Green ventures will make more cash, says MP
Reduce your carbon footprint and you can seriously increase your bottom line, farmers, landowners and developers have been told.
Governments are building tax, grant and planning policies around climate change, John Gummer MP, leader of the Conservative party’s Quality of Life Initiative, told a major renewable energy conference in Birmingham on Wednesday (November 22, 2006).
“If you get ahead of the curve, you will not just be a proper contributor to a universal battle on climate change, but you will also find it is one of the only ways to solvency and the only sensible way to increase your bottom line,” Mr Gummer told the 400 delegates who attended the Commercial Opportunities for Renewable Energy conference.
Organised by rural surveyors Fisher German, accountants Saffery Champness and lawyers Burges Salmon, the conference highlighted how changes in planning law are now delivering a real and credible market for farmers and landowners who are prepared to work with developers to deliver renewable energy solutions. Delegates were taken through the specific opportunities for biomass, wind-driven, geothermal and other renewable energy systems, the technologies that could deliver these and how to set up a successful project.
“Buyer beware,” cautioned Mr Gummer. “Treat alternative energy systems as you’d treat double-glazing – it has real advantages for you, but you must make a sophisticated and business-like choice, as you would with any other investment decision.”
Don’t let this lead you to do nothing, however. “That will be the most expensive decision you will ever make in terms of the cost or penalty you will face. What’s more, the effects of climate change are likely to be worse than we thought, so the cost to your business of standing still will rise.”
Building developments pose the biggest renewable opportunity, delegates were told, with the built environment responsible for nearly half of all carbon emissions. This has not escaped local authorities, noted Claire Bonham-Carter from the sustainable development group at Faber Maunsell.
“Nearly half of all authorities have included or are planning to include a requirement for a minimum of 10 per cent energy supply from renewable sources as a condition of granting planning permission on new developments.”
Senior partner with Fisher German Henry Sale explained how this presented “exciting opportunities” for a new type of arrangement the company is helping set up. An ESCO (Energy Supply Company), typically involving a developer working with local farmers, would deliver a renewable energy solution on new building developments, he said. “Once you factor in the tax benefits, you can realise a net return of over 20 per cent.”
The right advice is essential, however, urged Saffery Champness partner Jane Hill. New renewable installations can benefit from 100 per cent first year allowance under the Enhanced Capital Allowance scheme. “But not all systems are eligible and only the right business structure can claim it.”
These new arrangements will typically involve a “mesh of contracts”, warned partner with Burges Salmon Ross Fairley. “Developers need to understand how the agricultural community works, and equally farmers must understand developers need continuity of supply. There’s no standard format contract at the moment, so it’s important you take advice from professionals with plenty of experience in this sector.”
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