There is the consensus that the UK market has become harder for small-medium wind turbine suppliers and many believe that the flexibility of this type of investment is crucial for the sector to secure its long term future, especially considering what the immediate future may hold following proposed Government cuts in FiT from January 2016…
A Livingston-based turbine manufacturer for the global medium distributed wind industry has struck a £2 million deal to build 10 of its 51kW Skye ‘tilting tower’ wind turbines for a privately-owned Italian investment fund.
As well as building and supplying the wind turbine systems, which will be based in Scotland, Orenda Energy Solutions will install, commission and carry out the ongoing operation and maintenance on behalf of CanadEnergy.
Orenda, which also has a base in Canada, will fulfil the contract, for which CanadEnergy has created a UK subsidiary company, Britannia Energy, in phases over the next six to 12 months.
This is CanadEnergy’s first venture into the UK wind energy market – although the company says it has set its sights on actively expanding its projects ‘pipeline’ across Europe and Canada, in which it already has a number of wind energy projects underway, as part of its long term green energy investments programme.
President Luca Roffi said: “Orenda’s turbine design and its ability to be folded down quickly for maintenance, struck our board of directors as practical steps to keep long term operating costs low.
“The business plan Orenda Energy presented to us met our demanding requirements, and the contract negotiations went well. We were pleased to have the opportunity to participate in Scotland’s renewable energy industry, despite the recent UK onshore wind Feed in Tariff changes.”
The CanadEnergy fund is advised by PentaEnergon, an Italian specialist in identifying, selecting and structuring Renewable Energy Source schemes.
Its director, Enrico Montangero, said: “Our investors look for project returns that are substantially guaranteed for the life of the equipment and are in countries with a stable, long-term outlook. Equally, Scotland has excellent wind resources and benefits from an infrastructure that recognises the potential and importance of its natural environment. Operating in the UK and specifically Scotland will be of significant benefit to CanadEnergy.”
Steve McMahon, vice president of sales & marketing at Orenda, added: “Like many technology-based markets, the UK small-medium wind sector started with early adopters who wanted to own a wind turbine and potentially profit from this investment.
“Today, the UK market has evolved and customers are now seen as ‘pragmatic investors’ looking for complete ‘plug and play’ solutions. However, these investment opportunities must meet very stringent due diligence requirements and financial hurdle rates.
“Orenda Energy recognises this market dynamic and we therefore developed a strategy to become a site developer as well as a wind turbine manufacturer so we are now in a position to serve this very demanding class of customer with a full turnkey and investible proposition and securing this deal with CanadEnergy fully underlines that we have strong validation in terms of our Skye wind turbine, our company and our far-reaching vision.”
There is the consensus that the UK market has become harder for small-medium wind turbine suppliers and many believe that the flexibility of this type of investment is crucial for the sector to secure its long term future, especially considering what the immediate future may hold following proposed Government cuts in FiT from January 2016.
Gerry Lalonde, CEO of Orenda, claims that the purchase of the turbines is a sound proposition in terms of the Return on Investment for CanadEnergy and further broadens the scope of Orenda’s growing appeal and attractiveness.
He said: “By brokering such cohesive partnerships such as this one, we are strengthening our involvement as the small/medium wind turbine manufacturer which consistently delivers the returns investors are looking for.
If you add in complete performance guarantee, plus an all risk insurance package including loss of income, we are simply demonstrating our belief in this as a ‘win-win’ investment.”
Orenda was advised by Dundee-headquartered DC Consulting, one of Scotland’s leading independent corporate finance firms which specialises in sourcing emerging technology companies for investors.
Angus Hay, director at DC Consulting said: “We are delighted to have supported Orenda in delivering a funding solution to assist with the role out of their innovative wind turbine products into the UK market. DC Consulting has a proven track record of supporting young and ambitious companies in delivering tailored funding solutions particularly in the Energy Renewable sector.”
Work on the contract starts immediately, with preliminary excavation and developmental work commencing at three pre-consented sites – two in Aberdeenshire and one in the Western Isles – with other locations set to come on stream at the beginning of next year.
Other sites have been identified by Orenda and are at various stages of the planning process.