EXCLUSIVE by Scottish Energy News
A Scottish renewables energy chief has told how the Brexit referendum result – for UK Independence from the EU-bloc – kicked the bottom out of his company’s market.
In order to survive, Absolute Solar and Wind has since had to entirely re-target its commercial focus away from ‘tariff-marketing’ sales and now instead focuses on the combined heat and de-carbon benefits of renewable energies.
But even now there is still not enough drive from the Scottish Government in its draft <Scottish> Energy Strategy to lead this market revolution, said Graham Provest, Managing Director, ASAW.
Absolute – a family-owned business set up 10 years ago – installs contemporary low carbon technologies in solar, wind, biomass and energy-efficiency solutions.
But if faced a ‘nightmare on Brexit street’ when the referendum result was first announced last year. Provest said:
“When the Brexit result came through the main suppliers closed their doors to clients at the Royal Highland Show, near Edinburgh.
- “The very next day, every main supplier had removed any pricing and refused to agree any pricing structure or strategies
- “Client confidence hit an all time low – and every farmer immediately commented; ‘There goes my European subsidies’.
- “Moreover, all funders removed support for projects with immediate effect – Absolute had three large scale wind projects under development where the funding was withdrawn
- “Since then, the continuation in the drop of the tariff levels did not stop and in a number of cases increased and the biomass CHP tariff reduced by 50% over six month period.”
Speaking at the seminal Renewables After Brexit conference held by the Centre for Energy, Petroleum, and Mineral Law & Policy at Dundee University, he then explained how Absolute survived the ‘Bre-ferendum’.
Provest said: “Our sales team made immediate contact with all key clients to review where they were and what their needs had now become.
“We remove the sales discussions around tariffs and replaced with energy-saving and energy-offset opportunities – including tax benefits – and we increased the marketing message about what benefits the client will attain without total reliance on tariffs or grants.”
Absolute also subsequently looked to identify the opportunities for growth within the Scottish Government <Scottish> Energy Strategy and at the development of heat-offering and district heating schemes.
Now – 18 months on from the Bre-ferendum – Provest said that ‘client confidence is still very low’ while ‘funder confidence is low but growing.”
He added: “The ongoing fluctuations in the values of the £ and the Euro is still causing huge instability and has – regrettably – seen the commercial collapse of Scottish energy installation partners and competitors. (see also below)
“While 65% of all energy used in Scotland is in heating, there is <still> a lack of focus in the Scottish Energy Strategy to identify key opportunities – so where is the <government> drive and support to SMEs? “
Letter from renewables supplier to Absolute Solar and Wind Energy on post Bre-referendum pricing:
30 November 2017
“We are sure you are aware the UK economy remains fragile with uncertainties around the value of the pound and Britain leaving Europe is affecting exchange rates across a broad range of products and services.
Whilst most of the products that ****** provides are manufactured in the UK, the raw materials are purchased from Europe in Euros or further afield in US dollars.
As a result of this we are seeing increasing pressure on price from many manufacturers we represent.
We are working closely with them to minimise these price pressures as much as possible and bring some price certainty to our pricing for 2018, however, we are unfortunately unable to avoid some increases.
“As a result of the above we can confirm that from 1st January 2018 all ***** steel products will increase by 6% and ******* fans will increase by 10%.”
21 Dec 2017