Earthmill putting its energy into helping farmers cut their bills

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NOBODY living in the South West needs any lectures about the destructive power of gale force winds.

We may fear nature, but it can be harnessed to work for us. Earthmill wants to use wind energy to provide our hard-pressed farmers with a lifeline. There’s nothing idyllic about farm life when a £100,000 energy bill thuds on your door mat. Entrepreneur Mark Woodward, who is Earthmill’s commercial director, believes the company’s time has come.

The Wetherby-based company, which was established in 2009 by Steve Milner, has become one of the UK’s biggest wind turbine installers, but you sense that it has barely started to get into its stride. Last year, UK private investment firm Connection Capital provided £4.1m of growth capital to support Earthmill’s expansion.

Mr Woodward explained: “Farmers use a lot of energy and their bills were going through the roof. Life’s not easy for many of them. So giving them an opportunity to take control of their energy bills seemed like a good business to be involved with. It was something they seemed very interested in doing.”

Today, Earthmill is owned by Mr Woodward, Mr Milner and investors, who have retained a 25 per cent stake. Perhaps surprisingly, Mr Woodward started his career in a sector far removed from windswept farmland.

“I used to be MD of a workflow software company based in Leeds employing over 150 people which we sold in 2006,” he recalled. “I then set up a business investing in early stage start-up businesses in Yorkshire.”

Mr Woodward was looking for a sector that offered strong long-term growth prospects, and renewables caught his eye.

He added: “Climate change isn’t something that’s going away anytime soon. Just look at the events of the last six weeks.

“In many ways, renewable companies are like the software businesses were in the 1980s. It’s always very exciting getting involved in businesses where everything’s new.

“I’d already invested in a business that did LED lighting systems called Carbon Reduction Technology, and then I met Steve (Milner) in our local pub. We both live in the same village. He asked me to look at his business plan. Once a month, we’d meet up and have a look at the plan and discuss how things were progressing.”

Canny Yorkshire folk were centuries ahead of the game when it came to wind power, according to Mr Woodward.

“Using wind to power farms is not new. In fact, one of the first wind turbines in the world was established in Yorkshire over 500 years ago in Beverley.”

Mr Woodward, in common with many of us, saw his household energy bill go up by 15 per cent last year. Farmers faced with a similar increase could lose everything.

“Farmers can have energy bills of anything between £10,000 and £100,000 a year, and an extra 15 per cent on that can make the difference between making a profit or a loss,” he said. “The whole idea of distributed wind is that you develop the power where it’s going to be used, without having to ship it all over the country.”

Earthmill’s business model revolves around the installation of one or two small wind turbines near to the farm that will use most of the power. Many consider this a better option than installing big wind farms that feed large quantities of power into the grid for use anywhere in the country.

“Any excess that they (the farmers) don’t use goes back into the grid,” said Mr Woodward. “It struck me as quite a logical and sensible model. It doesn’t require turbines that are 100 metres high. The turbines that we supply are relatively small and fit well with the farm buildings. We’ve got just over 150 clients who have had turbines installed, the majority are in Yorkshire. East Yorkshire, in particular, is ideal because you get an even flow of wind.

“Our very first client, was Wold Top Brewery in East Yorkshire. They had quite high energy bills. They’ve now got two small-scale turbines that provides 90 per cent of their energy, reducing their energy bills substantially.

“Obviously, the wind doesn’t blow all the time. It will never provide 100 per cent of the solution. On average, we reckon, in Yorkshire, the wind turbine is turning something between 85 and 90 per cent of the time.”

The company, which had a turnover of £10.5m last year, has around 140 applications going through the planning process. It can take between six months and a year to get planning approved and the supply connected to the grid.

“Next year, we hope to be installing 80 turbines, across the North of England, Scotland and Wales,” said Mr Woodward. “We’ve grown from one man in the back of his garage four years ago, to 25 staff today. We’re recruiting another five right now, in various areas of business.”

The workforce includes former members of the armed forces, who enjoy working at height.

Mr Woodward added: “There are 300,000 farmers in the country, and there’s less than 10 per cent of them who have wind turbines. Last year, we went out and raised some money that allows us to provide turbines to farmers free of charge. This gives the benefit of reduced price energy and an annual rent of up to £30,000 without the need to make any upfront investment.”

In the early days, the team behind Earthmill had to be patient, but persistent, in their talks with lenders.

Mr Woodward said: “With wind being a new technology, initially the banks were very risk averse. They want personal guarantees if they’re going to lend you any money, so we needed to raise equity finance. You do develop some quite good practices because cash is tight.”

Many developers complain about the tortuous planning process. Does he share their frustrations?

“There have to be planning rules, because it would be wrong to install a turbine in the middle of a village, or next to a listed building. However, more clarity over planning processes would be helpful,” Mr Woodward said.

“The localisation ideas are difficult to implement. People are always going to have the view that it’s ‘not in my backyard’. The UK is the windiest country in Europe and we need to harness this unlimited free energy source.

“Sixty five per cent of people believe that wind turbines are a good thing, but often a few very vocal objectors can make it appear that everyone is anti-wind.

“Wind may only be a temporary solution, and in 20 years, there may be a revolutionary new technology that is cleaner and cheaper. If that is the case, a wind turbine can be taken down in less than a day, hardly leaving any trace it had been there at all. Try doing that with a coal or gas powered station!”

greg.wright@ypn.co.uk