July 3, 2011
U.K.

Farmers enouraged to cash in on the scramble for wind

By Robert Mendick, Chief reporter, The Telegraph, www.telegraph.co.uk 2 July 2011

Wind farm developers are exploiting a green energy subsidy worth billions of pounds to persaude landowners to allow turbine developments to be built in their fields.

It is the new gold rush sweeping its way across Britain. Except the scramble is not for some precious metal or rare commodity but for wind.

For after years, struggling to eke out a living, farmers are being offered a new way to get rich – by energy speculators determined to build wind turbines on their land.

An investigation by The Sunday Telegraph reveals developers are exploiting a green energy subsidy, worth billions of pounds, to persuade landowners to turn their fields over for wind farms.

The speculators – who have been compared to door-to-door double glazing salesmen – are ‘cold calling’ farmers with offers often too tempting to refuse.

One farmer in Northumberland has reported receiving 12 separate offers from developers to build turbines on his land.

A single, 400ft-high turbine can earn a farmer as much as £60,000 a year – far more than the average farmer’s income of just over £47,000.

One turbine can generate more than £13 million over the course of its 20-year lifespan, around half of it from the sale of the electricity it generates, and the other half through a consumer subsidy added on to electricity bills.

Opponents claim wind farms are blighting the countryside while failing to deliver a reliable supply of electricity, despite the cost.

Figures released last week showed the amount of electricity generated by UK wind farms actually fell last year because of the lowest average wind speeds this century.

“This is like a gold rush but for a wind subsidy,” said Andrew Joicey, a landowner who campaigns against wind farms.

Mr Joicey, spokesman for Save Our Unspoilt Landscape, added: “The upshot is the race for wind is threatening to blight the countryside. The levels of planning applications are staggering. They are preying on hard up farmers.”

One cold-calling letter passed to The Sunday Telegraph reveals how energy companies are trawling the Land Registry in the race to find suitable sites for turbines.

The letter, sent by a company in Suffolk to a farmer in Northumberland, states: “By hosting a wind energy project, this could provide a secondary source of income by diversifying the use of the land, which we would estimate could be in the region of £18,000 per turbine per annum.”

The letter suggests the piece of land identified would be suitable for four wind turbines with a capacity of two to three megawatts.

Dr John Constable, director of the Renewable Energy Foundation, a think tank which has criticised the cost of green subsidies for wind farms, said each turbine, which would need to be about 400ft high, would generate in the region of £660,000 a year in income for the developer.

Approximately half of that income comes from selling electricity to the National Grid but the rest – about £330,000 – comes in the form of a consumer subsidy intended to encourage the growth in wind energy.

In other words, the one field in Northumberland identified by the energy company would generate about £2.64 million in income a year.

According to the terms offered by the energy company the farmer would receive £72,000 a year. The average UK farmer currently enjoys an income of just over £47,000 a year.

But experts suggest the offer is far too low. Landowners are now seeking about ten per cent of the annual turbine income as rent – or in this case around £60,000 for each turbine.

The letter was sent by Gaoh Energy, a wind energy company based in Lowestoft in Suffolk, which has been running for less than a year and whose headquarters were officially opened by the Energy Minister Charles Hendry.

The letter written by Paul Smith, Gaoh’s development manager, states: “Dear Sir/Madam, Gaoh Energy Ltd are developers of onshore wind energy projects in the UK.

Using mapping and satellite imagery, we search for sites with the potential to accommodate wind turbines and via the Land Registry identify the ownership of these prospective sites.

It is through that method we have identified that the landholding under your ownership may have the potential to support wind turbines.”

Gaoh – meaning ‘spirit of the winds’ in a native American language – goes on to suggest a feasibility study be undertaken. The study, it adds, “would be carried out confidentially” and take place within a fortnight.

Mr Smith told The Sunday Telegraph last week the letter was “standard” and had been sent out across the country. He said: “I am sure other companies do it.”

Mr Smith disputed Dr Constable’s figures. “They are not wildly wrong but they are not right. The ratios are not correct,” he said.

“In the next decade the government is offering approximately £35bn of subsidy to renewable generators, reaching £6bn a year in 2020, with the whole scheme costing up £100bn in subsidy alone from 2002 to 2030.

“With this sort of money on the table investors and developers are feverish with excitement. The question is whether consumers will be willing or able to shoulder such cost premiums.”

The complicated system of green energy subsidies – first introduced by the last Labour Government – are to be reviewed by the Coalition with a consultation beginning in the summer.

The Renewables Obligation scheme was intended to offer inducements for investment in green technology but critics say it is far too generous for onshore wind projects.

Another subsidy system – called Feed-in Tariffs – is suitable for smaller scale developments but is also reckoned to be extremely lucrative. That too is under review.

A land agent in the north of England has set up a renewable energy department to liaise with farmers looking to build turbines on their land.

Ben Collard, director of renewables at George F White, said he was advising his clients to set rent on land used for a wind turbine at ten per cent of the estimated income.

Mr Collard said: “One of our clients has a drawer full of offers. He has at least 12 offers. I would say at least ten per cent of the total revenue should be the starting point for negotiations.

“I have turned up on the drive of a client and I have bumped into a cold caller. Developers have been driving around in their Audis cold calling, just knocking on doors. Some people have compared it to the new double glazing. It’s a busy sector.

“Wind turbines are far more profitable than farming. Some farmers are worried about upsetting the neighbours and some don’t care. They don’t give a hoot.”

According to RenewableUK, the industry body representing the wind energy business, there are 3,352 turbines currently operating across the UK with another 1,153 under construction.

A further 1,966 have planning permission while planning consent is being sought for 3,265 more turbines.

Nick Medic, a spokesman for RenewableUK insisted the green subsidies will add only about one per cent to electricity bills by 2020 but that the alternative was to rely on fossil fuels imported from abroad.

Mr Medic said: “Looking historically just at the last decade, both the price of gas and coal has more than doubled, with some steeper spikes along the way.

“It would be prudent to diversify and balance our energy mix, with a greater share of domestically produced energy from renewables.”

A Department of Energy and Climate Change spokesman said: “It is vital that our support for renewable electricity both encourages investment and represents value for money for consumers.

“We will shortly be consulting on support levels for all renewable technologies under the Renewables Obligation.”