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Green Energy Companies Fold

September 25, 2021

By Paul Homewood

 

 

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One of the delicious ironies of the current energy crisis has been the collapse of some of the small green energy companies that have sprung up in the last few years.

I say irony, because it is the very same green policies, which they espoused and hoped to make money out of, that have directly led to this crisis and their demise.

Some of them, such as a company known as “Green.” have been lashing out right, left and centre, blaming their problems on government, the weather, Brexit and goodness knows what else.

The reality is that most, if not all, of them have been poorly run and under capitalised from the start.

Green. , registered as Green Supplier Ltd, is one such tinpot company. Even last year, before the crisis started, their Accounts show they were to all intents and purposes broke:

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Hardly surprising then that they could not manage their way through the crisis now. Most of these new entrants have tried to enter the industry on the cheap, hoping to undercut the big companies and make a fast buck.

In Green.’s case, share capital was just £10, and they appear to have relied on upfront customer payments for their cash flow. (Normally, when you sign up as a new customer, the energy company takes your direct debit straightaway, so you are always paying a month in advance.)

The whole business model of these sort of companies has been a scam from the start, pretending to supply renewable electricity to gullible consumers. But when the wind does not blow and the sun does not shine, they have to buy power from other sources.

If they were only buying wind and solar power, of course, they would not be exposed to  gas price rises!

But their scam has been even worse. Wind and solar power have for years cost much more than conventional electricity, but the subsidies paid out for it have been added onto everybody’s bills. If customers of these green energy suppliers had to pay the full cost of wind and solar, they would quickly take their business elsewhere.

Yet, for some strange reason, the likes of Green. think taxpayers should be bailing them out!

29 Comments
  1. Thomas Carr permalink
    September 25, 2021 11:21 am

    Is the green surcharge about 27% on our domestic electricity bills? If the government and the Bank of England were sincere about their concern for the inflationary effect of electricity price rises they would look to reduce the green surcharge for a start.

    • charles wardrop permalink
      September 25, 2021 11:38 am

      No green taxes or climate greenery are relevant to the nation’ or the planet’s well-being.

    • Phoenix44 permalink
      September 25, 2021 2:46 pm

      Cutting VAT to zero would be a simple reduction.

  2. devonblueboy permalink
    September 25, 2021 11:22 am

    But how on earth are we going to ‘save the world’ if that happens?!!

    • Robert Christopher permalink
      September 25, 2021 11:31 am

      You don’t want to know! 🙂

      (Even though it would be wise to find out )

  3. Joe Public permalink
    September 25, 2021 11:26 am

    Ofgem must bear some responsibility.

    If all start-ups, rather than just ‘large’ suppliers (i.e. those having 150,000 or more gas and/or electricity customer accounts), had to bear their fair share of the costs of the likes of the Smart Meter fiasco, fewer would have been tempted to try to make a fast buck.

    BTW – who remembers the call for windfall taxes on energy suppliers whan gas prices plummeted last year? Me neither.

    https://www.naturalgasintel.com/gasmageddon-is-here-with-natgas-prices-averaging-1-99-in-2020-say-analysts-2/

  4. Nordisch geo-climber permalink
    September 25, 2021 12:04 pm

    The problem is here at the top – take a look at this toe-curling website:
    https://www.cen.uk.com/our-people

  5. It doesn't add up... permalink
    September 25, 2021 12:34 pm

    You have to laugh.

    https://amp.smh.com.au/business/companies/regulator-sues-tesla-big-battery-in-federal-court-over-power-grid-promises-20210923-p58u1b.html

    Didn’t do what it was supposed to. I think that was probably the period when the battery was making a fortune from FCAS too. Perhaps our Australian friends can confirm.

  6. Vanessa permalink
    September 25, 2021 2:12 pm

    Those F…..ing ignorant idiots stitched up this country and then LEFT !! We are in a SHIT-HOLE because of their stupidity and NOBODY HAS THE GUTS TO EXTRICATE US FROM THIS MADNESS which WE HAVE TO KEEP PAYING FOR. Do some research to find the TRUTH or realise that it is a SCAM OF THE BIGGEST ORDER. WHY IS IT THAT THEY HAVE TO KEEP ON AND ON AND ON reminding us how TERRIBLE it will be ???

  7. Chris Davie permalink
    September 25, 2021 2:22 pm

    These companies appear to be little more than market traders – they don’t actually generate electricity or store gas, they just trade futures (including your direct debits) and hope that what they charge will be more than the spot price of the power they are selling to you. The only people actually making money in this are the bankers (a.k.a. casino operators) who sell them the futures contracts on which they (and we) depend.

    But only about 25% of what they charge you is for the actual power they are selling you and for which they are at risk – the rest is environmental charges and subsidies that are collected on behalf of the government (a.k.a. taxes).

    • Phoenix44 permalink
      September 25, 2021 2:39 pm

      Sorry that’s garbled nonsense. If these companies had hedged i.e. offloaded their risk of a mismatch to the City, they would be fine. That they got caught unhedged with fixed prices on one side and floating prices on the other is sheer stupidity, not the fault of “bankers”.

      And what were Ofgem doing allowing these risks? Anybody with even the slightest knowledge of the market would have warned off the problem.

