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The visa deal helping to power green investment

12th Feb '16

Orenda is making a new wind turbine that is both investor friendly and environmentally sound, says Hugh Wilson

Company: Orenda Energy Solutions Trading in: China Sector: Energy

“We continuously shop for parts in other countries and China continues to provide the best value”

If anybody thought that renewable energy would be a short-lived fad then the 2015 UN Climate Change Conference will have set them straight.

The transition from fossil fuels offers huge opportunities for businesses who can harness wind, wave and solar energy cost-effectively.

Orenda Energy Solutions is a start-up that brought its innovative wind turbine to market in 2015. The company’s 49kW Skye model is aimed at small and mid-market buyers such as landowners and farmers, and also at investors keen to park funds in efficient small-scale wind turbine developments. This dual customer base means the company is likely to install around 100 turbines in the next 18 months.

The Skye turbine has an oversized rotor – which means it captures more energy from wind. It also has a patent-pending speed-control system that allows it to operate safely and efficiently in all conditions, and a unique tilting tower which makes maintenance easier.

Orenda chief executive Gerry Lalonde says: “It was designed with the view of reducing as much as possible the risk to investors and this has been our mantra as a company.”

Creating the turbine has been an international operation. The Skye was designed in Canada where it is assembled from parts sourced in China. Completed turbines are shipped to installations in Britain – where the company has a headquarters – and Italy. The Chinese operation is a key element of the business.

“We manage an extensive supply chain there,” says Mr Lalonde. “About 80 per cent of the parts are sourced out of China. We believe that we can get the best pricing with good quality out of China, particularly with regards to heavy manufacturing. We continuously shop for parts in other countries and China continues to provide the best value.”

Orenda Skye

Power house: Orenda wind turbines are assembled in Canada – from parts made in China

China offers considerable benefits for Orenda, but Mr Lalonde says the supply chain has to be carefully managed. “You need to have very detailed specifications for your suppliers to meet,” he explains. As with any supply chain, it’s important to keep on top of quality control.

Personal relationships with Chinese suppliers are essential and Orenda executives make regular trips to Asia. The company has set up a Hong Kong subsidiary, which in turn owns a Wholly Foreign-Owned Enterprise (WFOE) [1] that manages the supply chain day-to-day.

WFOEs, initially established in 1986, are common investment vehicles used to trade in China without the need for the involvement of a mainland Chinese investor.

They are entirely owned by foreign nationals and are thought to offer more protection for a company’s intellectual property while maximising profit. On the flipside, WFOEs often have to work harder establishing the personal relationships on which so much business in China is based.

“The WFOE allows us to have full control of our operation in China, which gives us more flexibility,” says Mr Lalonde. “We have our own staff in China who are Chinese nationals. They are the ones who build the day-to-day relationships.”

Spending time building those relationships has allowed Orenda to create a smooth Chinese supply chain, but it has had another benefit. Its presence in China has allowed Orenda to offer British wind turbine installations as an opportunity for Chinese investors, working in conjunction with the China-Britain Business Council.

“During this work it was also brought to our attention that the UK offered an investor visa programme,” says Mr Lalonde. “So now we combine the investment in wind turbines with a UK visa. That could be very attractive to Chinese investors.”

People from outside the European Economic Area (EEA) and Switzerland can apply for an investor visa lasting just over three years if they have £2m or more to invest in UK registered companies[2].

Over the next couple of years, Orenda intends to expand into the Americas, taking advantage of opportunities to provide solutions that integrate their wind-turbine technology with solar and energy storage systems.

If the future is green, Orenda is raring to go.


[1] en.wikipedia.org/wiki/Wholly_Foreign-Owned_Enterprise
[2] www.gov.uk/tier-1-investor/overview

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