Second wind?

In the mid-1980s, Scotland helped invent the wind turbine, but most are now made in Denmark and Germany. That market is already lost, but Scottish firms are now leading the way in microgeneration, producing mini turbines that fit on roofs.

The funding that lies at the heart of the sector’s domestic success, however, is in doubt . Currently, householders can claim up to 35% of the cost of a turbine, and community groups up to 100%. But that is now under review.

“Our plan is to build 10 times the number of machines over the next three to five years and hopefully halve the price of the product,” said Andringa.

He worked in the Dutch large turbine industry before relocating to Ayrshire. “If we halve the price of the product, we can do without grants. If the grants are stopped before that, we will never get there.”

An independent research firm has been commissioned to review the funding for microgeneration, which is administered by the Energy Savings Trust and Highlands and Islands Enterprise. Called the Scottish Householders and Community Renewables Initiative, it is funded by the Scottish Executive.

The £2.2 million scheme ran out of money late last year and was topped up with £250,000, said a spokesman for the Energy Savings Trust. “That was because there had mostly been community groups accessing funding before, but lots of householders started taking up funding.”

The Executive then announced the review. “The review was commissioned to look at how best to deal with the various applications that are made,” said a spokesman for the Department of Enterprise and Lifelong Learning. “The ministers have to decide now and we expect a decision imminently.”

Chancellor Gordon Brown allocated £50m for funding microrenewables in last week’s Budget, but this only applies in England and Wales, said the Executive spokesman.

The stakes are high. When Scotland previously missed out on large turbine development, a field in which it led, the governments of Denmark and Germany put in the work to establish their own domestic markets. Their industries now employ 40,000 people and have a turnover of €8 billion a year. Half of that business is located in Denmark, though most of the turbines are exported.

Scotland’s industry was not well enough supported at home to keep the manufacturing work based here.“I used to make large-scale wind turbines in the Netherlands at the end of the 1980s and in Denmark,” said Andringa. “The support there was not so much capital for companies’ research and development, it was support for building numbers, getting a home market for the products off the ground.”

Now pioneering companies such as Proven Energy, Edinburgh’s Renewable Devices and Glasgow’s Windsave are trying to hold on to their world lead in micro-turbines.

“The opportunity is huge,” said David Anderson, co-founder of Renewable Devices. “An Energy Savings Trust report estimates the market for small energy is going to be £20bn by 2050.

“I think Scotland is doing better than the rest of the UK. People said that rooftop renewable turbines were impossible, but now we have one within a few dozen miles of anywhere in the UK, so if people are sceptical we can tell them to go and have a look and a listen.”

Noise had been a major factor, but Renewable Devices invented a system which makes turbines quiet enough to be used domestically. The company has supplied turbines to large firms such as BP and Johnson & Johnson, and Sainsbury’s has also used small turbines.

The business is still relatively small. Proven makes £1.8m a year in revenues and reinvests profits in development, according to Andringa, while Renewable Devices makes revenues of £5.5m. It has a contract for 2000 turbines to be supplied to Scottish & Southern Energy.

“Our order books are full for the next two years,” says Anderson. Whether that remains true across the nascent industry depends largely on the ministers’ decision on grant funding that could come within days.