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The UK’s largest bioenergy event
on site. on the grid
The UK's definitive microgeneration event
stoneleigh park 10 – 11 october 2012
lead generation for energy generation
10th - 11th October 2012, Stoneleigh Park, Warwickshire
Funding renewable energy projects
microgen 2012 is the proud sponsor of the Public Sector Project of the Year award. Brought to you in partnership with the MCS, microgen 2012 attracts a wide range of commerical buyers from within social housing projects including housing associations, ALMO’s and local authorities. As the only home of the MCS Live conference stream we also attract a broad cross section of MCS certified installers looking at how they can diversify in 2012 and beyond and how best to capitalise on the renewable heat opportunity.
typically this is not commercially viable with 10, 5 or even 3 year contracts being more realistic. Thankfully we are seeing funders gradually lower their expectations on this front; perhaps a representation of them finally becoming more familiar with the sector?
microgen exclusively focuses on micro-renewable energy generation (solar pv, solar thermal, gshp, ashp, small scale wind, and micro hydro). microgen brings together the entire supply chain from equipment manufacturers, distributors and suppliers through to installers, wholesalers, consultants and commercial end-users.
Financing renewable energy projects is ‘challenging’ at the best of times, and is all too often the major hurdle encountered by any form of renewable energy project. But why is it so difficult, and what steps can be taken to ensure that developers maximise their chances of obtaining that critical funding?
• Backed by the MCS, REA, REAL and The Energy Institute • Supported by a huge free to attend quality conference programme • Over 100 exhibitors • Attracting installers looking at the next big opportunity together with end-users seeking a greater understanding of all of the possible renewable options
For further information contact event director, gordon kirk on 020 7348 5265 or email microgensales@closer2media.com 2012 exhibitors include
2011 exhibitor testimonials: “There have been at least half a dozen leads that will be worth over £15k — not bad for half a day’s work. We’d normally review the show afterwards back at the office before making a decision, but, it’s been so good we have booked already for 2012.” Alan Dunn — Husky Heat Pumps
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“There have been some people we have been targeting, unsuccessfully, who today, just walked onto our stand.” Martyn Ford — Daikin
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Traditionally the UK has always lagged behind its European counterparts when it comes to renewable energy. Unlike the UK, they had the foresight to implement financial incentives long before ROCs and FITs existed and accordingly the UK trails far behind them with just 6.8% generated from renewable sources compared just over 20% on the continent. Tough economic times have made funders far more risk averse, so the introduction of these incentives prior to the downturn has been massively important for the investment into renewables overseas. The cornerstone for funding any renewable energy project is to base it around a proven technology with a solid track record, both in terms of energy type and manufacturer. Taking the example of anaerobic digestion (‘AD’), the UK now has 74 commissioned plants generating approximately 60MWe across both on and off-farm units . By stark contrast Germany, who have very much paved the way in AD, now have over 7,000 fully operational plants. Whilst incentives are clearly a major contributor to this development, the increased prevalence of the technology has also allowed German funders to become far more comfortable with the technology. AD is evidently very much in its infancy in the UK, and as a result the lack of knowledge and experience of the technology amongst potential investors often hinders investment. The other major area of concern for funders is around security of supply, be it from a naturally abundant source such as the sun or wind, or from a feedstock contract. To address this, again depending on the energy type in question, they might require actual wind or sunlight data or a watertight feedstock agreement. The latter of these is obviously more complex with an additional requirement to focus on the type, continuity and consistency of the supply. In an ideal world funders would like a 25 year feedstock contract, however
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Having said all of the above, funding renewable energy projects is by no means impossible. We speak to a variety of investors on a regular basis and the common theme that arises is that they are approached by developers prematurely. Given how active the renewables market is, it is important to bear in mind that they are inundated with requests for funding and as a result have a tendency to cherry-pick the easiest and best projects to invest in. In our experience the successful projects are almost always presented to them at the point where most, if not all major aspects of the project have been pieced together thereby making the proposition far more appealing to the funder. The main prerequisites tend to be: • Long term tariff support such as that offered from FITs, ROCs or RHI • A robust O&M contract, ideally with some form of performance guarantee • An appropriate lease agreement for the site on which the project is to be located • Where appropriate an EPC contract with sufficient warranties for delays in construction etc. • A proven technology supplier with a track record of other successful plants • A proven and reliable energy source (a feedstock contract, sun or wind for example) secured for as long as possible • A suitable grid connection with a suitable energy purchase agreement • Approved planning/permitting for the project at the site if required • Where necessary (for example, for AD) a reliable digestate offtake agreement • Ideally (although not essential) a pipeline of projects as larger funding amounts are typically more attractive to investors If the project is presented well and most if not all of these fundamentals are finalised then it allows the project to stand head and shoulders above the majority of applications that funders receive. The fundraising process would consequently be quicker and simpler, and as a result momentum could be maintained and most importantly the investors’ interest. If the project is presented well and most if not all of these fundamentals are finalised then it allows the project to stand head and shoulders above the majority of applications that funders receive. The fundraising
Exclusive: Surprise figures show big rise in number of renewable energy installers The number of certified renewable energy installers has increased by more than a quarter over the past six months despite the reduction in the level of cash support under the Government's Feed-in-tariff scheme. Research carried out by Nextgen Expo has found that the number of registrations under the Microgeneration Certification Scheme (MCS) has actually increased since last October by nearly a thousand new installers. However, according to the Renewable Energy Association around 600 renewable energy companies dropped out of its REAL assurance scheme following the annual renewal date last month. The mixed picture shows that while the 600 companies are no longer operating under the MCS umbrella, the surviving operations are building up their revenue streams by entering into new markets. Dave Sowden, chief executive of the Micropower Council, explained the surprise increase in MCS registrations could be as a result of companies diversifying into fresh green energy sectors. “With the Green Deal approaching a lot of companies may be looking at adding energy efficiency solutions to their portfolio of products and services,” he added. “The reduction to the Feed-in Tariff scheme certainly created a rush of activity with over 250MW of solar PV being installed between December 12 and the eventual cut date of March 3.” ”The two market bubbles were certainly PV driven but these figures may be as a result of companies now registering for multiple technologies, in particular the energy efficiency requirement of the Feed-in Tariff scheme.” According to Gemserve, the number of installers registered on its MCS scheme before the October 31 announcement of FiT cuts was 3,929. Despite the subsequent well-publicised collapse of several big-name companies, this week the MCS database holds the details of 4,866 certified engineers. The number of companies signed up to the REAL Assurance scheme was approximately 5,200 last October, a figure which rose to 5,800 in April before dropping back to 5,200 following the annual renewal deadline. A DECC spokesperson said “It’s great to see the number of MCS registered installers has increased over the past year, showing there is a market out there and a real demand for small scale renewables to generate clean green power.”
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