U-turn over government backing for wind turbine company

Peter Jones

A revolutionary wind turbine for the domestic market, which could provide 750 jobs, is likely to be manufactured in Scotland rather than abroad, after a last-minute change of attitude by Scottish Enterprise.
The move follows a report on Monday in The Times that Renewable Devices of Midlothian, a wind energy design company which has succeeded in manufacturing a noiseless and energy-efficient domestic turbine, had failed to win backing from the Scottish government agency, whose remit is to support new enterprise and create jobs.
An Australian company was prepared to invest up to £5 million in the world-beating technology but, as the Times reported, only if there was government backing to match it.
The company’s owners, University of Edinburgh graduates Dave Anderson and Charlie Silverton, who were keen to see the project stay in Scotland, had held talks with Scottish Enterprise, but a bureaucratic snarl-up seemed to have brought them to a stand-still, and it seemed as if full-scale manufacture of their machines would have to be switched to Germany.

Yesterday, however, Mr Silverton said that he had received a phone call from Neil Ross, head of Scottish Enterprise’s Scottish Venture Fund, which invests agency funds alongside private funds in promising new Scottish companies.
Mr Ross said: “I’ve spoken with the company today and arranged a meeting with them at their earliest convenience. We’ve been in conversation with the company about their equity investment proposal since February, and I hope that this meeting will allow us to move the conversation on.”
It is understood that the agency is now anxious to see the venture succeed in Scotland. The company has designed a small-scale wind turbine capable of generating 1.5kW of electricity, about half the usage of an average household. This is about twice as efficient as any other small turbine and has the added advantage of being virtually silent and vibration-free.
So far, Renewable Devices has sold about 1,450 of the turbines worldwide and has orders to supply about 300 units a month to Europe and the US — demand which means the company, which employs 40 people, has to scale up production to mass-manufacturing size, for which it needs investment of up to £10 million.
Sales had already attracted the interest of Insurance Australia Group (IAG), one of the world’s biggest insurance firms. It has bought a 2.5 per cent stake in Renewable Devices at a price valuing the firm at £49.6 million It was also prepared to invest up to £5 million in expanding the company, but it needed a written assurance of backing from Scottish Enterprise, which the agency would not give without a written assurance from IAG, the point at which talks stalled.
Last week, Renewable Devices’ owners met with Jim Mather, the Scottish Enterprise Minister, in a bid to break the deadlock. Yesterday Mr Silverton said: “As a result of the story in The Times, we have had investment inquiries from Abu Dhabi and Qatar. We are also getting the meeting with Scottish Enterprise which is what we wanted all along.”
Mr Ross said: “I’m keen to discuss the possibility of Insurance Australia Group becoming a Scottish Enterprise investment partner, which would help the company secure Insurance Australia Group as its private sector investor, with Scottish Enterprise co-investing alongside.”
The company’s turbine, which has been installed on offices and shops — including some Tescos stores, represents a significant breakthrough in making domestic wind energy viable.
Mr Silverton said that the German manufacturing company believed that under a licensing arrangement it could reduce the cost of the machines, from £6,000 to about £2,000 within two years,.
“But we would prefer to build it in Scotland,” Mr Silverton said.