Setting up an Energy
Supply Company (ESCo)


         Douglas Jackson
            Consultant
  Laurence Gould Partnership ...
Introduction

1.   Background
2.   What is an ESCo;
3.   How does an ESCo work?
4.   Key points for setting up an ESCo;
5....
Background
 LGP is involved with a range of
 renewable energy projects – biodiesel,
 bioethanol, AD, wind, CHP and hydro;
...
Drivers for Interest…
1.   Need to secure renewable fuels for the future;
2.   Governmental support (grants and subsidies)...
What is an ESCo?
Energy Supply Company (ESCo);
Typically company to supply, operate or maintain energy
systems;
Model for ...
How does an ESCo Work?
 Business sells energy or expertise;
 Typically company generates energy and
 sells to an end user;...
Key Points - Setting up ESCo
1. Identify the opportunity and market;
2. Identify partners/investors;
3. Establish the busi...
Case Study: Cantium Energy
  SEEDA funded research project
  investigated renewable energy (biodiesel
  for road transport...
Case Study: Cantium Energy
  Discovered that biodiesel for road use very
  difficult with OSR – meeting EN14214;
  Energy ...
Case Study: Cantium Energy
  Further research indicated that:
   •   Businesses and organisations interested in CHP;
   • ...
Case Study: Cantium Energy
  Cantium installs 25-250kW CHP engines at
  the point of use;
  Cantium maintains the engines ...
Case Study: Cantium Energy
  Electricity and heat is sold to the end-user;
  Energy price is related to fuel prices;
  Fee...
Case Study: Cantium Energy
  Company is Ltd.;
  All partners are shareholders (directors hold
  additional shares) – 40% s...
Case Study:
Cornwall Wind Project
 Group of Cornish farmers establishing
 a wind farm;
 Electricity to be sold to the grid...
Case Study:
Cornwall Wind Project
 Set up as a cooperative;
 Each provided capital for investment;
 Receive ‘rent’ for lan...
Grants & Support
Capital
   RDPE – SEEDA (www.seeda.co.uk);
   Bio-energy Grant Schemes (www.defra.gov.uk);
   Carbon Trus...
Grants & Support

Advice
• Good Energy (www.good-energy.co.uk)
• Green Energy UK (www.greenenergy.uk.com)

• Ecotricity (w...
For more information or to
discuss….
   Douglas Jackson
   Laurence Gould Partnership Ltd.
   T: 01444 232 822
   M: 07500...
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Setting up an Energy Supply Company - Douglas Jackson (Laurence Gould Partnership)

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This presentation formed part of the Farming Futures workshop 'Focus on: Renewables in the South East'.

11th February 2009

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Setting up an Energy Supply Company - Douglas Jackson (Laurence Gould Partnership)

  1. 1. Setting up an Energy Supply Company (ESCo) Douglas Jackson Consultant Laurence Gould Partnership Ltd.
  2. 2. Introduction 1. Background 2. What is an ESCo; 3. How does an ESCo work? 4. Key points for setting up an ESCo; 5. Case Study 1: Cantium Energy; 6. Case Study 2: Cornwall Wind Project; 7. Grants & Support;
  3. 3. Background LGP is involved with a range of renewable energy projects – biodiesel, bioethanol, AD, wind, CHP and hydro; Advice to County Council in South East on the establishment of a renewable fuel supply company; Advice to farms and farmer co-ops on the establishment and management of ESCo and renewable energy projects;
  4. 4. Drivers for Interest… 1. Need to secure renewable fuels for the future; 2. Governmental support (grants and subsidies); 3. Farmers have the resources available; 4. Opportunity for farming to access new markets – another form of diversification;
  5. 5. What is an ESCo? Energy Supply Company (ESCo); Typically company to supply, operate or maintain energy systems; Model for delivery of: • Renewable energy generation and sale; • Energy savings/efficiency improvements; • Energy marketing; Legal status of ESCo – decided by management; Can be individual projects or wider objectives;
  6. 6. How does an ESCo Work? Business sells energy or expertise; Typically company generates energy and sells to an end user; Energy is generated on site i.e. wind farm exporting energy to national grid; or Off site i.e. CHP engines at point of end use;
  7. 7. Key Points - Setting up ESCo 1. Identify the opportunity and market; 2. Identify partners/investors; 3. Establish the business structure and model; 4. Identify business objectives and develop the business plan; 5. Detailed market research and identify initial customers; 6. Secure finance for the business; 7. Commence trading;
  8. 8. Case Study: Cantium Energy SEEDA funded research project investigated renewable energy (biodiesel for road transport) from the whole oilseed rape crop;
  9. 9. Case Study: Cantium Energy Discovered that biodiesel for road use very difficult with OSR – meeting EN14214; Energy generation from CHP does not require fuel to meet EN14214; Small scale CHP (25-250kW) is not catered for in current markets;
  10. 10. Case Study: Cantium Energy Further research indicated that: • Businesses and organisations interested in CHP; • Concerns over reliability and procurement; • Investment often a limiting factor; ESCo was then established to deliver small scale, reliable and environmentally friendly CHP to local businesses with engines installed at point of use;
  11. 11. Case Study: Cantium Energy Cantium installs 25-250kW CHP engines at the point of use; Cantium maintains the engines and supplies the fuel;
  12. 12. Case Study: Cantium Energy Electricity and heat is sold to the end-user; Energy price is related to fuel prices; Feedstock is procured on energy price related contracts; ROCs are sold by Cantium at auction;
  13. 13. Case Study: Cantium Energy Company is Ltd.; All partners are shareholders (directors hold additional shares) – 40% share capital reserve; Capital investment is ~£40,000 per installation; Financed by Finance South-East loan, Carbon Trust Loan Scheme and private finance;
  14. 14. Case Study: Cornwall Wind Project Group of Cornish farmers establishing a wind farm; Electricity to be sold to the grid; Minimal impact in terms of loss of land;
  15. 15. Case Study: Cornwall Wind Project Set up as a cooperative; Each provided capital for investment; Receive ‘rent’ for land and share of profits; Sales from electric & ROCs; Overheads include rent and maintenance;
  16. 16. Grants & Support Capital RDPE – SEEDA (www.seeda.co.uk); Bio-energy Grant Schemes (www.defra.gov.uk); Carbon Trust (www.carbontrust.co.uk); Low Carbon Buildings (www.lowcarbonbuildings.org.uk)
  17. 17. Grants & Support Advice • Good Energy (www.good-energy.co.uk) • Green Energy UK (www.greenenergy.uk.com) • Ecotricity (www.ecotricity.co.uk) • Tradelink (www.tradelinksolutions.com) • OFGEM (www.ofgem.gov.uk)
  18. 18. For more information or to discuss…. Douglas Jackson Laurence Gould Partnership Ltd. T: 01444 232 822 M: 07500 885 831 E: douglas@laurencegould.com W: www.laurencegould.com
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