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Mar 28, 2010

Wealthy landowners make millions in the wind rush


Some of Britain’s richest landowners are set to earn millions by building wind farms to exploit the lucrative system of subsidies for generating renewable energy.

Among the biggest potential beneficiaries is the Duke of Roxburghe, whose planned 48-turbine scheme on his Scottish estate would generate an estimated £30m a year, shared with developers. About £17m of this would come from subsidies from consumers.

Others seeking to capitalise on the new wind rush include the Duke of Beaufort, Sir Reginald Sheffield, father of Samantha Cameron, and Michael Ancram, the Tory grandee.

The growing interest in wind farms stems from the government’s subsidy system. A typical three-megawatt turbine will generate about £670,000 income a year, of which £350,000 comes in subsidies. Since the machines cost £2-3m and have a lifetime of about 25 years, the profits are considerable, even after running costs are deducted.

Many schemes have gone ahead despite objections from local residents concerned about blight and from economists who bridle at the “excessive” cost of the subsidy system.

However, developers, landowners and wind farm supporters say Britain must accept changes to its landscape, plus the cost of subsidies, as the price of cutting CO2 emissions.

One of them is RidgeWind, a company set up by Hg Capital to seek out large landowners to set up wind farms. Its website declares the company’s turbines are “contributing to a cleaner environment and reducing global warming”.

Last August RidgeWind switched on an eight-turbine wind farm at Bagmoor, part of the 3,000-acre estate of Sheffield, the father-in-law of the Tory leader. Industry estimates suggest this should generate an income of about £3.5m a year, shared with developers.

RidgeWind will soon erect 10 more turbines, each about 410ft high, on the Ellingham estate in Northumberland, owned by Lady Belinda Gadsden, whose title dates back to 1642.

Critics say it is ironic that the Renewables Obligation certificate (Roc) scheme was created by a Labour government but is handing large profits to investors and country landowners.

Under the system, renewable energy generators can claim a Roc certificate for each megawatt hour of electricity produced. A 3MW turbine produces about 7,000 megawatt hours a year, with the electricity fetching £320,000 and the Rocs another £350,000 at current prices.Power companies are obliged to buy Rocs to meet government targets for renewable power but pass the cost to consumers. They also take the bulk of wind farm profits.

Source: The Times. Read the full article here.