Supporting renewable energy
5 September 2012
Ian Burrow, Head of Agriculture and Renewable Energy at NatWest, describes the bank's collaboration with the Met Office which he hopes will encourage more people to invest in wind energy.
There is a real push to use sustainable energy as many farming and rural communities recognise the cost saving and efficiencybenefits of harnessing wind and solar power. A recent survey conducted by the National Farmers Union (NFU) and NatWest revealed that almost one third of farmers across England and Wales are currently involved in some form of renewable energy production and supply.
This surge in popularity is also down to the Government support and the commercial potential of using 'green' energy. Recent Government announcements on the changes to subsidies for renewable electricity claim they will create a multi-billion pound boom for the British economy, driving growth and supporting jobs across the country because it could incentivise between £20 billion and £25 billion of new investment in the economy between 2013 and 2017.
Added to this, rising energy prices, the need for farming to reduce its carbon footprint, and economic pressures leading many farmers to consider diversification strategies, it is no surprise that the interest in renewable energy is high.
Onshore and offshore wind generation can make a significant contribution to the UK's renewable energy target of achieving 15% of energy from renewable energy projects by 2020 (as set out by the EU Renewable Energy Directive). With 40% of all wind energy in Europe blowing over the UK, it is clear we have some of the best wind resources in Europe that can be used as a low carbon renewable energy supply. The Department of Energy and Climate Change (DECC) states that the UK already has more offshore wind capacity than any other country in the world.
All this highlights that there are plenty of opportunities where turbines could be deployed and we have found that the response from the farming community has been excellent.
One in five farmers polled in the NFU/NatWest survey said they were producing clean electricity with one in eight using or generating renewable energy by summer 2012.
It is clear that farmers are taking notice of the developments in renewable energy and see a tangible benefit for their business. However, for many people, securing the required financial investment is a key concern. Of those surveyed in the NFU/NatWest report 34% believed access to finance was a barrier, whereas the number was less (24%) from those farmers already involved with solar and wind projects.
At NatWest, we have already taken steps to help those businesses that see access to finance as a barrier. One of the ways we have done this is by setting up specific training programmes for both our agriculture and renewable energy managers to ensure they are better placed to understand and help clients.
For our agricultural teams we have created a training programme accredited by the Chartered Banker Institute that helps our agricultural managers to be more professional in their day to day roles and keep abreast of key industry issues. This will lead to a Certificate in Agricultural Finance, a new formal qualification undertaken by all of our managers, expanding their knowledge of EU policy, tax and key sectors that make up the UK's agricultural market. It is also endorsed by the NFU.
In addition we have teamed up with Mark Newton, Head of Renewable Energy at Fisher German, rural and commercial property consultants, to create a tailored training programme for our renewable energy teams. The NatWest Renewable Energy Financing Programme is also accredited by the Chartered Banker Institute and ensures our managers undertake continuous professional development and understand issues facing customers looking to invest in renewable energy. We want to fully support our customers and both of these training programmes highlight our continued commitment to provide a professional service, as well as our aim to become the bank of choice for agriculture and renewable energy.
The training programmes were launched last year on the back of the bank's announcement about the £50 million Renewable Energy Fund. We have provided nearly half of this funding to support renewable energy projects and we are keen to fund more viable projects.
Assessing profitability of wind turbine projects
In a move to make access to this funding more readily available we have teamed up with the Met Office to provide access to the most accurate wind speed data. This helps assess the profitability of a wind turbine project and ensure customers have all the right information from the start.
We encourage farmers and landowners to commission a Met Office report, called Virtual Met Mast™, which accurately defines how much wind there will be at specific locations. A Virtual Met Mast™ report can help anyone planning a wind project to better establish the right size turbine for their site and gives all parties a greater peace of mind when assessing the risks associated with the investment.
Our criteria for investment in wind turbine installation is considered on a case by case basis. Using the Met Office's Virtual Met Mast™ enables all parties to understand the feasibility of a wind project and provides the most accurate data.
We have also introduced new funding terms, including an extension of the loan terms from 10 to 15 years following the announcement of reduction in the Government's Feed in Tariff (FiT) and flexibility around full security cover with the ability to use the Government-backed Enterprise Finance Guarantee (EFG) loan scheme subject to terms and conditions.
All in all we are striving to make investment in wind projects as straight forward as possible. By working together with the Met Office I hope to drive more investment and encourage more people to consider renewable energy sources. In turn, that will help people grow their business, improve their bottom line, reduce the risk involved in renewable energy projects and cut costs.
- Find out more about Virtual Met Mast™