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Renewables – should I invest in 2013?

Posted on February 28, 2013 by Edward Morgan — No Comments ↓

24.01.13 Renewables – should I invest in 2013? Discussion archive

A lack of consistency from planning authorities, opposition of NIMBYs and the short-termism of reporting in the media are the major obstacles to investment in renewables.

Attention to detail and design and keeping a good dialogue open with councils can be vital in obtaining planning permission. Investors are uncertain about the Government’s commitment to the sector.

Advisers were seeing more enquiries about self-investment but banks were willing to fund the right projects. The Green Deal scheme was not viewed favourably against existing renewables support mechanisms. Solar currently offers an attractive return on investment.

Hydro can also be viable but is more dependent on location. Biomass and biogas are expected to gain more prominence in 2013. Investors should rely on reputable established companies.

Food, fuel and environmental sectors must work together for a sustainable energy mix.

The discussion held on Thursday 24th January 2013 looked at the topic of “Renewable energy – should I invest in 2013?” and generated a total of 514 tweets on the topic from 75 participants. These included farmers, agri-food businesses, rural advisors, land agents, lawyers, journalists, academics and NFU officeholders, as well as members of the general public.

“Renewable Energy”, let us know how you define it?

  • Energy from a natural, renewable source, the sun, wind, water, earth. A renewable source
  • It must be a substitute or alternative use for fossil fuels, maybe?
  • Energy from a natural resource, wind, sun, waves, AD plants

Q1a Have you looked into renewable energy on your farm? Is it now seen as a viable diversification?

  • Planning is a huge issue for wind turbines, no consistency from planning authorities
  • AD & CHP both applied for and dismissed by planners
  • Now the feed in tariff has halved solar is not as appealing as it was
  • Looked at large field-scale PV but elec co. quoted silly money to link to substation. Project died
  • Dramatic cost reductions still make solar an attractive proposition, worth looking at again if you haven’t for 6+months.
  • With FITs I think renewables are a viable diversification
  • Solar PV has issues. The panel prices are held because they are subsidised. Pricing is all linked
  • Grid connection can be a problem on any project over 50kwp,use suppliers familiar with DNO
  • ROI for solar can be higher now than when it all began. Difference is lower capital investment
  • AD has to be the future. All that unused energy currently wasted. The digestate created is meant to be great for the land

Q1b What is the biggest block to you investing in renewable energy?

  • Certainty about future government support for renewables must play big part. Nothing worse than moving goal posts?
  • What message does the announcement of UK wind sites in Ireland send to UK investors?
  • Need to have a lot of patience, to go through planning and so on, but rewards are the for on farm AD digestate huge fert value
  • Biggest uncertainty is unpredictability over future Govt support and level of returns
  • Govt done no favours with how the change policy is getting more consistent for renewables, especially FIT and RHI
  • PV is the only technology that I consistently get told outperforms pre-install projections. Wind, hydro et al generally down!
  • Short-termism a problem when items remain in the news and the public conscious so briefly
  • Wind and solar most straight forward due to FIT, but don’t forget Biomass

Q2a What is the best renewables funding route for farmers? Would you invest in self-funded schemes?

  • Are people aware of the Carbon Trust/Siemens funding for renewables?
  • IME funding is still aggressively available for the right opportunity. Just have to make sure if funded, they will get a big cut
  • Attractive solar farm rents mean real diversification opp. £1,000 to £1,200 per acre for 2013
  • We are now receiving more enquiries about self-investment in renewable tech

Q2b What finance/leasing options are there for renewables? What’s the response from banks to finance requests?

  • Most banks have ring-fenced funds, not easy to get perhaps. Carbon Trust lease purchase works
  • Vital parties cater for cost of decommissioning as part of deal
  • When interest rates are at 0.5% it won’t be difficult to get fully funded deals in govt supported inflation linked assets >5%
  • Funding can be very simple when you deal with the right people
  • There is plenty there for it, but maybe a lack of understanding from banks/bankers point of view
  • Some have a set policy which just can’t work. Each request on individual merits, but key is starting point of business
  • Whatever anyone thinks a renewable energy project is very rarely a silver bullet for a struggling business

Q3a Who do you trust to provide advice on renewables projects?

  • Use established companies that know their stuff. See their many years of proven yield
  • There are lots of new entrants into the market. but since the FiTs drop lots have gone
  • Many domestic installers getting into commercial which is a totally different kettle of fish
  • FiT/RHI landscape now much more stable, confidence v low after last year, reputable advice key
  • Many installers would go bust without subsidies. Choose installer that can weather most storms

Q3b Many installers are not design engineers. What level of design should a company offer?

  • Choose experienced installers that design quality systems, not the many chancers
  • Good design will often be crucial to obtaining planning consent
  • Many installers have use of manufactures software, true design goes beyond this. Knowing products v important
  • Don’t forget quality of product too, cheap isn’t usually value! Warranties important
  • Very important that is why we only use a panel with a 35yr warranty

Q4a Do you find the renewables info in the media useful? What aspects would you like to see/hear more of?

  • Government constant moving of goal posts makes many not trust what read in media + no time for proper research
  • But the debate in the popular press is shallow, sensationalist and superficial?
  • Lot of renewables ind use social media 2 communicate vs competing with big energy firm advertising budgets
  • Media riven with NIMBY comments. Local farmer’s scheme floored as wealthy incomers funded a barrister to down it
  • How many people know what a BANANA is? Build Absolutely Nothing Anywhere Near Anyone

Q4b What can the Gvt do besides subsidies to encourage investment in renewables? What will it take for you?

