Good Energy maintains Ofgem price cap derogation

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 Ian McKee, Head of Communications	Email: [e-mail]
SEC Newgate UK	Email: [e-mail]
Elisabeth Cowell / Molly Gretton	Tel: [phone]
Investec Bank plc (Nominated Adviser and Joint Broker)
Henry Reast / James Rudd	Tel: [phone]
Canaccord Genuity Limited (Joint Broker)
Henry Fitzgerald - O'Connor / Harry Rees	Tel: [phone]

About Good Energy 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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