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18
Feb 2023
Hot Seat: leading a £274m Knaresborough green energy firm
When Peter Kavanagh gave up a career in finance to set up a wind energy company 13 years ago, some thought he had lost his marbles. He says:
Mr Kavanagh, 44, now runs Knaresborough firm Harmony Energy, which employs 33 staff and acts as the ultimate advisor to London-listed Harmony Energy Income Trust PLC, which is valued at £274 million.
The company operates wind, solar and battery energy storage systems and has relationships with companies like Tesla.
It has schemes in New Zealand and France as well as the UK, where one of its projects involves developing a battery storage facility at Wormald Green, between Ripon and Harrogate, which will have the capacity to power 9,000 homes. Work on the site is due to start this year and the firm would like to also build a solar farm there.
Not only has Mr Kavanagh proved the doubters wrong, he has also given investors the chance to behave ethically while generating a return on their money.
But for all the talk of the climate crisis and soaring energy bills, the battle to establish renewable energy has been far from straightforward.
Mr Kavanagh cites connectivity to the grid as the main ‘blocker’. He says a lot of development projects fail simply because the grid is full and they can’t connect.
Grid connection, planning issues and land agreements are the three essential issues when choosing sites, he says. Harmony negotiates sites and employs four project managers plus experts in fields such as law, finance and asset management to oversee progress.
Harmony Energy’s battery energy storage system at Pillswood, near Hull.
There's also the slight matter of trying to wean the nation off fossil fuel companies, which continue to generate billions of pounds of profit and benefit from relationships built up with government over years.
Harmony has shifted its focus from wind to battery energy storage systems because of a change in the political climate since it was founded. Mr Kavanagh explains:
He admits wind is "contentious" but says recent survey since the war in Ukraine started suggests more people support it, adding:
Battery energy
Battery energy is the main focus now. So far, Mr Kavanagh has overseen the development of 500 megawatts of battery energy storage systems in the UK with the Harmony group. Harmony is Tesla's biggest customer in Europe, having been ordering its batteries since 2016.
Harmony's largest scheme is at Pillswood, which employs a Tesla two-hour megapack system that has the capacity to store up to 196 megawatt hours of electricity in a single cycle. This is enough electricity to power about 300,000 UK homes for two hours.
He says batteries are "the key to unlocking the potential of other renewable technologies, including solar" because they enable electricity to be stored until it is needed by the grid.
Because wind and sunshine aren't predictable, they produce intermittent energy. Batteries can stabilise and balance this outflow of electricity and ensure it is used more effectively.
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Harmony uses lithium batteries, made of 93% recycled content, says Mr Kavanagh.
The company was floated on the London stock exchange in November 2021 with a market capitalisation of £210 million. Its value has since soared to £274 million.
Its latest set of accounts, for the year ending December 31, 2021 showed a £33m profit compared to a £1m loss in the previous year.
Mr Kavanagh acknowledges this financial transformation was largely due to the stock market listing but adds 2022 was "another good year for us" and talks about hiring more staff and exploring new markets in Germany, Italy and Poland.
'Not all about the money'
It is easy to be cynical about combining ethics and profit but Mr Kavanagh insists he is "100% not all about money". He says investors appreciate the chance to support renewables and it's hard to dispute the fact the planet needs change to survive.
He says the company tries to behave ethically in other ways, for instance it did not furlough any staff during covid and refused business rate relief from Harrogate Borough Council during the pandemic.
Harmony, which is based at Conyngham Hall and also had an office in London's Bond Street, supports various local good causes, including Henshaws, Candlelighters and Yorkshire Wildlife Trust. It sponsors the Harrogate 10k race — an event keen runner Mr Kavanagh took part in last year. The firm also has a community fund supporting green schemes in areas where it operates.
Harmony is based at Conyngham Hall in Knaresborough.
Mr Kavanagh, a father-of-two, also tries to live ethically. His home in Birstwith is "predominantly powered by solar", he owns an electric vehicle and travels by train when possible.
He also follows a plant-based diet, although this is partly a legacy of being diagnosed with bowel cancer when he was 29.
That experience played a major role in his change of career direction after a decade in finance. He says:
Mr Kavanagh is also a director of Jones Food Company, Europe’s largest high care hydroponics facility now majority owned by the Ocado Group, and is an early-stage investor in several green tech companies outside of Harmony.
Despite the challenges. he says the tide is turning and he is optimistic about the future of renewable energy.
He says if you can build a solar farm in North Yorkshire without any taxpayers' support you can build one anywhere in Europe and it was looking to work with "trusted partners" in new areas on the continent. He says:
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