The founder of Shetland Wind Power, which went into administration on Friday, is to start up a new operation looking after the needs of the company’s turbine customers in the islands.
Michael Anderson from Hoswick is stepping in to buy back some of the assets of his old company which he sold to Glasgow private equity investors Nevis Capital last year.
It has emerged that other parts of Shetland Wind Power, including its new turbine orders and customer inquiry list, were bought on Friday by the Ayrshire-based renewables firm VG Energy. The rest of the company’s assets and affairs were then placed in administration with accountants KPMG.
The deals were only revealed today, four days on. Despite the new arrangements, customers who bought turbines through Wind Power will not have their warranties honoured or be able to get free servicing or new parts.
The new Wind Power customers taken on by VG are likely to be offered an American-made Xzeres turbine instead of the Proven Energy machines originally intended for supply.
About a dozen people were made redundant on Friday when Shetland Wind Power went into administration but most of them worked in the Glasgow operation and are being redeployed in other Nevis Capital businesses. The Shetland operation, at the SBS Base, had been scaled down in recent months.
Nevis Capital’s failure to succeed in expanding Shetland Wind Power after buying it in a multi-million pound deal last December has been blamed largely on the demise of Proven, which supplied its turbines until it went bust in September.
A rival turbine installer Icon Energy was also dragged under by Proven.
But Shetland Wind Power has experienced a number of other major difficulties in its UK operation including a drop in business due to the end of grant-aided community turbines and unexpected delays getting turbine applications through the local authority planning process.
The volume of permissions for turbines coming through the system has been as little as one-third of what the small-scale wind sector anticipated. Brian Aitken of Nevis Capital said that had been “a massive issue” for the industry.
It is also understood that Shetland Wind Power was losing money on installing turbines in Shetland, due partly to the lack of electricity grid connections. Scottish and Southern Energy closed the grid to more wind power due to being unable to handle the fluctuating power load.
Mr Aitken believed VG Energy would be in a better position than Nevis to drive the Shetland Wind Power business forward at a time of consolidation in the small renewables sector, which he said Nevis did not have “the appetite” for.
VG essentially left behind the bits of Shetland Wind Power that it did not want, which were then put through the process of administration. Mr Aitken said Mr Anderson was stepping in to buy some of the assets of the company he started 18 years ago because he wanted to try to support the local customers as best he could.
Mr Anderson had continued with Shetland Wind Power as its technical director and retained a minor shareholding.
Commenting on the deal with VG, Mr Aitken said: “It is far from being a perfect situation but we have tried to get the best result we could for customers – not for Nevis, not for Michael.”
VG managing director Jim Paterson said his company was “delighted” to acquire one of the longest-standing players in the renewables sector. He said VG was the number one renewable energy company in the UK and “in a strong position” to offer a range of products and services to the customer base of Shetland Wind Power.
Around 30 community groups in Shetland and about the same number of companies and private individuals already have turbines installed by Shetland Wind Power, mainly models made by Proven. With the manufacturer and supplier now both out of business their warranties are worthless but the hope now is that at least they will be able to call on Mr Anderson for repairs and servicing.
Wind Power also installed machines in Shetland made by Westwind and Evance, both of which are still in business.
News of Shetland Wind Power’s demise was first circulated by Community Energy Scotland’s team in Weisdale. The organisation has been involved in assisting groups in Shetland to get turbines, mainly the Proven 11 model which is fitted to Lunnasting and Urafirth schools, youth and heritage centres and community halls.
CES development officer Jennifer Nicolson said her organisation was keeping a watching brief on the events surrounding Shetland Wind Power and would keep community groups informed of developments.
Already the owners of at least seven of the biggest Proven machine, the ill-fated P35-2, have been waiting for help for two months after being forced to stop their machines due to a safety flaw, costing them considerable income from subsidy and selling their power.
Sandwick Social Club has been losing out on around £1,000 a month in subsidy on its P35-2 while hoping Shetland Wind Power could arrange a repair or a swap for an alternative make of turbine. But now the club’s predicament is worse. Chairman Neville Martin said: “Basically we are left with a load of junk standing there!”
The P35-2 was Proven’s biggest turbine model and its flagship machine until a catastrophic mechanical fault resulted in incidents of blades and the rotor head flying off.
After Proven’s financial backers pulled out and put it into receivership it was snapped up by Irish multinational Kingspan, which washed its hands of Proven’s customers and discontinued the P35-2.
It has recently relaunched the two smaller turbines under its own brand names, which should ensure that spare parts continue to be available.
Confidence in the small wind sector has been badly damaged by the three major business collapses of the past two months. Shetland Wind Power’s demise came just days before Shetland hosts its first conference and exhibition on renewables.
Dynamic Shetland on Wednesday 16th and Thursday 17th November will bring together over 160 people involved mainly in wind, wave and tidal power to discuss exploiting the islands’ free energy sources.
Crofters Commission convener Drew Ratter said this week wind turbines represented one of the greatest opportunities ever seen for crofters. He viewed the loss of Shetland Wind Power as “very damaging” and said he hoped the situation would be sorted out.
Sandwick Social Club had a six-year struggle with Proven to get a working turbine and the experience may have put paid to its members’ interest in wind energy. Mr Martin said his committee was meeting on Sunday to decide a way ahead. He said: “Will we bother to see about putting another turbine? They maybe won’t be that bothered after having their fingers burnt.”
He added: “I think people need to be very wary of investing money. You are spending a lot of money up front. Things can go wrong with wind whereas with other renewables maybe things are less risky.”