The Blog - Wind energy market analysis

Posted 26/03/2015



Price Must Be Right For Local Energy

We blame TV chefs. It seems like we cant go anywhere without seeing someone talking about how their ingredients are good, honest and locally-sourced. Its become a huge cliche.

But there’s a good reason we’re seeing it. Large numbers of people want to know where their food has come from, so they know it has been ethically-sourced and not come from the other side of the world. This helps people to make more informed choices.

But would it work with energy?

Renewables-only utility Good Energy and energy startup Open Utility think so.

They have announced plans to trial for six months a service that is set to enable businesses and renewable energy generators to trade electricity. The idea is that this online marketplace, Piclo, would become an ‘eBay for energy’and give people more transparency over which renewable energy projects they buy power from.

The aim is to enable renewable energy firms, including wind farm operators, to sell energy directly to their neighbours; and enables those neighbours, including local firms and public sector bodies, to get the best price for the energy they buy. Juliet Davenport, founder and chief executive at Good Energy, said the service could help to unlock the potential of renewables in the UK.

Effectively, it means customers can buy ‘good, honest and locally-sourced’energy.

It sounds an interesting idea, but we’ll have to see the detail before we know exactly what are the potential benefits for investors in wind farms. The main benefit appears to be getting support from local people for a potential wind project. If local people are in favour of a scheme, because of the promise of competitively-priced energy, then that should help some projects gain planning consent.

However, it doesnt address threats to the UK wind sector after the upcoming election in May, if the Conservatives retain power and carry out their plans to axe subsidies for new onshore wind farms. We dont see how Piclo will help much in if such negative policies are implemented.

We also wonder if such a service would really be of much interest to businesses —or, eventually, to individuals. If people want to power their activities with renewable energy then that is good for the industry, but we’re not convinced they want to know exactly which project they are buying from. As long as it is at a competitive price and renewable then, for most, that would be enough.

It looks like an interesting idea and we’d like to see it in action. For now, ‘good, honest and locally sourced’energy looks fine —but only if the price is right.

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