Decentralised energy will revolutionise sustainable business, claims Mongoose Energy boss
EXCLUSIVE: Businesses that invest in decentralised energy systems can enjoy the triple benefit of economic value, security of supply and "telling a good story", the new chief executive of community energy supplier Mongoose Energy has told edie.
In his previous role as head of international NGO the Climate Group, Mark Kenber led the RE100 scheme which gets firms to source 100% renewable electricity. It was revealed by edie earlier this month that the initiative was targeting 500 members by 2020 after passing the 100-member milestone.
Kenber, who took the reins at Wiltshire-based Mongoose Energy in April, welcomed the growing number of businesses recognising the financial benefits of sourcing renewable energy. He cited Power Purchase Agreements (PPAs) with local suppliers as one of the increasingly popular methods for companies to meet renewable energy targets, and also improve CSR credentials.
“Businesses sign up to RE100 for broadly financial reasons, they know the economics stack up,” Kenber said. “And if you can get a lot of CSR benefit from it, with a local store buying from the local community, it's a really good story. A lot of them are looking at that. Now you can get competitive prices which work for both partners.
“If you've got that secure offtake, then that makes it easier to refinance a project, because you can take a secure PPA to a financier and say this is guaranteed income for 10-15 years. Then there's an absolute benefit for the community from that. If you can bring your costs of capital down, then there's more money that can go to the community fund and there's greater certainty that you can give to your investors. You can possibly offer even more to them the next time around, so you then create a virtuous circle.”
'Part of the system'
Kenber joined Mongoose after spending more than 20 years playing an influential role in international climate policy. On taking his new position, Kenber spoke about the “fantastic opportunity” to fundamentally change the way energy is generated, owned and supplied across the country. The UK’s future shift towards a decentralised energy system is “tailor-made” for community energy, Kenber believes, but only if the sector demonstrates that it is more than simply “something that is nice to have".
“This is about creating a reliable, clean and affordable energy system and community energy and renewables are clearly a part of that,” he said. “The community energy sector needs to be saying 'we're not a nice to have. We are part of the system'. And as the electricity system begins to become more decentralised and more distributed, there is a huge opportunity for them to do that. Thinking about local grids and balancing, frequency response and all those things. That's tailored for them.”
As the UK’s leading community energy firm, Mongoose is well-placed to lead the UK's decentralised energy transition. The Bristol-based company works with community groups, commercial project developers and investors to identify, develop, finance, build and manage profitable community-owned renewable energy installations. Since launching in 2015, Mongoose projects have generated have 48MW of green energy across the country, enough to provide for about 18,000 homes.
Last month, the firm launched a new crowdfunding platform – Mongoose Crowd – to serve thousands of active community energy investors in the UK. The scheme aims to deliver substantial financial returns, lower environmental impacts and positive social dividends. And for the first time, UK investors are able to crowdfund community energy bonds within a tax-free Individual Savings Account (ISA) wrapper.
Feedback from the first bond sales this month show that around 90% of Mongoose Crowd investors are choosing to use the ISA wrapper, with Kenber pleased with the positive reaction from the investment community.
He said: “It's been very good, not least from the number of community groups across the country who have said 'we're really glad you're doing this, can you help us fundraise?' And the answer in the majority of these cases is yes. We've got a pretty big pipeline of projects over the next 12 months so we've got enough offers to fill the platform for 12-15 months.”
The crowdfunding platform forms part of Mongoose’s vision to place local generation at the heart of the UK’s energy mix – a move which could have significant economic benefits. It is estimated that a smarter, more flexible energy system, facilitated by emerging technologies such as demand response and energy storage, could help creates savings for the UK in the tune of £8bn by 2030.
And by giving people more power over their savings and local energy supply, Kenber insists that decentralised energy can bring about positive social and environmental change, through reduced fuel poverty and better energy efficiency.
He added: “Now you've got an ecosystem of potentially zero-carbon energy which is as cheap and will soon be cheaper than the fossil fuel alternative, in a way that is convenient and accessible to the vast majority of the public. What's not to get excited about?
“I see that provides an opportunity for this decentralised ownership and governance. People don't shop around for their energy like they do for everything else. It's because it seems so remote. Community groups are just perfect to help vulnerable members of society who can trust the people who are delivering their energy. This helps people save money, and therefore helps save lives and deliver improved livelihoods.
“So, this combination between smart technologies and a greater connection about where your energy comes from, what you use, what it costs, is going to revolutionise the way we think about energy. It will be a game-changer and it's really exciting. And that's why I'm doing this.”