutiny, with its research reportedly having no “treatment-related discoveries and did not contribute in any way to the Xeljanz R&D program.” Furthermore, the report was notably vague, which means that the public’s investments into the drug is being treated with significant concern.

“American taxpayers are entitled to realize a return on their investment in N.I.H. research resulting in this — or any other — breakthrough drug. Surely price gouging isn’t what they expect or deserve,” U.S. Representative Henry A. Waxman, D-Calif told the New York Times.

With the grey area of tax-funded medication, the debate is drawn as to whether or not publicly-funded medication should cost its prescriber less. With companies attempting to make a profit and its consumers trying to improve their lives, it is interesting that the question is not “does it work?” but instead is, “how much will it cost?”

The Investment of Arthritic Medicine

Categories: Arthritis, business, company, Corporate, Finance, funded medication, investment, Osteoarthritis, Pain Relief, pfizer, Research, research team, xeljanz