The UK Government is bound by an international agreement to generate 15% of its energy requirements from renewable energy sources by 2020. As part of the UK's committment to reach its renewable energy goals, Drax Power station in Selby has been converted to burn Biomass fuel instead of coal.
The six turbines at Drax power station supplies enough electricity to power 6 million homes.
In order to achieve this continued power supply through biomass Drax will require 7-8million tonnes of woodpellets per year. Canada is well positoned to meet this demand and CX Renewable energy will meet some of this demand from its plantations located in Eastern Canada.
With sustainable practices in mind, timber is a renewable and inexhaustible resource, as long
as it is managed through sustainable means. CX Renewables works with local contractors with the aim of becoming the leader in planting and managing Willow biomass plantations in Eastern Canada. We work to protect the environment and provide a renewable source of energy for the global wood pellet market.
We plant each of our sites with hybrid salix Willow.
Willow will flourish on a wide range of soil types and environmental conditions. The sites
selected for our projects are located in Eastern Canada in the Provence of New Brunswick.
The soil types are ideal and the climate is temperate due to the influence of the gulf stream
along the eastern seaboard. There is a good supply of water and light to each site. Each of our
sites are managed in a sustainable manner ensuring as little disruption to the local ecosystem, by using well established low impact forestry techniques.
What we are offering:
With a minimum investment of £15,000, we offer an income of 9% from the sale of wood pellets from your plot under management by a team of experienced foresters. You will receive full title deeds to your plot and can benefit from the rising land values of between 6-12% per annum for the next 25 years. All returns are Tax efficient.
How to Proceed
- Download our Guide to Renewable energy
- Request an Investment Calculator to suit your investment level
- Review the investment information
- Request a call back from our team of dedicated consultants who can explain the investment process and answer any of your questions
Frequently asked questions
What are your fees & charges?
CX Renewable Energy charge an upfront fee of 15% for funds invested. Thereafter CX Renewable will charge an ongoing 15% flat annual management fee which will be deduced from the annual income generated, starting from year 2. The management fee will cover the cost of harvest, transport and sale of your energy crop.
What is the project liquidity?
We offer all of our clients a Resale programme which means that after year 2 and the energy crop is fully established, this ensures that each individual plot is marketable to any outside investor keen to take advantage of the high growth rates and annual income payments.
Is it Government backed?
Each project benefits from Government funding by way of tax breaks and incentives in the UK and Europe under feed in tarriffs and incentives to encourage the move away from fossil fuel energy and to more clearner sources like solar and biomass.
What is your track record?
Take a look at what some our clients say about their experience of investing in renewable energy with us. Our clients have given us 5 stars so far, we welcome your comments about your experience. If you would like more information about our returns existing projects then please contact a member of our client services team.
What are the Tax breaks?
Under current tax legislation all income generated through the sale of wood is free from Income tax, capital gains tax and Inheritance tax. See separate Tax Report for details on the current tax legislation surrounding income from forestry and related industries. We do not advise individuals on their personal tax situations, for this you must consult a specialist in this area.
What security do I have over my capital?
The company grants first legal charge to each client. Each investor holds ownership over the land on which the energy project is located. The land is a valuable asset and over the past 10 years it has demonstrated an average annual capital growth rate of 12%.
Further land increases in the future can be expected, therefore future proofing the underlying value of the client investment.
What insurance is provided?
A fully comprehensive insurance policy is put in place for each project, to ensure that any loss of income or captial that is put at risk can be compensated for any loss due to unforseen circumstances like, fire, wind damage, disease, crop failure, theft or damage to the site and infrastructure.
Cover will include walls, gates, fences, access roads, wind turbines, solar panels for all damage, with prompt payment of any claims. Public and Employers liability included.
Who manages the projects?
The management of each project will depend on the location of the development and also whether or not a local contractor is employed. A comprehensive management contract is put in place to ensure that project milestones are achieved on time and within budget to ensure delivery of project revenue to the company and its clients. A copy of the management contract will be sent to each client in advance of signing any agreement.
How do I proceed?
Start by downloading our Guide and once you have made a decision to proceed contact a member of our reservations team who will reserve a plot in your name once they have recorded your details on the application form.
