Late last year Ecotricity launched a new initiative and, as it turns out, a new product. We dubbed it Ecobonds and it was a runaway success.
We set out to raise £10 million and we actually received some £15 million in applications with another £3 million that didn’t make it in on time. It was a huge success.
We’d been considering launching a bond issue for a year or two. We had two main purposes in mind.
The first was to fill a funding gap that we knew would arrive one day. Our model at Ecotricity is to use customer energy bills to build new sources of Green Energy – something we describe as “turning Bills into Mills” and it’s a model that works very well. When we build a new Green Energy project we use a mixture of debt and equity, typically 80% debt and 20% equity. We fund the 20% equity from our own resources, from the money we make. And we’ve always known the day would come when our project pipeline, those consented and ready to build, would outstrip our ability to self fund the equity part. Creating the Funding Gap. (more…)
I also recently wrote to all of our customers explaining that we needed to follow the recent price rises (of the Big Six) and why. In it I tried to provide a simple explanation of why green electricity prices go up when brown electricity prices do. I received a number of e-mails and letters from customers who had further questions about that and related issues.
I’ve spent the last few nights considering how best to approach this and writing what follows below – it’s a more detailed explanation of why our prices need to follow the market (for now). I hope in the process to better explain the way the electricity market works, how this affects what we do and at the same time cover the majority of questions asked.
The UK have had big plans before, though not this big – what we’ve always been missing is the guts to make them happen, to drive the change needed. That’s why we’ve missed targets before and why we’ll miss them again. Talk is one thing (and we’ve had plenty of it, low carbon economy this, climate change biggest threat that……. and so on) what we need is action. (more…)
Big news yesterday. Shell have pulled out of the London Array – the world’s largest offshore windfarm proposal. Bit of a shock to the well-spun world of offshore wind. As is the reason – that it doesn’t stack up financially. Shell, bless em, with record first quarter profits of £3.9 billion – you’d think they could afford a few windmills. Actually what they’re saying is they can’t make enough money out of it. Profit before planet of course. (more…)
This blog is about answers to the big questions - how will we keep the lights on, what kind of cars will we drive (will we drive?) and how will we feed ourselves - in a post oil world, and a world where we can't afford to keep burning things and throwing things away. Energy, Transport and Food are the three big issues.