United Kingdom

United Kingdom

Organic growth in a global market

A company profile of Britain's Renewable Energy Systems (RES). From its origins in wind turbine design nearly two decades ago, RES has gone full circle through the business of wind farm development and construction to install its 1 MW prototype. The turbine is seen by RES as a natural extension of its expanding range of activities.

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"A developer and builder of wind farms" is how Renewable Energy Systems is most consistently described by its managing director, Ian Mays. But there is much more to the British company than that. It is one of the broadest based wind energy businesses in the world with a distinctly international outlook. In addition to its well known wind farm development and construction capability, RES has an expanding operations and maintenance business. "We are a financier too, in the sense that we organise finance and we invest in a number of projects," Mays adds. Much of this investment is provided by its parent company, the Sir Robert McAlpine construction group, which, says Mays, is "firmly behind" its wind business. As a wind farm owner -- having invested 100% of the equity in two UK wind farms -- RES can also claim to be a generator and seller of power. And, adding yet another string to its bow, it hopes also to be a wind turbine manufacturer with its new 1 MW machine.

Despite this wide ranging activity, the company's focus remains very much on the development and building of wind farms. It has a portfolio of over 1000 MW in various stages of development spread over the UK, Ireland, USA, Portugal, France, China, and the Caribbean. RES began its development activities in Britain in the early 1990s, when it won its first contracts under the UK's Non-Fossil Fuel Obligation (NFFO). Since then it has been involved with building eight wind projects in Britain and has a further 20 in the pipeline -- all with NFFO power purchase contracts -- bringing the capacity on the UK drawing board to over 200 MW.

RES's 39-strong workforce -- two-thirds of whom are engineers or scientists -- provides most of the development skills it needs. "We have built up a lot of technology around site assessments, energy yield assessments, noise and visual impacts and we now have a very good base in-house to be able to take projects forward," says Mays. When RES does use consultants, it is chiefly for specialist services such as bird studies or to provide landscape assessments where independently conducted studies are regarded more favourably by planners, he explains.

Ireland, America and China

The first of RES's ventures outside England was in Northern Ireland where it teamed up with B9 Energy from Larne to develop three wind farms under the first Northern Ireland Non Fossil Fuel Obligation. The B9 and RES partnership went on to become the turnkey contractor for constructing two more wind farms in the province and also bid successfully for more contracts. Over the border in the Republic of Ireland RES and B9 secured power purchase contracts for wind projects under the Irish system of renewables support -- the Alternative Energy Requirement.

Following the pattern established in Northern Ireland, RES forged joint ventures with local partners for all its overseas business deals. But its first foray into the US market is rather more complex than most. Here RES is part of WindCo -- an international consortium set up to repower the Californian wind farms once owned by a local company FloWind Corp. WindCo also consists of M&N Wind Power (a partnership between NEG Micon and Japanese financier Nichimen) and FPL Energy, a huge US energy company. According to Mays the "complicated deal" originated from informal talks between RES and NEG Micon. "We had been looking at the US market and this was an opportunity which came out of conversations. We are basically doing a balance of plant and project management." Commenting on why he thinks a British company is needed on the wind scene in California, Mays says: "We like to think we have got something we can add."

Although the collaboration with its partners in WindCo is a one-off exercise, Mays insists that it is only the first step for RES in the United States. Indeed, the company is not interested in single ventures in any country. "Our approach has always been and will always be that if we get involved in a market, we want to be in there for the long term to assist with developing the resource that that country has, to help with its CO2 savings and to develop a business for ourselves." He adds: "We like to be where a market is being established and to help make sure the market develops for wind generally."

With this philosophy, China -- estimated wind resource 230,000 MW -- is an obvious target. A joint venture with a local company for some demonstration projects in Shangdong province, in the north east of the country, is expected to result in the first wind farm in the region next year. "What we are trying to do is bring the benefits of our wind farming skills to develop their wind resource cost effectively and to secure a market share with our joint venture partners," says Mays. Similar ventures are already in place in Portugal, France (Windpower Monthly September 1998) and Jamaica.

Twenty years ago

Back home in the UK, RES is based at St Albans, only 16 kilometres from the Hemel Hempstead headquarters of its parent, the Sir Robert McAlpine construction group. It began life in 1980 within McAlpine's projects development department. At the prompting of Britain's then Department of Energy the wind group was established to develop a vertical axis wind turbine, moving on to horizontal axis machines and general wind energy research and development in the late 1980s. It began trading as a distinct entity in 1989 -- the year the Electricity Act was published which led to support for renewable energy under the NFFO. "That created the opportunity for a commercial market which we went into with gusto," says Mays.

RES believes its early technological and R&D background stood it in good stead to begin developing wind farms. Now the wheel has turned full circle and the company has put its wind farm developing and operating experience back into wind turbine design and manufacture. Coming relatively late to the design of a 1 MW turbine, RES has been able to start with a clean sheet of paper, says Mays. But he admits its new 1 MW variable speed, variable pitch turbine has been a long time on the drawing board.

Prototype 1 MW

The prototype of the 1 MW has now been installed at Slievenahanaghan in Antrim, Northern Ireland. Commissioning took place in late November. The next step is to use the turbine in a wind farm to give it a track record. But Mays is adamant that thereafter it will have to stand on its own. "We have every intention of making sure that the machine is a world beater," he says. "But it will have to compete for RES's business along with everybody else's wind turbines."

Although in its present form, the RES 1 MW turbine is a land based version, the company intends extending it for offshore use. Mays points out that RES has maintained an abiding interest in offshore wind. In fact, it was the reason why the company first entered the wind energy business. The McAlpine group -- with some experience already in building oil and gas platforms in the North Sea -- was originally attracted by the vertical axis wind turbine because the machine had been conceived with an offshore application in view. But when early prospects for an offshore market in Britain failed to materialise, RES dropped the VAWT technology, which it had been unable to make cost effective for land based systems. "But we have always maintained our interest in offshore throughout," he claims. "Now that the offshore market has started to come back, we have a focus for it."

Future image

RES's purchase last year of two British wind farms marked the beginning of its latest role as generator and seller of clean power. Mays states that generation is an important part of a diverse, broadly based and integrated business. The move could be an astute one, with opportunities now emerging for marketing "green" power within Britain's liberalised electricity market.

Today RES boasts an annual turnover of around £17.5 million, and growing. The workforce is growing too, necessitating a move from its present modern head office -- tucked away discreetly behind St Albans historic city centre -- to more spacious accommodation in a refurbished office building a ten minute walk away. Although the company's main technical resource remains in St Albans, RES has three other UK offices -- in Scotland, Wales and Northern Ireland -- and is developing overseas offices around the world to service local markets.

Despite its name, the company's focus so far has been exclusively on wind energy. But a change in corporate image is underway to reflect RES's intention to move into other renewable technologies. Mays points out that European governments will need contributions from a mix of renewables as well as wind to meet their commitments by 2010. "We want to participate in that market." He agrees that RES's plans sound ambitious, but stresses that the important factor is that they are carefully planned. "We need to make sure the company's growth is at a sensible rate," he concludes.

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