Carter Jonas
The Property People

Our Top Tips for Medium Scale Wind Energy Projects 100kW – 500kW

The FiT has addressed financial viability which was seen as a brake on decentralised energy generation by localising the economic benefits and opening up opportunities for all site owners.

There is now a major opportunity for property owners whether they be farmers, businesses or communities, who have a suitable site and who are keen to develop a project to ensure security of supply whilst achieving a sound financial return.

Throughout the spring and summer our team has been involved with seminars to provide advice to site owners on the major benefits and risks associated with both medium and commercial scale wind energy development. Presentations were given by experts in the areas of:

• planning – an overview of the main planning issues which need to be considered when developing a project and gave an indication of thresholds

• economics – building upon the findings of our Energy Index, this presentation explored issues associated with financial modelling for medium scale wind turbine development as well as providing advice on landowner options

• grid – a grid expert explained the main issues associated with grid connection and gave advice on what to look for when considering options

• taxation – these sessions explored issues associated with setting up the business plan and project development in the most tax efficient manner

Feedback from the seminars was extremely positive and many attendees welcomed the fact that risks so often assessed independently of one another by many consultants, were being brought together in order that site owners could make an informed decision on project development, based upon a logical process rather than a scatter-gun approach.

Those attending the seminars agreed the importance of fully utilising the ‘window of opportunity’ in terms of the FiT rates,  whilst set at the current level – the FiT is due to be reviewed in 2012 with changes coming into effect in April 2013.

To summarise from case studies in which we are involved, we have put together our top 10 tips for successful renewable energy project delivery, which are as follows:

1. know your site and develop an understanding of the physical aspects of your site, i.e. is access relatively easy for turbine components, is there an open area with uninterrupted wind flow?

2. develop an understanding of the environmental, technical and financial risks as these can significantly affect the overall viability of a project. The first stage of any project should be to develop an appropriate feasibility study

3. identify a potential grid connection point and ascertain indicative connection costs. Does the site have a three phase connection with sufficient capacity which is required for most projects over 10kW?

4. identify the appropriate technology. Consider all turbine models and their requirements in order to select the technology which is most appropriate

5. develop a realistic timescale. Factors which are often forgotten are the time taken to achieve planning permission and a grid connection offer, as well as the time to actually deliver the equipment from the point of order

6. develop a comprehensive financial model which accounts for variables such as tax, VAT, interest payments, depreciation and service and maintenance in line with your specific circumstances

7. early engagement and discussion. If possible, engage with the local planning authority and other consultees at an early stage to ensure planning compliance

8. source finance. Ensure that you understand the requirements and availability of finance

9. consider the project structure. Consider whether to own and operate the project or to undertake a joint venture with a developer. The other aspect to consider is to seek advice on whether to set the project up as its own entity or as part of an existing business. This is a crucial step in tax planning

10. seek guidance from experts. Experts will have a proven track record and will be happy to share their experiences. It is unlikely that one consultant can provide all the above expertise required but they will be able to pull together and co-ordinate the delivery of the whole project

Finally, we were delighted to be asked to make a presentation on Medium Scale Wind Energy at the Renewables UK 2010 Annual Conference and Exhibition in Glasgow in November, which concluded that it was imperative to:

•    engage with planners and statutory consultees at an early stage

•    promote a level playing field by ensuring that both developers and objectors justify their stance at the planning stage

•    maintain a strategic steer for renewables despite the proposed abolition of the Regional Planning Strategies

•    ensure that large single turbines are not treated within the planning system as if they are commercial wind farms

•    return to criteria based policy rather than spatial policy to guide appropriate development in all locations

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