Wednesday, 1 May 2019

Psst!...Wanna Buy a Wind Farm?

As reader know, I have become interested in renewable energy investments in recent months spurred on by a concern for climate change. I have acquired holdings in a number of renewable infrastructure investment trusts such as Bluefield Solar and TRIG and feel much better for this as it feels like I am bringing my investments more into line with my values.

Of course this is true to an extent, but there's the nagging voice on one shoulder saying this isn't really doing much for the environment as all you are doing is buying the shares someone else is selling - which is true.

So, what about the proposition from a new start-up which seeks new money from crowdfunding to launch a renewable energy company which combines wind farm ownership with clean energy supply?

Ripple Energy (not to be confused with the crypto currency!)

This start-up aims to raise an initial £750,000 via Seedrs in exchange for a 23.2% stake in the business. Investors can invest any amount, but I guess typically between £500 and £2,000 and the proceeds will be used to launch a series of onshore wind farms in the UK. At the time of posting, they have so far raised £500,000 (67%) in the past 3 weeks from 230 investors and still with 6 weeks to go. Here's a link to their's a bit like sitting in the chairs of Dragons Den like Peter Jones and Deborah Meaden weighing up the proposition and deciding whether to invest!

They plan an initial pilot, single wind turbine later this year with a capacity to supply around 800 homes followed by a more ambitious 20 megawatt onshore wind farm a few months later with a capacity to power 18,000 homes.

The venture is headed by Sarah Merrick who's vision is of a clean energy future which is owned by the customers rather than large utility companies. She has much experience of this sector from her work with Vestas Wind, RenewableUK and Renewably Energy Systems and heads a small team with considerable technical expertise in both the renewable sector and tech start-ups.

N.B. Here's the risk warning to all potential start-up investors.

The Offer to Energy Customers

At my stage, I'm probably a little too risk-averse for an equity investment. The other proposition from Ripple when up and running is to buy into their community co-ownership offering.

Basically, instead of signing up with one of the big six energy suppliers such as British Gas or SSE, you buy a one-off stake in the Ripple wind farm. The cost of joining would depend on your likely electricity consumption, but typically £1,300 for the average household. For that, you become a member of a co-operative called a Community Benefit Society which entitles you to cheaper electricity from Ripple's associated energy suppliers. The membership will continue for the duration of the windfarm - 25 years.

It is expected that the electricity savings will be in the region of £85 to £175 each year. I calculate that the expected payback period on the initial membership fee is around 10 years on average.

This is basically a cheaper way for individuals to generate their own clean electricity. Typical saving is around 75% compared to the cost of solar panels on the roof.

Large companies like Apple, Google and Amazon already operate their own renewable energy wind and solar farms to power their operations around the world. This is a way for ordinary people to take control of their own clean energy supply.
Operating 100% Renewable Energy since 2017

So, for the green-minded investors like me, you can invest some money in a new clean energy venture. However, for equity investors, this is a risky venture and there is no guarantee it will succeed so the usual caveats apply.

Alternatively, you can choose to become a member of the community scheme when the venture is launched later this year. Pay your £1,300 membership and receive a discount on the cost of renewable electricity for the coming 25 years. Ripple will manage the acquisition and construction/maintenance of the wind farm and negotiate the discount rates with suppliers for its co-operative community members.

Reduce your carbon footprint, support clean renewable energy, take control via a community co-operative structure which cuts out the large utilities, move your supply with you when you move house, pay for just the amount of energy you use...what's not to like? So, this is certainly something I will go with in due course and have registered my interest with Ripple.

What do others think? Feel free to comment below.

As ever, this article is merely a record of my personal investment decisions and should not be regarded as an endorsement or recommendation - always DYOR!


  1. Good article and a nice find.
    I've invested in renewable energy schemes and I can see the value that is being brought to the table here by Ripple.
    I have shares in companies that generate wind/solar elec. and biogas + heat from waste and I use Bulb for my power (I think they are green(er) but I don't actuall consume the same power that I (my shares that is) produce.

    Just out of interest, I got an RNS this morning to say that Greencoat UK Wind are looking to raise up to ~£650m/500 million shares over the next 12 months . The money to be used for more acquisitions.

    Ripple is a novel idea and Greencoat shows that big money (pension funds and institutions) are getting into the game in a big way.

    1. Thanks GFF and yes, this is an interesting proposal from Ripple and I hope it is successful.

      I do not hold UKW but I imagine the whole sector will be expanding rapidly as we try to meet out carbon reduction targets. The report out today recommends net zero by 2050 which I expect the government to adopt given that parliament declared a climate emergency yesterday.

      I think most people are on board with this transformation so we are seeing the potential for a much greener society unfold in which clean electricity to power our transport, homes and industry will play a crucial role.

      I think small investors have an important part to play. Our money can support 'business as usual' or it can support the transition to a new way of doing things which is far more sustainable in the long term and secures a future for our children and grandchildren.

    2. UKW seem to be buying up the windfarms that power companies like SSE set-up.
      In a way, you are using your money to pay the power companies for their renewable assets allowing them to reinvest in the future of power gen. in this country.
      A win-win I think.

    3. Interesting but then why are the likes of SSE selling their wind turbine assets - apart from ongoing maintenance, its free energy which they can sell to their own customers?

  2. If investing in the equity is considered risky that implies that the business may fail. If it does, where does that leave the community scheme?

    1. Agreed Pinner. There is an undoubted risk with all new start-ups that things may not work out as planned and I hope I have flagged this up clearly. I am not sure how that might affect the future customers of the community co-ownership and the £1,300 they have paid. There should be no problem with continuity of supply as they would be switched to another supplier and hopefully they would be entitled to some refund of the join-up fee but I think you would need to contact Ripple directly for a definitive answer on that one.

      I am sure there would be lots more questions potential customers would have and I imagine the company will develop a page on their site with FAQs and answers.

    2. There are a few questions and answers along these lines on Ripple's Seedrs campaign page, but you have to have a Seedrs account to view them. I'd rather go the route of buying a clutch shares upfront (at £12.66 each) than putting up £1,300 later on, but then I am more interested in the investment than in the clean energy consumption angle.

    3. I also see on the Ripple website they already have a FAQ page so could be added to over time as queries arise from potential new customers.

  3. I've tended to invest in similar schemes through companies like Abundance. The user experience and customer support has been great although the pipeline is a relatively slow one and there have been a few bumpy moments for some of their projects.

    I like the idea of buying my energy in advance (that's why I've got solar panels) - but I wonder if Ripple is a driver or follower of wind farm construction. Like you, I'd probably be more interested in buying their product than in investing in the company.

    1. Interesting feedback on Abundance, thanks.

      Yes, I like the idea of a combination of solar panels and battery storage for my house which would make me independent of the grid but then the financial incentives have now disappeared and the cost is relatively high. Also, I may want to move house at some point so on cost and portability of green supply, Ripple would provide an option for me. Either way its really good to see clean electricity making progress.

    2. As someone who can't have solar panels on their roof (listed building) I think that investing in renewable energy is the next best thing.
      I like Abundance and find that it's easy enough to invest a few thousand in the different projects that are on the marketplace - to create a diversified portfolio and it's a very good platform to use as well!
      I'll have a look at Ripple to see if it's my tipple

    3. Yes, listed building or rented accommodation etc. would rule out solar panels, even if you could afford them. So this could be an alternative but with the new drive towards net zero, there could well be many more options coming to the market in the next few years.

      Ripple...tipple...I see what you did there!