      • It doesn't add up... permalink
        September 25, 2021 3:04 pm

        Many of these companies got established ahead of a period of falling prices. They understood that the hedged big companies were committing to expensive forward purchases that would be easy to undercut as prices fell. They also understand that until they cross certain customer thresholds they were exempted from having to pay out on many of the green subsidies, smart meter rollouts etc., giving them a cost advantage to offset the lack of economies of scale on things like billing systems.

        So far as hedging is concerned, many of them have simply been refused credit on longer maturities in OTC markets, and in any case find it difficult to guess how large their customer portfolio might be many months ahead, even if they can put up maintenance and mark to market margins for futures. Volatile markets lead to rapidly escalating collateral demands. But the real killer is that futures markets only hedge until before the delivery month starts. Translating those hedges which assume an even delivery flow across the month into the very uneven pattern of demand across each half hour within the month, and the enormous exposure on high volatility of balancing prices when you don’t even really know how much you will have been deemed to deliver to your customers is a very different game. Markets to suit that for small suppliers don’t really exist. Hedging can be costly. Not hedging can be costly.

        https://watt-logic.com/2021/09/15/energy-prices-soar/

  8. Magnum permalink
    September 25, 2021 2:29 pm

    https://www.express.co.uk/news/nature/1494837/gas-grass-plant-money-saving-switch-carbon-neutral-biomethane-climate-change?fbclid=IwAR06DKMFGxGh1xec_fMRhYFXc6y5Twird-pyLs0HkBxRIuRY3ETTBnrVxWY

    This is Dale Vince’s answer to the current energy crisis. It sounds too good to be true, any chance someone could analyse his claims?? Thank you.

  9. Phoenix44 permalink
    September 25, 2021 2:44 pm

    I don’t know how the auditors signed off those accounts. They owe a net £6 million in the short term and it’s not clear how they could pay that. Ofgem seems to have simply ignored the risks.

  10. September 25, 2021 3:42 pm

    If they don’t collapse of their own accord, some should be ridiculed out of business, e.g. OVO Energy that boasts that it generates lekky from “unreliable weather”. You just can’t make this stuff up.

  11. Penda100 permalink
    September 25, 2021 4:59 pm

    I wonder how much the directors paid themselves?

    • September 25, 2021 8:48 pm

      This from the Spectator:

      Some 13 companies have gone under since the start of 2020, affecting a cumulative total of some 2.2 million customers. High compensation is a feature of many of them: Tonik Energy for instance paid its directors in 2019 a total of £300,000 including one who received £153,000. Utility Point gave one director £198,000 in June 2020, seven months prior to going under, while the Green Energy Network paid its Chief Executive more than £307,000 up to April 2020 – nine months before it went bust. PFP Energy, which collapsed this month, gave its best compensated director £283,000 in March 2020 – just 18 months ago.

      The two that went bust this week are Avro Energy and Green Supplier Limited. The former was owned by Jack Brown, a former non-league footballer in his twenties who set up the firm while an undergraduate student. It expanded rapidly by offering families cheaper electricity and gas. Its turnover soared from £80 million in 2017 to £390 million in the 18 months to June 2019. Despite this, a small profit slumped to a £28 million loss.

      Avro do not declare director salaries but in the 2019 accounts they declared management charges of £2.25m to Sentido Marketing which is wholly owned by the people who own Avro. Sentido’s 2020 accounts show an increase of £440,000 in loans to the directors. A further £830,000 unsecured loan was given to Berkeley Swiss Limited, a construction company controlled by Jack Brown and his father.

  12. GeorgeLet permalink
    September 25, 2021 11:57 pm

    It’s all part of this climate change due to fossil fuel CO2 SCAM. They probably pocketed taxpayer money and folded.

    • September 26, 2021 12:10 am

      Yes, the worst, costliest scam since German Nazism and Soviet Communism.

      Our politicos, voted to get the best deal for us are comprehensively failing to deal with it.

      Donald Trump, for all his imperfections, was the only Western leader to see through it.

      The wily ones out East, though, are not fooled.

  13. Gerry, England permalink
    September 26, 2021 10:11 am

    As far as I know there is no company that charges a premium for supplying allegedly 100% renewable energy. There used to be but now they are all at it. I joined Green simply because they were cheaper than anyone else. I was also with Utility Point. If you stay below a certain numbers of customers you are exempt from the green taxes which means you can charge less. There look to be a number of companies that can’t afford to pay the green taxes and will likely fold.

    The MoS today has an article on a man who sells packaged energy companies and created both of those above.

  14. Dave Gardner permalink
    September 26, 2021 1:21 pm

    I remember back in 2014 there was a kefuffle where it was revealed that the Energy Secretary of the time, Ed Davey (who is currently leader of the Lib Dems), was signed up with one of these small Green energy suppliers, an outfit called ‘Green Star Energy’.

    http://www.dailymail.co.uk/news/article-2714471/Energy-Secretary-switches-power-supplier-dodging-green-taxes-WE-pay.html

    The irony was that the man whose department was imposing various Green levies on the nation was himself dodging them.

    It looks like Green Star Energy folded up in late 2019, and its customers were then transferred to ‘Shell Energy’, which supplies ‘100% renewable electricity’, and is owned by Big Oil’s Shell.

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