  • FIT returns now better than ever
  • 2013 is already seeing a rise in the market
  • We had two identical 6kw wind projects, diff planning auth, one 3 months, other 22 months!
  • Lots of people talking about the confidence in the FiTs. Last year needed to happen. Maybe not in the way it did but the roadmap is much clearer
  • Looks very likely FiTs and CRC credits will be able to be claimed for solar
  • Subsidies for renewables and R&D in it, and increased tax for fossil fuels? Cost should reflect the real cost of energy
  • A complete rethink of current large scale power network might be needed. Small and local? More susceptible and adaptive?

Q5a Looking at other forms of renewables beyond wind and solar, has hydro power come of age?

  • I would say it came of age some time ago it just took FiT regime to make it viable at a small scale
  • Consenting process much clearer for hydro power than wind, but project lead in times can be long, also v location dependent
  • Hydro power technology has come of age, but surely problem is so few have the right location?
  • Lots of investment going into developing hydro power tech in east anglia, but so far not as advanced as offshore wind
  • I seem to be advising more and more folk on hydro schemes that are actually going ahead and not just chat
  • Biggest problem here in Scotland seems to be caused by the environmental regulator and SNH
  • Hydro needs to be looked at further, it must be the only renewable that can run constantly

Q5b Out of Solar, Wind, AD, Biomass which is perceived as the most risk free, & the best return on investment?

  • Solar easiest with lowest risk I’d say
  • Once consented PV, no moving parts, easy to replace panels/inverters and prob most consistent over-achiever
  • It all depends on the circumstances of the property, assets and use of the land/location
  • The problem with wind is how long planning applications take to get through planning. 7 years on average. And the nimbys

Q6a Is turning grass into biogas more profitable than turning it into milk or meat?

  • More profitable? Perhaps yes. Grass does not require dagging, does not get pulpy kidney. Cheap to maintain. But biofuel for what?
  • Depends on feedstock if grass/maize don’t technically need cattle, but if waste system you do!
  • Why not allow God’s natural digester (aka the cow) to digest, produce milk & then make biogas from the slurry?
  • You don’t have to TB test a bio gas plant no BVD etc
  • The problem is slurry has already been digested so have a reduced gas content
  • How will the bio grass farmers deal with the badgers that scratch up the turf?

Q6b Environment versus food security versus energy security? What are your thoughts on importance of energy sector?

  • The great food vs fuel debate… I’m concerned that the answer isn’t as clear cut as it should be
  • Food security is currently dependent on energy security – we need to wean our food system off fossil fuels
  • Versus? Or And?
  • A lack of focus on environment, food or fuel will be a disaster. All must work together
  • Food security should always be priority. What’s the point in being able to drive around/ take a flight if we can’t EAT?!
  • But without energy given the size of tractors these there wouldn’t be a lot of food either
  • Food security is paramount but new renewable sources of energy should follow closely behind
  • They’re not tradeoffs! All go hand-in-hand, derived of same ideas
  • Less waste thru tight specs and shelf life dates, better storage much better start point on food security than food v fuel
  • It doesn’t make sense to put good land into production of crops for bio gas, it should all come from waste. ½ world food wasted!
  • Not a question of either/or. Need to find a way to secure both
  • Before using land to grow energy crops we should be using energy from waste instead of burying the stuff

Q7a Is the planning system still a barrier to investment in renewables?

  • We’re finding it’s council specific, some helpful even supportive, some not!
  • The biggest barrier IMO
  • We found planners very helpful, but neighbours who fall inside National park are realy struggling
  • Yes, but can manage (not eradicate) risk/pitfalls with good preparation
  • Not if done correctly. Sensitive designs = speedy planning process. This is where most inexperienced developers fall down
  • They have to go hand in hand, government is committed to % renewable yet we are going to have to feed more people.
  • Again depends on size of scheme but grid connections, funding & other regulators loom large
  • It can be huge problem, however dialogue and good attention to detail can make big difference
  • I have a letter to the house saying to object to an AD plant 15miles away! it was v aggressive

Q7b Are you aware of the green deal & what it offers? Implications for let properties – will you be taking advantage?

  • Illegal to let residential property graded F and G from 2018
  • NO need for Green Deal when easy funds exist, GD fatally flawed
  • But how aware are people of the “easy funds” letting restrictions from Green Deal – will be key in yrs to come.
  • Green deal unworkable for many years, if it doesn’t die from a false start
  • Had a green deal assessor out and just waiting for recommendation

Q8 What will the future of renewables hold?

  • A maturing market with good case studies and better awareness. The future IS renewables, and farms placed well
  • I see the future of renewables being biomass supplemented by AD and waste gas. Plus off-shore tidal/wind. Spread the risk.
  • The difference between there being a future for the planet … or not! Simple really
  • I think we will see more biomass and biogas in 2013
  • Renewables will mature nicely. Many glory hunters &  band wagon installers leaving market
  • Renewables here to stay as part of sustainable future energy mix an emotive subject with much scare-mongering though
  • Renewables really exciting area with real opps for the brave
  • Everyone need to learn where their energy comes from and we all need to look to more local energy production
  • Market will mature, less players & new/improved tech & solutions but there will still be political/financial hurdles!
  • Renewables will help secure the future of a vibrant farming industry and let us invest in efficient food production

Renewables Advisers who took part

Links to more information

 Simon Haley, Reading Agricultural Consultants, and Alan Spedding, 27 January 2013

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