Once payment is received we will issue you with a receipt for payment and your Investor starter pack will arrive in the post within 6 working weeks.
Does the investment actually purchase the land? Is that what you mean when you say asset backed?
Yes, we give each client full ownership of the land that the Biomass crop is planted on. Our sites are located in New Brunswick and Nova Scotia in Canada. With a min. Investment of £15,000 this will include ownership of 1 hectare of farmland. This will also give the client capital growth over the investment cycle based on the increase of farmland prices in Canada. Over the past 10 years the farmland prices in Canada have risen on average by 12% per year.
Does the investment run for a specified period of time? If not, what routes are available to exiting?
The Biomass Willow crop is planted in the ground and can be coppiced each year for 25 years. There is no lock in period and if the client wishes to sell out in 5 years time or sooner they are free to do this. Just ask your dedicated Consultant for our Resale Programme which will include all the information you need to make a sale of your Biomass project. We would ask for first option on the site or we can offer it for resale among our existing clients.
Is the income guaranteed, a minimum, a maximum - can you provide details of past performances?
The sale of wood pellets is now a fully traded commodity and has been since 2011. This gives a level of stability to demand and supply. There are futures contracts in place which means that suppliers can achieve a fair market price for their product over a 10 to 20-year period and buyers like large power plants in Europe can purchase future demand with a degree of certainty and planning. Demand continues to outstrip supply and that is why during peak periods the price continues to rise.
Also take a look at our Yield Table included in our brochure, it gives a measure for our current site where we project 12 tonnes at a price of £130 per tonne. A 12 tonne projection is very much at the lower end of the scale for yield and as each of our sites are professionally managed we can expect a slightly higher yield per year over the course of the investment.
What assumptions are used to calculate the 6% capital growth?
Farmland in Canada have risen by on average 12% per year for the past 10 years. We project at least half that level of growth at 6% for the next 10 years, which would be on the conservative side if you consider past performances. Follow the link below to see the full report.
The fee structure says 15% on investment.... is this 15% of the investment amount?
Our fees are made clear and transparent from the outset. We charge 15% of the initial investment, which is included in the minimum investment of £15,000. This will cover the administration fee, and the legal fees to register the land in your name. After that we then charge an annual fee of 15% for the annual harvest, Insurance policy, organise sale of the crop and the transport of your wood pellets to market, this is deducted at source each year. There are no further fees. If for example there is damage caused to your Biomass Willow crop in any particular year, we will cover the cost of the replanting and there will be no extra fees charged to your account.
Is the land owned freehold by the investor?
The land is held freehold by the client. This gives the added benefit of capital growth through land value increases. In the past 10 years, farmland in Canada has risen on average by 12% per year. We are projecting a more conservative growth of 6% per year for the next 10 years. See farmland value report link.
What does first charge on assets mean?
- As part of our Security structure to each client, the client will have full ownership over the land. Each client will be registered on the land and will receive up to date aerial photographs of the site, land registry documents and GPS co-ordinates for their respective plot.
- The investment is further protected by the company using segregated bank accounts and your capital is returned to you upon the resale of your plot.
- We also have a comprehensive resale programme, which means that if your circumstances change and you need to sell out, then you are free to do this. We would ask for first preference on any sale and once the offer is accepted your funds will be returned within 60 days.
What will happen 25 years down the line?
Once a commercial Biomass like Willow is planted, it grows for 25 years in the ground before it needs to be removed at the stump, so that is the reason for a term that runs for 25 years. However, as mentioned you are not required to hold this investment for that length of time.
Can the management charges be changed or is it set at a flat rate for the whole investment period?
The management charges present good value for money, when you consider that the site will be maintained each year by a professional team who are incentivised to maximise your returns, making any repairs throughout the year, cover the cost of any repairs, check fencing, pay for fertiliser and herbicide. It will also cover the cost of Insurance which is essential for an Energy crop like Willow. We will also manage the transport and sale of your crop on an annual basis. In cost terms it works out at £234 per hectare per year, which represents good value for money when you consider the amount of work and organisation involved.
Need more details? Talk to us
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