Good Energy maintains Ofgem price cap derogation
30/07/2024 07:00
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RNS Number : 2815Y Good Energy Group PLC 30 July 2024
REACH
30 July 2024
Good Energy Group PLC
("Good Energy" or the "Company")
Good Energy maintains Ofgem price cap derogation
Good Energy Group PLC (AIM: GOOD), the 100% renewable electricity supplier and
energy services provider, has confirmed that its Standard Variable Tariffs
(SVTs) maintain a derogation from the energy price cap following a compliance
assessment by energy regulator Ofgem.
The Company was first granted derogation for its SVTs in 2019, an
acknowledgment by Ofgem that they provide support to renewables to a
materially greater extent than existing subsidies and energy supplier
obligations.
Ofgem has completed an assessment for the period 1 April 2022 to 31 March 2023
with regards to whether the Company's SVTs meet the three key outcomes for
derogation from the price cap. The three key points Good Energy's response was
required to prove are:
· Customer choice - that customers have actively chosen the
tariffs.
· Additionality - that through customers choosing the tariff,
support is provided to renewables beyond existing subsidies and other schemes.
· Cost - that the costs of operating the tariff are greater than
those which are subject to the price cap and that this is attributable to the
additional support provided to renewables.
Within its RFI response, Good Energy provided extensive evidence that its
model of 100 per cent Power Purchase Agreement (PPA) backed power supplied to
customers provides a route to market for small-scale renewable generators.
Within the assessment period, 58% of the generators Good Energy contracted
with were new connections to the grid, and 45% otherwise unsubsidised to the
Company's knowledge.
In addition to the Company's electricity SVT, its gas SVT has also maintained
a derogation. Good Energy supplies 10% green gas with the remainder offset
through Gold Standard schemes which support the production of green gas
globally.
The Company also provided evidence of its hedging strategy. It showed how its
procurement approach via PPAs, which are long-term contracts with renewable
generators, can provide stability against a volatile wholesale market. But it
also incurs imbalance costs, which are greater as a direct result of operating
a fully renewable portfolio.
Derogation from the price cap affords the Company the flexibility to reflect
these costs within its tariffs. During the compliance period assessed by
Ofgem, Good Energy's SVT for a typical dual fuel customer was at times higher
and in line with the level of the price cap.
Nigel Pocklington, CEO, Good Energy Group PLC said:
"The period assessed by Ofgem was an especially tumultuous one for the wider
energy market, showing starkly how global gas prices drive volatility. At
times Good Energy's renewable trading model created benefits, which we always
seek to pass on to customers. At other times it created additional costs, both
on-going operational costs such as the consultancy we provide new and existing
renewable generators, and in risk.
"Our derogation provides us with the flexibility to manage these costs. And it
provides our customers with the reassurance that our tariffs, unlike those
which are purely certificate backed, help the growth of renewables. Which is
essential in delivering the UK's independence from volatile gas markets."
Enquiries
Good Energy Group PLC
Nigel Pocklington, Chief Executive Email: press@goodenergy.co.uk (mailto:press@goodenergy.co.uk)
Ian McKee, Head of Communications
SEC Newgate UK Email: GoodEnergy@secnewgate.co.uk (mailto:GoodEnergy@secnewgate.co.uk)
Elisabeth Cowell / Molly Gretton Tel: +44 (0)7900 248213
Investec Bank plc (Nominated Adviser and Joint Broker)
Henry Reast / James Rudd Tel: +44 (0) 20 7597 5970
Canaccord Genuity Limited (Joint Broker)
Henry Fitzgerald - O'Connor / Harry Rees Tel: +44 (0) 20 7523 4617
About Good Energy www.goodenergy.co.uk (http://www.goodenergy.co.uk/)
Good Energy is a supplier of 100% renewable power and an innovator in energy
services. It has long term power purchase agreements with a community of 2,000
independent UK generators.
Since it was founded 20 years ago, the Company has been at the forefront of
the charge towards a cleaner, distributed energy system. Its mission is to
power a cleaner, greener world and make it simple to generate, share, store,
use and travel by clean power. Its ambition is to support one million homes
and businesses to cut carbon from their energy and transport use by 2025.
Good Energy is recognised as a leader in this market, through green kite
accreditation with the London Stock Exchange, Which? Eco Provider status and
Gold Standard Uswitch Green Tariff Accreditation for all tariffs.
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