Beware elephant traps in the generation game
Guy Sanderson of gfw-Renewables offers farmers advice on preparing to cash in from Feed in Tariffs as he talks to Iona Walton
The recent Feed in Tariffs (FiTs) announced by the previous Government have been a hot topic over recent months. What has been clear is the huge number of new businesses that have started up since the FiTs were introduced and there seems to be an endless stream of information hitting the press and airwaves at the moment.
But where should one start and how does one go about getting the right generation unit for your property resource?
“The FiT is aimed primarily at property occupiers (be you tenant or landowner) and is a great idea as it will create a diversified source of income for the farm business as well as potentially helping to reduce the energy bills,” says Guy Sampson of gfw-Renewables.
“My field of expertise is hydropower. A key message is that there are opportunities in renewable sectors other than wind. For example: does a watercourse run through the farm that could drive a hydro turbine? What about solar power on the South facing farm building?
“Hydro schemes are extremely variable in design,” points out Mr Sampson.
“Taking an example, a large river with a weir approximately three metres high could generate an extremely worthwhile revenue stream under the FiT scheme. It’s equally possible, however, to install a scheme on a smaller watercourse such as an uplands’ burn using a different turbine design.”
Hydro turbines may be installed in new locations, as well as those sites in which water power has been used in the past.
Mr Sampson remarks: “In some areas hydropower was once a very common source of energy on farms. Across the country there are many former watermill sites with the potential to be re-used for modern electricity generation; look out for old millponds, dams and weirs.
“People do need to be aware of the ‘elephant traps’ that can catch them out however, before you commit to significant capital expenditure,” warns Mr Sampson.
“With hydropower, the level of civil engineering needed to create the scheme must be understood at an early stage and the cost of tapping into the grid is also very important as there might be no connection near the watercourse.”
The company Mr Sampson works for, gfw-Renewables, the renewables arm of George F White, was launched at the beginning of the year to meet the demand generated by the FiT scheme. The aim is to provide professional services from feasibility studies through to planning and turbine procurement.
“We’re independent and so look at all the options available; you need to know all the facts and options so that you’re making an informed decision, especially given the capital that some projects require,” comments Mr Sampson.
“Payback periods will often be dependent on the level of engineering required to install a scheme, as much as the turbine itself. As a generalisation, eight to 12 years may be taken as a good working average.”
secure long-term investment
“Given that the FiT is guaranteed for the next 20 years and the working life of a turbine may reasonably be expected to be well in excess of this, such a scheme should be viewed as a secure long-term investment,” points out Mr Sampson.
“The coalition Government has supported the FiT scheme as being a positive influence for the development of renewable technologies, but those considering installing such technologies should note that the payment rates are set in bands depending on the size of the turbine that is installed, with the highest payment rates reserved for the smaller generators.
“Thus it shouldn’t always be assumed that the largest generator will produce the greatest income, as a smaller (and possibly cheaper) turbine might prove more worthwhile,” concludes Mr Sampson.
For more information visit www.gfwrenewables.com and www.fitariffs.co.uk.