Extension for Windflow’s UK Distributor
14 April 2011
Windflow has extended the target
sales dates for its exclusive UK
distributor, VG Energy by six months. Windflow CEO/Director Geoff Henderson
recently returned from a two week visit to the UK, to review progress by VG Energy
and to appraise first-hand the overall market sentiment. “VG Energy has had one
Windflow turbine consented and has another 20+ Windflow turbines still in the planning
process. It is vigorously expanding its team to keep up with demand from
hundreds of Scottish farmers for its product range, in which the Windflow 500
features strongly. We want to continue working together towards getting the
first orders”, said Mr Henderson.
VG Energy previously had a target to
sell 20 Windflow turbines by June 2011 in order to retain exclusivity. However
this has been extended to December 2011, due in part to planning delays but mainly
due to the early review of the UK Feed-In Tariff (FIT) which has created some
investment uncertainty in the past months.
The review was announced in February
this year and has brought forward to April 2012 the date on which the FIT rates
of 19.7 p/kWh (index inflated) for 100-500 kW wind projects might change,
rather than the previous date of April 2013. The review was prompted by the
need to reduce the FIT of around 30 p/kWh for solar PV, which has had a larger
uptake than expected, consuming arable land as well as being rooftop mounted.
Anaerobic digestion, which has FIT of around 10 p/kWh, has had a smaller uptake
than expected and is expected to receive further stimulation.
A source of uncertainty for the wind
industry is that larger turbines are being offered by other manufacturers on a
derated basis as “500 kW turbines” even though they have typically been rated at
800 to 900 kW to date. This poses a new competitive risk to Windflow if larger
turbines can successfully qualify for the 500 kW FIT. At this stage it is
uncertain that this will be the case and it is possible that the current
government review of the FIT scheme will clarify this question. In any event Windflow
remains confident that there will be many sites in the UK which suit
the Windflow 500 for planning (landscape) reasons ahead of such larger
turbines, as well as for reasons of wind strength and turbulence intensity. An
example of the planning advantage of the Windflow 500 is that its tipheight is
less than 50 m, which streamlines the planning process in some areas of Britain.
During his two week visit to the UK, Mr Henderson also attended a two-day
Scottish Renewable conference in Glasgow
and had numerous discussions with investors and industr y players to appraise first-hand
the overall market sentiment. “It is clear that ‘UK Inc’ is strongly behind a
major expansion of the deployment of multi-megawatt turbines for large offshore
wind farms in the North Sea east of Britain, although there is a large
question-mark over their cost-effectiveness. It is equally clear that such wind
farms on land are only slowly becoming acceptable, and that there is a planning
preference for mid-size turbines installed as isolated turbines or small
clusters. This is Windflow’s niche right now. With the strong support for wind
power as a ‘natural’ for windy Britain, the industry view is that the mid-size
wind FIT will not change significantly as a result of the review, but the risk
is causing some potential customers to delay purchasing decisions until they
have certainty,” said Mr Henderson. “With the FIT review out of the way,
hopefully well before the end of 2011, there is a strong likelihood of getting
20 orders by then, especially as this will allow more time for turbines to come
out of the various planning pipelines.”
For further information:
Sheralee MacDonald
Marketing Manager
Windflow Technology
Ph 03
365 8960