Many people love the idea of generating their own power in theory, but often this isn’t possible due to cost or location. With a co-operative model of ownership, you can be part of an online energy community, even if you’re nowhere near a windfarm for example.
Every day more of us are taking measures, such as reducing our energy use or switching to greener tariffs, to try to reduce the amount of carbon dioxide (CO2) we create in our homes. Some go further with measures such as installing solar panels, ground or air source heat pumps, and other domestic renewable energy generation systems.
The larger scale renewable energy projects have traditionally been reserved for developers building projects for electricity generation for the national grid, or focusing on large corporate companies with their energy costs and CO2 emissions. But this is now changing thanks to community energy initiatives, which allow individuals to make real contributions to the UK’s net zero targets.
But what does it mean to be a part of an energy owning community and is this the future for a decarbonised society?
What does it mean to have co-ownership of energy?
Community energy is a relatively new business model, which puts energy project ownership in people’s hands. It usually requires a group of people coming together to manage or generate their own renewable energy, often involving local ownership of solar panels, hydro or wind turbines. The benefits to local and community energy projects include reducing fuel poverty and carbon emissions, both of which are important to governments and local authorities looking to reach their net zero targets.
So how far can community energy go? Most co-operative schemes are localised, but one company has partnered with energy companies to offer domestic energy consumers and investors the opportunity to further its reach through shares.
Ripple Energy’s approach to subsidy free wind and co-operative energy ownership
Ripple Energy* is the latest company to develop a new model that allows UK energy consumers to own a wind turbine, in which anyone in Great Britain can own a part share. The project involves co-operative funding and part-ownership of a wind turbine with a 2.5MW capacity, which will integrate with the electricity grid when completed.
The offering to shareholders is for a new type of green tariff, where people will be increasing the mix of green electricity in the grid. Simon Peltenburg, chief projects officer at Ripple Energy, commented: “What we’re doing is clearly a gamechanger in terms of a green tariff. You’re generating your own power to put into the network.”
The costs involved
The income generated from shareholders and investors will help fund the construction of Ripple’s wind turbine. In return, they receive a discount on their electricity bill through a special tariff arrangement with Co-op Energy, run by Octopus Energy, which you will have to be connected to for the lifetime of the project to make use of the benefits. Peltenburg explained the benefit as “an investment against future electricity price volatility.”
The price of electricity for consumers is linked to the operating cost of the wind turbine, and their savings are linked to the market electricity price. If the market price increases, so do customers’ savings. If the market price decreases, the savings also decrease.
Ripple Energy is trying to encourage around 2,000 households across Great Britain to fund the £4.3 million construction of this co-operative wind turbine at Graid Fatha Farm, north of Cardiff in Wales.
The potential of the Ripple Energy model
Ripple Energy claims that one of the biggest benefits to investing in its project is transparency. You know exactly where the energy is coming from and therefore have assurance that it’s 100% renewable.
We live in a digital age where information is aplenty and switching suppliers to find the best value has never been easier, so this business model might not necessarily suit everyone. Being locked into one supplier for a long period of time should be considered carefully, as it might not provide the best value over the long term. Other innovative energy business models might come to the market or alternative suppliers could lower their prices over time. However, committing to the Ripple Energy model does provide the benefit of knowing your money has been invested into renewable energy to help lower carbon emissions for the UK.
*Energy Saving Trust does not endorse Ripple Energy, nor have we validated any of their figures.