Renewable energy utility Good Energy has warned that it will miss its 2015 expectations as it looks to invest in the business’ future strategy, which it provided more detail on today.
The company issued its interim results this morning and while H1 EBITDA more than doubled year-on-year to £3.6 million, it confirmed that costs associated with its development business are now unlikely to be covered by site sales, resulting in a £1.5 million hit to its full year bottom line.
Four additional solar farms were added to its portfolio in H1, and its total solar capacity is forecast to reach 40MW by the end of the year with two additional 5MW solar farms expected to be completed before then.
Good Energy also expects to incur additional costs of £600,000 as it pursues a new growth strategy, aiming to increase its customer base fivefold to 900,000 by the end of 2020. The company first teased its new strategy earlier this year and has provided more details in its results.
“The political and regulatory environment has continued to be challenging, with changes to both onshore wind and solar subsidy regimes and an overall lack of clarity on energy policy.
“This has necessitated a constant review of the Company’s longer-term plans, particularly in relation to the timing of its wind and solar asset development pipeline and its appetite for selling sites.
“There has been considerable change in the market that is driving Good Energy’s new strategy. The focus is now on building upon the Company’s established, successful business proposition and expanding its sales expertise to deepen its market penetration,” the company said.
Central to this strategy will be renewed investment in its research and development activities with a particular emphasis on more localised energy distribution. The group said that its supply and generation business model allowed it to “take advantage of other opportunities within the energy sector”.
Good has stated it is currently working with unnamed partners to investigate battery storage potential, as well as other “peer-to-peer energy generation” technologies. One such product is a service Good has called Piclo, described as an “online marketplace for buying and selling renewable electricity”. Good has collaborated with Open Utility on the product, which is expected to launch this autumn.
While Good does not expect its feed-in tariff-related business to slow over the rest of the year, it warns of a potential impact due to proposed cuts to the support programme. It will now pursue “other efficiencies” within the company’s FiT business and seek “innovative propositions that link solar with other technologies”, seemingly another nod towards domestic storage solutions.
The new strategy is to focus on planned additional solar capacity which is unaffected by proposed subsidy changes, and then expand into onshore wind and hydro/tidal sectors in the medium term.
Good expects to deliver cost reductions in its domestic supply business through increased use of digital technology and the utility is to test additional customer acquisition channels, such as regional radio, in the short-term with a view to wider implementation in 2017.
Juliet Davenport, chief executive at Good Energy, said that the company’s new strategy gave it “every confidence” that the company can “successfully help tackle climate change and make the UK more energy self-sufficient.”