Zoe Williams
the Guardian
Thriving eco energy firm founder Juliet Davenport on power through profit and growing prospects of challenging the Big Six
“When you look at markets, the best thing is not to know what you
know now. Because otherwise you just wouldn’t do it. If you knew
everything, you would never make a decision.”
Juliet Davenport set herself a simple but gargantuan task: to supply customers with renewably sourced energy. Her company, Good Energy, is one of a very few companies who do this – Co-op is another, Ecotricity is the one my mum uses, but the strides these companies have made between them are incredible. Davenport herself is a fascinating mix of hard-boiled analysis and lavish optimism, not so much feel the fear but do it anyway as finely calibrate the fear with mathematical modelling, map the fear in a number of different scenarios, then still do it anyway.
We currently look at the energy market and see the Big Six in control of everything, consumers impotent in the face of price rises, competition between the companies scarcely functioning, and a market that has always sold itself on price point alone becoming ever more expensive. But 15 years ago, this situation wasn’t as pronounced, and the energy market was a pretty curious place for an environmentalist to start. It’s a testament to Davenport’s vision, therefore that, driven by climate change, this is where she began.
“I wasn’t really a business person. I was interested in climate because I did atmospheric physics; as I got interested in the science, I could see that something had to happen here.” She went on to do a masters in economics and from there, she went to the EU and afterwards became a consultant; the final spur to setting up an energy company was a particular debate in the House of Commons, just before the Labour victory of 1997.
“Essentially, they were meant to be discussing energy policy in the UK, and new technologies, where were we going in the future. There was a whole document, this huge file, inches thick, put together to discuss energy efficiency, energy futures … and they didn’t touch it, they didn’t even get to it, they just descended into a conversation about coal versus nuclear power. I just felt so depressed, and thought individuals were probably more interested and better informed in our energy future than anyone in politics.”
Good Energy now has 40,000 customers, £40m in annual revenue, owns the UK’s first commercial windfarm, and has come top in the Which? survey for customer satisfaction in energy provision three years running.Karl Harder, co-founder of Abundance, has worked for years in this sector, and recalls, “I did quite a lot of work with Juliet when she was based in this council building, a little office with about six or seven people. Now they’re next door, with several office blocks, hundreds of staff, it’s been an incredible journey. If you didn’t have brands like Good Energy, environmentalism would just be charities and good intentions. She’s shown that it’s a business. A lot of the debates we’re having now, the pain we’re going through, because of the changing needs of the energy market, she recognised really early on. And she recognised that if you’re going to navigate through it, you’re going to have to connect people to the power they’re using.”
Three primary goals
The company is pretty stringent about what counts as a renewable; unlike some soi-disant renewables suppliers, it won’t use unsustainable biomass, and it won’t use unseparated waste (on the grounds that burning plastic is not that different from burning fossil fuels, even if it is a waste product and you didn’t dig it up just to burn it). Otherwise, they will take pretty much anything, from solar and wind to anaerobic digestion and cheese factories (yes, really – “When they clean the factory, it generates a load of bacteria. It’s called washing. You can reap power from it”). Good Energy itself has three simple aims:
“To provide individuals with the opportunity to be part of this market, whether as investors or customers; to redirect some of the capital from the wrong place into the right place; and to try and make sure that legislative processes don’t exclude this marketplace, they allow it to work properly. I’m not always saying we do a brilliant job on that last point, but we do what we can.”
That first aim is possibly the simplest of the three, both to explain and to execute: customers don’t really have to be brought in on environmental grounds. Good Energy’s average tariff is slightly cheaper than that of the Big Six; if they wanted to, they could sell themselves on price. But that’s not really the purpose of the enterprise, which is more about creating a new market, with a much broader base of generators, as well as some principles and maybe a concern for the future. Good Energy customers need very little persuading of the value of this vision: last time the company created a bond for people to invest directly in production (as well as choosing this for their supply), they had to close it after three weeks because they’d raised £15m (these instruments are limited by amount; they’d been aiming for £5m).
That second aim is more contentious, the redirection of capital – Good Energy is a PLC, not a cooperative. There are ethical/green investors who question the role of profit in this sector, asking essentially, what’s the point of revolutionising energy if it’s going to be along traditional lines? “The whole reason we are a for-profit business is so that we redirect some of that massive capital that’s going off somewhere else, into this marketplace.” I agree with this; as much as I respect the more radical agenda of many greens, it tends towards a suffocating purism, dictating that you can’t start anything until it can overturn everything that went before. Davenport’s way seems faster.
And the third point is perhaps the most crucial, even though – containing as it does the word “legislative” – for some it might sound like the most boring, but it is key because of the growing scale of renewable energy provision. There are a few things standing in the way of renewables getting the credit and funding and appreciation they deserve. The first is just a failure to celebrate the sector’s successes loudly enough. “In the early 90s, the renewables industry could collectively get into a room above a pub, and it’s now an international industry, a direct employer of 100,000 people in the UK. In 2012, it was producing around 10% of our usage in the UK – it’s bigger today. In the 90s, it was 2-3%.”
