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

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

11th February 2009

Published in: Technology

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  • 1. Setting up an Energy Supply Company (ESCo) Douglas Jackson Consultant Laurence Gould Partnership Ltd.
  • 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. 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. 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. 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. 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. 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. Case Study: Cantium Energy SEEDA funded research project investigated renewable energy (biodiesel for road transport) from the whole oilseed rape crop;
  • 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. 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. Case Study: Cantium Energy Cantium installs 25-250kW CHP engines at the point of use; Cantium maintains the engines and supplies the fuel;
  • 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. 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. 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. 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. 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. 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. 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