Good Energy to sell entire generation portfolio

Good Energy has announced it will sell its entire 47.5MW portfolio of renewable generation assets as part of a strategic shift towards becoming an energy services provider.

The supplier has also issued a trading outlook in which it warned that continued volatility in the energy industry will put “short term financial pressure” on the business.

Announcing the move, chief executive Nigel Pocklington said the company’s job was “done” as a developer and asset owner, adding that its focus is now on the “new frontiers” such as the electrification of transport and decentralised energy generation.

The company outlined three steps towards achieving its goal, including selling its entire generation portfolio, which was given a net value earlier this year of £56.8 million. The portfolio consists of two wind farms and six solar farms.

These sites only contribute to a relatively small proportion of the renewable power Good Energy provides, with the vast majority being sourced via power purchase agreements with more than 1900 renewable generators across the UK.

KPMG has been appointed as financial advisor regarding the sale, which is expected to be completed during the first quarter of next year.

Additionally, the company has revealed it is investing £1 million in a new platform for its decentralised energy service business, which currently serves more than 175,000 small-scale Feed-in Tariff (FIT) generation customers.

The new platform will enable smart export for solar customers and the ability to pay actual, as opposed to deemed, rates.

The company said it intends to invest further in electric vehicle (EV) mapping platform Zap-Map, of which it is a majority shareholder, during the current funding round, the size of which is anticipated to be £7 million.

This, it said, will allow Zap-Map to “crystallise” its position in the UK and make steps towards international expansion.

Trading outlook

In the trading outlook published alongside the strategic update, Good Energy said by next spring it expects significantly fewer market participants competing in a more balanced manner on product attributes, differentiated service and price.

However, it warned that it expects to incur unforecasted Renewables Obligation (RO) and FIT mutualisation costs of up to £1 million, as well as £1.5 million of additional commodity costs from a higher number of business and domestic customers than expected.

“However, given our exemption from the price cap, we have flexibility to change tariff pricing further where necessary and we will continue to monitor this closely as the winter continues,” it added.

“Continued volatility in the energy industry will put short term financial pressure on the business, however, there remains a route to achieve Good Energy’s full year expectations.”

Pocklington said: “Good Energy has been at the forefront of the UK’s energy transition for over 20 years, stimulating the growth of renewable power generation. Our job is done as a developer and asset owner as we focus on the new frontiers – the electrification of transport and decentralised energy generation.”

He said: “Whilst the retail energy market continues to experience some short-term challenges, we remain positive about the future. We will largely be a debt free company, with a strong balance sheet for growth.”