Good Energy boss warns renewable ramp up will not ease this year’s cost of living crisis
The government’s plans to ramp up renewable projects and reduce the country’s dependence on natural gas are “medium term remedies” that won’t protect households this winter, argues Good Energy chief executive Nigel Pocklington.
He urged the Chancellor Rishi Sunak to provide more support for households and businesses as the cost of living crisis escalates.
The energy boss told City A.M.: “There are a lot of households and businesses in this country who need more help right now, with a very high cost of energy. So far, I think the response is inadequate.”
Pocklington also suggested there has to be more of a focus on practical solutions to cut down costs – with high prices baked into the market amid growing expectations of a further hike to the consumer price cap this October.
He argued the most valuable role the energy industry could play in the short-term was to help people use less power and gas – chiefly through boosting energy efficiency across UK households.
The chief executive suggested consumers could cut their bills by £300-400 per year simply by leaking less heat from their homes.
He said: “We know that we’ve got the worst insulated housing stock in Europe. The best thing the government could do is get everybody insulating over the summer, so that by the time next winter comes around, it has been built up.”
Pocklington also believed smart metres could play a role, alongside mobile phones which can also provide energy users with billing information they can track regularly to keep a handle on prices.
Portfolio sale minimises crisis-driven losses
Pocklington outlined his views on the energy crisis following the publication of Good Energy’s full year results earlier today.
The sale of Good Energy’s 47.5 MGW generation assets portfolio to the Bluefield Solar Income Fund for £21.2m has helped contain its losses to around £3m, while soaring wholesale prices has powered an 11.8 per cent growth in revenues – rising to £146m.
However, cash generated from operations declined 66 per cent to £3.9m, with suppliers feeling the heat from market volatility.
In the past six months, dozens of firms have collapsed due to insufficient hedging, soaring wholesale costs and the constraints of the consumer price cap.
Good Energy is home to around 250,000 customers, which is split between supply consumers and people on feed-in-tariffs, who then administer their supply of electricity back into the grid.
It operates through a network of around 2,000 independent generators across the country.
Looking ahead, the company has suggested it will shift its capital allocation towards growth and investment, while hoping to maintain a strong balance sheet as a buffer to volatile wholesale energy markets.
The firm has announced it is well hedged for the summer, and plans to incrementally increase its hedging for winter 2022.