People power: the Good Energy way to a low carbon future

Q. You have just received an honorary doctorate for your contribution to renewable energy – in light of that, what is your view on the UK’s renewable energy track record to date and what more do you think should be being done to move away from our dependence on fossil fuels?

A. I’ve probably been asking myself this question for the last 15 years. If you look at the UK and compare it with the rest of Europe, we probably have the lowest percentage of renewable energy in our fuel mix and you have to ask yourself why? In the last three years, the Government has made changes to move things forward, but the biggest issue we’ve got is trying to green the whole energy market – it has been set up to be robust and change doesn’t come easy for the industry.

Finance is the easiest bit to fix, once you set out a regulatory framework. The difficulty is we don't have a planning process that is fit for purpose and we’ve got an electricity network that has not been set up to deal with decentralisation.

To get things done, my vision would be to have special task force – a hit squad – to implement Government policies, because at the moment policies are dealt by different departments and the pace of change is not quick enough.

Q. Good Energy has just announced the first in series of master classes to help small scale renewable generators, including commercial ones, make a business out of their green enterprise. How important an impact do you think the feed-in tariffs are going to have on the growth of the renewable sector?

A. Every time we talk to people this is the part they are interested in. Micro-generation grasps people’s imagination – they are growing their own vegetables, recycling their own water and they feel disabled by energy.

The key impact for me is we will now see finance step into this end of the market. Up until now, smaller sites haven’t been able to get finance, but with feed-in tariffs – guaranteed by Government – we'll begin to see financial products coming onto the market.

I think we’re going to see some interesting things happening at community and local level.

Q. What are the main barriers as you see it to business, and SMEs in particular, investing in renewable energy generation?

A. Number one, if you are a business and energy isn’t your main focus, you need a champion and some resource. At times like this, companies are focusing on having a business, so resource is an issue. The Carbon Trust is good for certain-sized businesses, but even we can’t ask for Carbon Trust investment because we are too small. Lots of people are waiting on the feed-in tariffs and what comes out of that.

Q. Are you concerned that the Carbon Reduction Commitment is discouraging big business from investing in on-site renewables because the rules as they stand mean these types of investments won’t count towards their carbon reduction?

A. Unfortunately, we’ve got very hung up on auditing carbon and forgotten that we are trying to encourage everyone to reduce their carbon emissions. It is a nonsense to say you can’t use onsite renewables. It is something held over from Defra, where ROCs (Renewable Obligation Certificates) and carbon have got muddled up.

Q. Good Energy is unique in the market for sourcing 100 per cent of its energy from renewable sources, but this has not made you immune from the price hikes in the energy market – since your customers are already paying a premium for renewable energy, what is Good Energy doing about protecting them from these price hikes?

A. We contract with our generators for a period of time – say three-years and these contracts are subject to the market price. We operate in an imperfect market, so it is something we do have to explain very well to our customers. So we try and help our customers save energy, which is why we brought in the Good Energy Shop.

Q. Why have you not invested more in your own renewable energy generation?

A. We have a wind farm and we’ve spent half a million pounds to prepare it to be re-powered from 10 turbines to four big ones that will hopefully be ready by 2010. The output will be two and half times more than at present. We are also looking at other sites, but there is no good reason to own everything. The key thing is to make sure that new generators are coming on all the time.

Q. Do you think the big six energy companies are investing enough in renewables, and if not, what measures do you think should be being taken to get them to do so?

A. I think we’ve always relied on them too much and this has stymied the market. They’ve done an awful lot, but in a highly regulated market and as public companies with shareholders they will be looking to do things in the cheapest way possible, which stops innovation. On energy efficiency we could have seen more innovation if other companies had been able to deliver the various precursors to that.

Q. Good Energy has won many plaudits for its green energy offering, but it has been caught up in controversy too. In May, rival Ecotricity reported you to Ofgem, claiming you were misleading customers over your green tariff policy. Can you comment on that?

A. This was about how we were communicating our policy on retiring ROCs to our customers. We took legal advice and as a result we’ve been clearer. We've now spoken to the regulators and got a clean bill of health.

Q. Good Energy recently entered the dual fuel market – how do you explain that strategy as renewable energy supplier and how well is it working for you? Are you extending it to commercial customers?

A. Our customers were telling us they wanted to buy gas from us. We can’t sell green gas at the moment, although it is possible we will be able to in the future – maybe by 2010.

We went out on consultation on this and spoke to Greenpeace and Friends of the Earth and, at first we looked at offsetting, but then we decided to try and do something different. We put a small premium on the gas and that pays income to those generating solar thermal. We wanted to test the premise and come up with a way to measure heat (heat meters are expensive). So we are hoping to run a project to measure heat across the UK and check our methodology.

We now have 2000 customers on dual fuel and we are potentially expanding the scheme next year. We are not doing commercial, yet, but maybe by next year we will be.

Q. We keep hearing about the massive growth in green jobs a green industrial revolution will deliver – do you think it can be delivered though?

A. One of the biggest issues as an employer in this sector is people with experience in the industry are few and far between. If you were going to do a something about that you need Government-sponsored apprenticeships and keep it going for 10 years.

Q. What are you hopes for a global deal on climate change in Copenhagen?

A. My main hope is to get every country leader attending Copenhagen – it is about sending someone in to negotiate a contract that can sign it. Obama is important if he hasn’t been ‘got at’ in his own country, but it is China that is going to save the world not America – it is physically suffering more than anyone other country, as is India. Countries such as the UK and US will miss out the most if Copenhagen isn’t signed, but China will get on and do it anyway.

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