Community Energy Scotland Trading Ltd.
CES Trading is a social enterprise which develops small and medium scale renewable energy projects up to 10MW to supply green energy. As a wholly owned subsidiary of Community Energy Scotland, it can make tax-free charitable donation of profits to the parent company.
CES Trading will focus on two areas of renewable energy: installing micro-generation (50kW) and developing larger scale wind and hydro developments, up to 10MW. Government backed incentive schemes support renewable energy. This provides a suitable market with a mature supply chain. CES Trading will build on the experience of Community Energy Scotland in these fields. CES Trading has a portfolio of its own projects at differing stages of development.
CES Trading is currently in discussion with landowners regarding 20 potential sites for a micro-generation pilot. These sites expect to gain planning permission with all turbines installed during early 2012.
Because of restrictions commercial developers rarely go below 6MW, while CES Trading has more flexibility. It will consider developments on merit though higher risk must give higher reward. Smaller developments are now more attractive because of the high price guaranteed by the Feed in Tariff (FiT). The transaction costs are critical on small sites – therefore less risk in costs pre planning ensures a strong return.
Renewable energy generation is a constantly growing market with UK Government targets for generation, 20% of electricity through renewable sources by 2020 and Scottish Government targets of 100% in the same time frame. The pricing support from the “Renewable Obligation” and “Feed in Tariff” guarantee an economic return on good sites. The proposed “Renewable Heating Incentive” (RHI) could provide similar returns.
A major competitive advantage for CES Trading is a flexible approach to site development. We will work in partnership with local community organisations and local landowners. This flexibility limits local opposition to later planning applications and the communities will benefit.
The social purpose of CES Trading as a trading company for a registered charity is a strength. It allows increased access to grant funding and support by Community Energy Scotland. Good relations with local authorities and communities helps the company develop a trust with project partners.
The renewable energy sector is a financially attractive investment opportunity for the company. CES Trading aims to secure strong cash flow early on and grow net profit in its first three years from £29,000 to £419,000. On showing a solid asset base CES Trading can access bank finance on desirable terms. Also by working with leading market suppliers it can reduce risks.
For more information or to discuss potential projects, JVs and/or investment in these projects please contact our CES Trading Manager