UK's Bizzenergy plans to build six wind farms
Date: 02-Sep-02
Country: UK
Author: Eva Sohlman
He said Bizzenergy will form a new company Bizzgeneration to raise 50 million pounds ($77 million) needed for the construction of the six wind power sites with a capacity of up to 100 megawatts.
"There is a general push towards renewable energy in this country where there is a lack of it so companies like us are getting very interested," John Devaney, the company's chief executive and founder told Reuters in an interview.
Bizzenergy is funded by U.S. venture capital firm Atlas Ventures and Swiss-UK firm Geneva Energy Ventures and is currently in negotiations with five institutions, including one major U.S. investment bank to fund the projects.
The wind farms would be funded through a mix of debt and equity and was expected to be ready within the next six months, he said.
Most of the wind farms will be situated in the windy, western parts of Scotland and the first project is expected to be in operation within the next 18 months but he declined to say name the sites or reveal how many turbines each plant would have.
He said the company had not yet applied for planning permission as that would come in later in the process but that he was optimistic it would be granted.
"As part of its new drive for renewable energy, the government has recently developed a view that it won't let people unduly block projects so I'm confident we'll get it," he said.
He said the main motor driving the projects was the UK government's Renewables Obligation, which forces electricity companies to supply three percent of electricity sales from green energy sources from 2002, rising to 10.4 percent in 2011. or pay a penalty.
Britain currently takes about 2.8 percent of its power from renewable energy sources such as wind, solar and biomass.
The remewables industry is expected to benefit from the United Nations' Kyoto Protocol to cut greenhouse gas emissions - seen by many as a contributor to global warming - from the burning of fossil fuels such as oil and coal.
Under the Kyoto protocol, developed countries have agreed to reduced greenhouse gases by 5.2 percent of 1990 levels by 2008-2012.
Venturing into power generation was also a means for Bizzenergy to hedge against fluctuations in the energy trading market, he said.
Devaney was confident Bizzgeneration would find its niche in the UK power market which is suffering from falling prices and 15-20 percent in excessive capacity.
Wholesale electricity prices have fallen about 25 percent since regulator Ofgem launched the new trading arrangements (NETA) in March last year and are now among the lowest in western Europe.
"There will be many more companies going bankrupt and especially those with coal-fired stations but I'm not worried," he said, adding "There will be significant growth in renewable energy."
He said Bizzenergy was trying to reflect the recent price fall in its prices to small business clients by cutting them by six to eight percent to 4.8 pence per kilowatt hour in the last year.
Britain's power suppliers have been criticised for keeping up their prices although wholesale prices have plummeted.
Bizzenergy has previously said it is considering a 100 million pound listing on the London stock exchange but those plans have been delayed due to the current poor business climate.
"We will be looking at that once the stock market has recovered. Maybe sometime next year," he said.
