From NOT A LOT OF PEOPLE KNOW THAT
SEPTEMBER 27, 2021
By Paul Homewood
h/t Lez
Beware green investments!
Holders of “mini-bonds” issued by Future Renewables Eco, a wind farm investment company, are braced to lose more than half their investments after it collapsed into administration on Sept 17.
It owned 10 wind turbines across Britain and was funded by 750 bondholders who ploughed £24m into the company between 2015 and 2017.
They were due to vote on Sept 18 on whether the company should be wound up or placed in administration, but the company’s bosses said early voting suggested an administration was inevitable. The company stopped paying interest in May of this year.
One investor invested more than £150,000 of his inheritance in the bonds, which paid up to 9.5pc per year.
He said: “I was a fool. I searched for an ethical investment. I have grandchildren and I wanted it to build up the capital and support the wind industry.”
He thinks Future Renewables was too optimistic about how much money could be made from selling the electricity to the grid, a key part of its business plan.
I really cannot understand people who invest so much money in any single company, no matter how attractive it may look. I suspect they were duped by the high rates of interest on offer, which really should have set alarm bells ringing.
But I have no sympathy whatsoever with anybody who prioritises “ethical investment” over financial commonsense.
A quick look at the Annual Accounts of this company shows its whole business model was doomed to fail. The first thing to notice is that the latest set of accounts are for June 2018, filed in February 2019. Clearly the company has been in trouble for a long time.
Those Accounts show how much they have relied on subsidies for their income:
Feed in Tariffs and ROCs account for 72% of turnover, working out at £91.60.MWh. In contrast, electricity sales only earned £35.02/MWh
As you will see, they chalked up a loss of £1986K, before revaluation gains taken on the purchase of another wind farm during the year.
A glance at the P&L shows that the company was effectively bankrupt three years ago:
With turnover of £593K and operating costs of £982K, the company clearly was not viable. And that is before interest payable to bondholders of £2457K. Bondholders, by the way, were owed £15 million at the time.
The company only managed to stay afloat in 2018 by borrowing £4 million from bondholders that year.
Unfortunately investors like this guy have been fooled by the lies put about by the wind industry and renewable lobby, who have deceived the public into thinking that wind power is cheap and efficient.
As the Future Renewables Eco’s bondholders are now finding out to their cost, it is nothing of the sort.
Same as all of these “markets”, without massive government subsidies they are uneconomic.
The exact opposite of the market.
Ah, schadenfreude. One the few pleasures left in the post COVID world.
A grandparent that inherited at least £150,000 pounds and promptly sinks it all into wind turbines?
Sounds to me that that grandparent is already well into their dotage and probably shouldn’t be making financial decisions.
Ten wind turbines, £24m ($32,486,400 dollars on /28/2021) invested at a rate of £2.4m per wind turbine? Besides proving the lie that wind and solar energy are cheap, this investment is failing.
If it wasn’t for the combined Biden lunacy and European addiction to Russian LNG, I’d say they could’ve installed LNG generating facilities for decades of cheap reliable electricity.
Maybe they should install a few coal generators?
People who invest in RE are no better than those that pay money to fraudsters to collect fake lottery wins where they never bought a ticket, or to claim fake inheritance from a person they never knew. You can’t fix stupid.
Also left unsaid is gross fiscal mismanagement at Future Renewables Eco plc.
Just look at their “Statement of Cash Flows” for 2018 versus 2017, provided at the end of the above article. In 2017 they booked negative cash flow of £351,836 on the line item “Acquisition of Subsidiaries”, despite having a whopping £2.1 million deficit in the line item “Cash generated from operations”. So what do they decide to do the following fiscal year, 2018? . . . why, increase their “Acquisition of Subsidiaries” negative cash flow to an incredible £1,090,964, a 3-fold increase to the downside!
Also, a careful potential investor might have raised an eyebrow or two over the consecutive yearly negative cash flows, each over £2 million, from “Purchase of tangible assets”.
Oh, well.
It worries me that super funds are being drawn into “ethical Investments.” Once the subsidies stop and the free energy is no longer free, are they going to get burned at some stage as well?
I suspect that their investors thought the fix was in, that is, the govt would not let wind farms go under. That would be my assumption.
Just like people investing with Bernie Madoff. Nobody could make his consistent returns legally. They all knew it was a racket. No innocents.
On the other hand, speaking of energy investments, natural gas has doubled this year in the USA, and even more in Europe. If that fellow had bought natural gas assets several years ago he would be sitting on a pile of cash right now. I plan on making real money this week selling calls on my natural gas holdings. The calls are fantastically priced I ASSUME because some people have to have natural gas this coming January, no matter what the cost!
“So, dirty fossil fuel burner, you want natural gas to make electricity for widows and orphans this January? It’s gonna cost ya!”
Good times.
“Administrative expenses” … the syphoning of investors’ funds out of the business into the pockets of the executive managers.
And this is a tiny fraction of the money the rest of us have lost due to government support of these ponzi schemes.
The big problem is when Governments get fooled like this. But then, no problem. It’s only taxpayer’s money…
greed of high returns more then ethical investing methinks
Wind is 60% infrasound, and used uphill, no longer available downhill.
The pending loss of £12–24 million by bondholders of Future Renewables Eco is equivalent to pocket change compared to the Solyndra debacle in the United States, where the Federal Government alone incurred a USD $528 million loss.
Should have bought BAT, they pay a good dividend, and so do BHP and Rio.