A factory in South Wales will be producing thousands of urban windmills within a few years after an investment by RWE, the German utility, in a British venture.

RWE Innogy, the renewable energy unit of the German company, is taking a £6 million stake in Quiet Revolution, a two-year-old enterprise that has developed a novel wind turbine design capable of generating power in turbulent urban landscapes.

Quiet Revolution's flagship product is a 6,000 kilowatt hour turbine, designed for small businesses, apartment buildings and housing developments. The company has already installed 30 turbines for clients including Sainsbury's, Marks & Spencer, Mercedes-Benz and Bovis, the builder, and it wants to increase production at its factory in Pembroke Dock.

Robert Webb, its chief executive, is hiring production engineers to transform the venture into a manufacturing company capable of delivering large volumes of QR5 turbines. The QR5's output is sufficient to supply three or four homes, depending on wind speed. The company plans to develop another two products - the QR12, capable of delivering 45,000 to 55,000 kwh and the QR2.5, a mini-turbine that might power a single home.

“Demand is very, very strong,” Mr Webb said. “We plan to make a few hundred next year and then grow to a few thousand.” The cash injection from RWE is about getting the right rate of investment to put a successful design into large-scale production, he added.

Quiet Revolution's order book is full until January, with a further 45 units sold and in the manufacturing stage. Mr Webb is in discussions with builders and property developers keen to develop “green” housing with independent energy supplies.

Fritz Vahrenholt, chief executive of RWE Innogy, said that local power supply to buildings would become more important. “Small wind power units on roofs can make a major contribution to this goal, especially in places with insufficient sunshine [where] photovoltaics would not be efficient enough.”

Unlike conventional propellor-shaped turbines, the QR5 is a vertical mill in the shape of a triple helix. Its design means that it can catch wind from any point without the need to direct the turbine and the design is popular among planning authorities for aesthetic reasons, according to the company.

Mr Webb and Richard Cochrane set up Quiet Revolution in 2006 after running a wind energy consultancy advising businesses on the best renewable energy technology. However, large-scale conventional turbines were inappropriate for urban areas with turbulent wind, while rural and offshore turbines required costly connections to the national grid.

“We realised there was no appropriate product for local energy. You get higher value from locally produced energy because there are no distribution losses,” Mr Webb said.

Quiet Revolution has a sales pipeline of £40 million, with most of the existing client base in property and retailing, but the company sees other infrastructure applications, such as turbines mounted on street lighting.

A QR5 costs £40,000 including installation, which Mr Webb admits is not likely to attract single home owners, but he expects to halve the current payback period of 20 years.

Key to a change in the economics of local wind power will be an improvement in the tariff at which local wind generators can sell power into the grid. The existing rates do not justify the cost of installing feed-in meters and Quiet Revolution's commercial customers do not sell their power. However, if Britain adopts regulated tariffs, such as those in force in Germany, the economics of selling local wind generation will be worthwhile.

RWE's investment also brings the prospect of wider markets, using the utility's financial power. Mr Webb said that in future businesses and home-owners could purchase wind energy on a finance-lease basis, with power companies offering an agreement to purchase energy at a fixed price in return for financing the cost of erecting turbines. “It becomes a hedge against fossil fuel price increases,” he said.

Power to the people

— Small wind turbines can be standalone or be connected to the grid. They range in size from 100 watt generators to power batteries to 50 kilowatt systems that can sell power into the grid

— Small standalone systems are typically found on farms, in remote areas and on boats and caravans. They can be used to power livestock fencing, to power pumps and lighting or security systems

— Grid-connected systems can defray the cost of energy taken from the grid and, if the volumes are high, power can be sold back to a utility. Grid-connected systems can also be eligible for Renewable Obligation Certificates (ROCs)

— Power generators have been obliged since 2002 to derive a certain proportion of the electricity they supply from renewable sources, a percentage that rises from 3 per cent to 15 per cent by 2015. Because ROCs can be traded, they have a monetary value, which is expected to rise over time

— Britain has 176 operational wind farms generating 2,547 megawatts of power, of which 404MW is offshore. A further 40 windfarms capable of generating a further 1,673MW are under construction and an additional 6,350MW has received planning consent

— Demand for power in the UK at peak consumption is about 60,000MW

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