2011 - Renewable Energy
Tom Forster
With the long coast line, reliable gulf-stream and an occasional summer in the south, the UK is one of the richest countries in the world for renewable energy sources, and many analysts believe that this sector will become one of the most important to our economy. With traditionally generated energy prices set to rise dramatically, it is easy to see why landowners are exploiting the potential.
As with any investment or diversification opportunity, there is always an element of risk to be considered. Which renewable energy source is best? Is there enough energy demand on farm to justify it? Will the equipment perform efficiently? Will sufficient energy be generated? How much capital will be involved? How long will it take to recoup the investment? The government has chosen not to change the feed in tariffs in the recent spending review, so that is a clear indication of how importantly it sees this sector.
Whilst the technology is still relatively young in this country, the manufacturer market is fiercely competitive as each strives to create a niche. This again creates a risk to the farmer investor in the choice of equipment.
With wind turbines, there are a number of key points to consider that are vital for success. Firstly, do your site research. Wind flow can vary dramatically from field to field. Get 6 to 12 months data and choose the equipment that best suits that speed. Secondly, research the effectiveness of the equipment and also the reliability and back up service. A 20+ year lifespan will be critical to your income projection, so don’t be tempted by cheap imports that won’t stay the distance.
With photovoltaics look at the emerging technology, particularly lightweight tensile roof structures, and consider solar farms on poor land.
Forward thinking insurance providers can give protection against many of the risks including machinery breakdown and income interruption following such a failure. Again, it is worthwhile speaking to the experts as part of your feasibility study.
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