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Interview their Lilley says the "evolution" of energy pol"Some technologies will stake in six onshore windfarms, while "very offshore windfarm stake was chosen icy is "a good thing because the costs come struggle in the back end of carefully". down as the risks come down, and the risk "It needed to the right sort of age, it has gone down". the decade if they don't get needed to be notbe offar away. It needed the too They both add that if they were a develtheir costs down to a place right operating characteristics – no problems oper now, they would press ahead with that were still there after construction. There ensuring their project was Renewables Obliconsidered affordable" weren't many windfarms that fell happily into gation eligible, although they do believe the that category," say Nourse. CfD system will settle down. Lilley carries on: "Yes, five miles off the shore and As for the so-called investment hiatus, they say that very easily accessible and of a size that we can invest was more a matter of global circumstance following the alongside and have a meaningful stake. They are very big financial collapse than something created and exacerprojects – those offshore – and what we're looking to do bated by government policy. is put our toe in the water, literally. "I think what we have seen is that people who Looking forward, Nourse says there will be more offthought they had lots of money turned out to have less shore windfarms that Greencoat will take a stake in when money – such as utilities," says Nourse. the fund increases to £1 billion – provided the invest"Utilities were the mainstay of the development world ments they have already made have been successful. for onshore and offshore wind. Therefore they don't have The criteria that Greencoat UK Wind would be looking as much money as expected to do the bigger pipeline for is the same as applied to the Rhyl Flats windfarm – projects. This keeps coming back to the need for more which means that the bigger round three offshore windmoney to come into the sector. You have to be a very, farms – in deeper water and further off the coast of the very beefy investor to invest in an offshore windfarm by UK – are out of the question for now. yourself." Lilley says: "They are going to go a long way offshore "And it would be your only windfarm," adds Lilley. into areas that are more difficult. I think we need to "And if it breaks…" says Nourse. The two of them watch and we need to see how those sorts of farms operthink out loud for a moment about the financial impliate and we need to get to the scale where we can buy a cations of owning a non-functional windfarm, before he meaningful stake in them." continues: "…so we think we will be the guys they come "We've been dragged along in the wake as people back to." move out to bigger projects further out. When they start Greencoat is involved in six onshore windfarm probuilding Round 3, we'll start buying Round 2 – once jects and one offshore project with a combined capacity they've shown they operate, and operate well." of 153.1MW, so both men keep a watchful eye on governAs with all investors, it comes down to the bottom ment policy and what part of the energy trilemma - seculine. They do not want to have to invest in the risky area rity of supply, affordability, and decarbonisation – is the of project development, especially when operation progovernment's main priority. vides a steady return on investment of about 6 per cent. "It's about security of supply" says Nourse, although Lilley says: "The skills of operation are not intense. Lilley jumps in, adding: "And it's about affordability. The skills of construction and development are intense, I think you need a mix of energy. You need to properly and project management is intense, so their [utilities'] remove coal. You need nuclear. You need gas, because role is going to be in the development and the short-term you need to be able to bring capacity on quickly when ownership of large offshore assets, and then we buy for you need it." investors de-risked projects that are managed by us. However, Nourse does say the government has done "That has to be the obvious way to do it." its part in becoming the "greenest government ever". "The government seems completely committed to delivering substantial amounts of public money, energy customers' money, to ensuring that we generate a significant amount of our electricity from renewable sources by 2020," he adds. ESB Novusmodus "If we go right back to the husky photos in 2006 [as • 200m cleantech fund A part of David Cameron's show of commitment to tackling • Greencoat act as the exclusive investment advisor climate change, he was photographed hugging a husky to the Irish Utility company ESB before promising to take a lead on green policy] – it is a • Expertise in wind, biomass, wave, smart grid and completely different world. smart meter technologies "There is an affordability issue – people thought we • Based in London, Dublin and Munich had a limitless amount of money to spend on fixing the • Has a global mandate with a European focus problem." Greencoat Capital The key for renewable technologies is bringing their costs down – without doing that they will become obscure and irrelevant. If some technologies – and Nourse gives offshore wind as a prime example – are unable to bring their costs down quickly enough to a price "seen as affordable by the electorate," he says the funding and subsidies should be moved elsewhere to support other low carbon generation technologies that can bring their costs down. Onshore wind is one of the areas where costs are coming down and it is a proven technology – that is why Greencoat took the plunge earlier this year to buy up a 10 | 11th - 17th October 2013 | UTILITY WEEK Greencoat UK Wind • • • • • Invests in operating UK windfarms 2 cornerstone investors: SSE and BIS Has stake in 6 onshore windfarms and one offshore windfarm. Onshore: Little Cheyne Court (41%); Cotton Farm (100%); Earl's Court Farm (100%); raes of B Doune (50%); Bi Mountin (100%); Tappghan (100%). Offshore: Rhyl Flats (24.95%).