Rule changes put wind behind turbine maker

Dec 21 2009 by Peter McCusker, The Journal

A GREEN energy company which has recently relocated to the North East believes looming regulatory changes will power its sales to over £40m in the next five years.

Wind turbine maker Vertical Wind Energy forecasts a growth in its revenues from a virtual standing start to around £44m by 2014.

The firm, which started in Northern Ireland, moved to Prestwick Park, near Newcastle Airport in the last few weeks, where it currently employs 10 sales, support and customer services staff.

It anticipates it will benefit from regulatory changes coming into force in April which will see will see green power generators receive a fee from utility companies, through a new statutory levy known as the feed-in tariff.

VWE chief executive Tony Gordon said: “These are exciting time for micro-generators. We expect sales to grow quickly over the coming years.

“Supermarkets such as Tesco and Sainsbury’s are already using this technology and we expect to see our products stimulate a lot of interest in the farming community.

“Our new, larger, 6kw turbine will come to the market in February and we expect this to be of interest to the larger users.

“We will create jobs in the region over the coming years and within five years we believe we can achieve annual sales of around £44m and we could have around 40 employees in the North East by then.”

VWE established its base near Newcastle Airport with the help of £1.2m of funding led by Newcastle-based venture capital firm NorthStar Equity Investors (NSEI) and North East venture capital syndicate represented by Tiger Corporate Finance.

The company sources its parts from around the world, although they will be assembled by a Gateshead company which is expected to create jobs as orders grow.

The firm’s smaller 3kw turbine costs £12,500 plus installation costs and it is estimated to pay for itself within seven to nine years, with a lifespan of over 20 years.

The feed-in tariff will see the utility companies pay micro-generators 23p for every kilowatt of power generated. An average family household uses somewhere in the region of 100kws of power a day.

Mr Gordon added: “We were attracted to the North East because of the region’s strategic commitment to all forms of wind generation, evidenced by the work of Narec in Blyth (the New and Renewable Energy Centre) and the strong skill base.

“The availability of funding from NorthStar and the help they gave us in building the investment round is vital to our commercial success.”

NSEI investment manager Alex Buchan said: “We feel the micro-generation market is very attractive, particularly in the light of feed-in tariffs, the details of which were announced last week and are due for release in April.

“We believe VWE has a robust and cost-effective technology which will for the first time allow businesses and domestic customers to invest in renewable energy with a realistic payback, subject to site suitability.”