The  turbine firm, based just outside Edinburgh in Midlothian, wants to build a Scottish factory but fears it may have to accept an offer from a major European firm to make them in Germany, despite securing promised backing from one of the world’s biggest financial firms to site the factory in Scotland. (Shades of MicroEmissive Displays history which had to estabish itself in Germany)

“We are caught in a Catch-22 situation,” says (Right to Left: Courtesy James Glossop/The Times) Dr Charlie Silverton who, with fellow Edinburgh University graduate Dave Anderson,  founded Renewable Devices in 2002.

The company already has enough orders to sustain 100 jobs and sees demand for its product eventually leading to 750 jobs. In three years, the pair has successfully designed and installed over 100 of their turbines on offices, shops and houses, overcoming the problems of other domestic-scale wind generators, such as damaging vibration and noise.

A novel rotor design and sophisticated electronics make their machine twice as effective in harnessing wind energy as rival designs. By encasing the blades in a circular rim, they have also made their turbine virtually noiseless. “It makes about the same noise as a refrigerator and it is quieter than a tree rustling in the wind,” says Anderson.

At moderate wind speeds, the turbine can generate 1.5kW of electricity, about half that used by an average household and much more than that produced by other small turbines.

Growth needs increased production
In the last two years, Renewable Devices, which now employs 40 people, has sold 1,450 turbines. Tesco has put them on supermarket roofs. They have also been installed at the Sky Tower in Auckland, New Zealand’s highest building, and the Corning Tower in Albany, the tallest building in New York State.

“We have orders to ship over 100 a month to the US and 200 a month to Europe,” said Mr Anderson. Now the company urgently has to increase its production facility to meet demand.

The fact that this small company has managed to sell 1,450 of its machines world-wide at a price of about £6,000 each is evidence that this is how the rest of the world sees it. It seems extraordinary that a bureaucratic snarl-up is preventing the creation of what could be a major manufacturing operation, especially if Renewable Devices’s designers succeed in their goal of reducing the price of their turbines to about £2,000.

Investor & backer requirements
Insurance Australia Group (IAG), which is one of the world’s biggest insurance companies and committed to environmental sustainability, has bought a 2.5% shareholding in Renewable Devices at a price valuing the company at £49.6m.

It wants to invest up to £5m more to fund the expansion Renewable Devices needs. But IAG policy dictates that any investment must be backed by government money. So earlier this year  Anderson and  Silverton approached Scottish Enterprise.

The agency told them that, partly because of European Union rules on subsidies, it could not deal with them directly, and any approach would have to be made by a private investor who had thoroughly checked their company’s viability.

Although IAG has done these checks, it is not willing to make any written promise to invest until it has a written guarantee of Scottish Enterprise support which, the agency says, it cannot issue without a written application from IAG.

Germany able and willing
Silverton said a major German firm with car-making interests is keen to build the factory in Germany. “We have been told it could employ up to 750 people,” he said.

The two entrepreneurs met enterprise minister Jim Mather last week to try to break the deadlock. Yesterday Gerald Kelly, Scottish Enterprise director of investment, said: “Our co-investment model means that we can’t invest directly with a company but instead we co-invest alongside private-sector partners, who are responsible for carrying out due diligence on specific deals.
 IAG is currently not one of [the] approved partners but we have indicated to the company that we would be more than happy to discuss this opportunity with IAG with a view to bringing them on board.”

A Scottish government spokesman said that Mr Mather’s aim is “to work with the company and Scottish Enterprise to try to find a solution”