French Farmer is New Sun King
March 2nd, 2009This is an interesting piece that looks at how France is using guaranteed contracts to buy power to stimulate alternative energy projects.
It sounds better toward the end, where they’re talking more about decentralization, with risk and profits being spread around to larger numbers of people.
Via: Reuters:
Bright winter sun dissolves a blanket of snow on barn roofs to reveal a bold new sideline for Jean-Luc Westphal: besides producing eggs and grains, he is to generate solar power for thousands of homes.
Economic crisis has cast doubt on funding hopes for many big renewable energy projects, but the giant panels built into roofs on this sloping farm at the foot of the Vosges hills in eastern France are attracting attention from farmers to financiers.
Westphal is one of a small but growing band of farmers in the European Union’s biggest agricultural producer who are taking up new incentives for solar power to supplement farm incomes as well as help France meet renewable energy targets.
“We’re trying to go a bit beyond agriculture to earn our living in a different way,” said Jean-Luc Leonhart, an old classmate of Westphal’s visiting his friend’s project with a view to installing solar panels on his own farm.
In a mountainous region famed for Munster-Gerome cheeses and good quality white wines, Westphal is working on a grand scale.
His built-in panels form one of the largest integrated installations of photovoltaic systems — which generate electricity direct from solar power — yet built.
The 20 million euro ($26 million) investment means constructing five enormous sheds covered by 36,000 square meters of solar panels with a capacity to generate 4.5 megawatts (MW) of electricity, enough to power 4,000 homes.
“It’s quite a gamble,” said Westphal, who runs the farm with his brother.
The size, combined with a government guarantee of long-term electricity contracts at an inflation-linked “feed-in” tariff, helped win the scheme bank support.
Banque Populaire jointly financed Westphal’s project with Credit Agricole, France’s leading lender to farmers.
“It was the economies of scale that convinced them,” Westphal said. The farmer expects to generate 2 million euros a year in electricity sales from his solar site.
…
For other farmers considering solar energy, a cooperative would be a good way to create economies of scale without a huge individual investment, he added.
One example is a group of 77 cattle breeders in the Aveyron region of south-west France, who formed a company, SAS Adder, to manage the 17 million euro construction of 33,0000 square meters of integrated roof panels on their farms.
“It’s about minimizing the costs, spreading the risk and sharing the profits,” said Pierre Bastide, Adder’s president.
Adder’s project is one of 30 in the area of sustainable development that will receive a ministry award at the Paris Farm Show running to March 1.
Good article, I put together a securitization model for renewable energy and the market would requires either a strong prediliction for the private sector to offer PPAs at smaller scales, or a blanked feed-in tariff. Inflation indexed is probably a requisite as well, considering, but the flipside to that is further squeez on urbanites as the clean green fascism ramps up.
“The return on investment is decent enough but not extraordinary,”
I´m assuming they´re using materials priced at over $5/Watt installed, which would still offer a better return than t-bills at this point. Next-gen stuff and scaled wind and geo all offer really good ROIs considering the safety of the asset, better than municipal backed bonds.
“Farmers remain characteristically cautious, however.”
Gotta love the MSM.
I just read some stuff by Joel Salatin, if you haven´t read “Everything I Want To Do Is Illegal” you should because it feeds into your core themes strongly with first-hand experience.
I´m now convinced that value-added food products produced by local, sustainable agriculture will be one of the fastest growing sectors of the economy in the future.
Jim Rodgers has the same opinion.
http://news.kontentkonsult.com/2009/03/interview-with-jim-rogers-dateline-sbs.html
“JIM ROGERS: Listen, we have to face reality, George. I have. If you don’t face reality and you sit there and twiddle along and believe Mr Bernanke that everything is OK, you are going to get hit by a two-by-four and it’s going to hurt very, very, very badly, so I would urge you to be prepared. But some parts of the world’s economy are going to boom. George, you should become a farmer. Agriculture is about to become one of the most exciting industries in the world for the next 20 or 30 years. There are plenty of people in the world who are going to do extremely well in the times that are coming up, but it’s not Wall Street, it’s not the City of London – the people who have been driving Lamborghinis for the past 10 years are suddenly going to have to drive taxis. Maybe they will learn to drive tractors so they can work for the farmers who will now have the Lamborghinis.”
thanks for the excellent link, Patrick.