Solar shines out
Solar is a particular success story. “It’s had an incredible couple of years. It’s an amazing, disruptive technology in terms of what it can do. Suddenly, you’ve got up to half a million homes generating probably about 50% of their own power. That’s a complete mindset change. We’ve built an energy market over the past 50 years that assumes large central power stations with big wires transmitting. Suddenly, in the last two years, we’re delivering I think nearly 2GW of power from people’s homes.” This love affair with solar is reciprocated – Leonie Greene, from the Solar Trade Association, says of Davenport: “She’s absolutely brilliant, I have to say. She’s so knowledgeable on the market and how incredibly complicated grid systems work. I can’t rate them enough.”
Along with the failure to champion the success of renewables, there’s been an perennial problem with the way the debate is framed. You hear constantly about green subsidies, and almost nothing about the financial support that goes from government to fossil fuels, which amounts to more money, with a different name. Furthermore, says Davenport: “People talk about feed-in tariffs not being socially progressive but you can make it socially progressive, if you just tweak it slightly. You can support a lot of people in fuel poverty by making them a priority in solar provision.” The reliability of renewables is constantly called into question, while nuclear energy and fracked gas, both years away from being market ready, are treated as money in the bank.
“And people like to disbelieve, because in a sense, you can’t be wrong if you disbelieve. That’s what a lot of lobbying takes advantage of. It’s so difficult to know what’s going on behind closed doors, but I’ve heard the edges of conversations in which this new technology is being dismissed, and you’re thinking: ‘Of course it can work. Of course it can deliver. That dismissal tactic is used quite often in terms of keeping everyone else away.”
Throughout the discussion, whether we’re talking about the frustrations of politics – the fact that the more successful renewables become, the more politicised their use – or the impossibility of knowing just how much vested interests will work against you, Juliet Davenport maintains a brisk confidence, an expectant, infectious certainty that it’s all going to work out. “We don’t have to do it the same way as we’ve always done it. We can change the way we run our economy; we don’t have to run it the way we’re running it now. One of the biggest changes of a decentralised energy economy is that you wouldn’t have six big powers, you’d have lots of people, and we as a society need to get comfortable with that. My view is that it could happen very fast. It’s not about technology anymore. It’s about people.”
Visit the Good Energy tent at the Hay Festival from 22 May – 1 June
Juliet Davenport, founder and CEO of Good Energy. Photograph: Stephen Shepherd
Juliet Davenport set herself a simple but gargantuan task: to supply customers with renewably sourced energy. Her company, Good Energy, is one of a very few companies who do this – Co-op is another, Ecotricity is the one my mum uses, but the strides these companies have made between them are incredible. Davenport herself is a fascinating mix of hard-boiled analysis and lavish optimism, not so much feel the fear but do it anyway as finely calibrate the fear with mathematical modelling, map the fear in a number of different scenarios, then still do it anyway.
We currently look at the energy market and see the Big Six in control of everything, consumers impotent in the face of price rises, competition between the companies scarcely functioning, and a market that has always sold itself on price point alone becoming ever more expensive. But 15 years ago, this situation wasn’t as pronounced, and the energy market was a pretty curious place for an environmentalist to start. It’s a testament to Davenport’s vision, therefore that, driven by climate change, this is where she began.
“I wasn’t really a business person. I was interested in climate because I did atmospheric physics; as I got interested in the science, I could see that something had to happen here.” She went on to do a masters in economics and from there, she went to the EU and afterwards became a consultant; the final spur to setting up an energy company was a particular debate in the House of Commons, just before the Labour victory of 1997.
“Essentially, they were meant to be discussing energy policy in the UK, and new technologies, where were we going in the future. There was a whole document, this huge file, inches thick, put together to discuss energy efficiency, energy futures … and they didn’t touch it, they didn’t even get to it, they just descended into a conversation about coal versus nuclear power. I just felt so depressed, and thought individuals were probably more interested and better informed in our energy future than anyone in politics.”
Good Energy now has 40,000 customers, £40m in annual revenue, owns the UK’s first commercial windfarm, and has come top in the Which? survey for customer satisfaction in energy provision three years running.Karl Harder, co-founder of Abundance, has worked for years in this sector, and recalls, “I did quite a lot of work with Juliet when she was based in this council building, a little office with about six or seven people. Now they’re next door, with several office blocks, hundreds of staff, it’s been an incredible journey. If you didn’t have brands like Good Energy, environmentalism would just be charities and good intentions. She’s shown that it’s a business. A lot of the debates we’re having now, the pain we’re going through, because of the changing needs of the energy market, she recognised really early on. And she recognised that if you’re going to navigate through it, you’re going to have to connect people to the power they’re using.”
Three primary goals
The company is pretty stringent about what counts as a renewable; unlike some soi-disant renewables suppliers, it won’t use unsustainable biomass, and it won’t use unseparated waste (on the grounds that burning plastic is not that different from burning fossil fuels, even if it is a waste product and you didn’t dig it up just to burn it). Otherwise, they will take pretty much anything, from solar and wind to anaerobic digestion and cheese factories (yes, really – “When they clean the factory, it generates a load of bacteria. It’s called washing. You can reap power from it”). Good Energy itself has three simple aims:
“To provide individuals with the opportunity to be part of this market, whether as investors or customers; to redirect some of the capital from the wrong place into the right place; and to try and make sure that legislative processes don’t exclude this marketplace, they allow it to work properly. I’m not always saying we do a brilliant job on that last point, but we do what we can.”
That first aim is possibly the simplest of the three, both to explain and to execute: customers don’t really have to be brought in on environmental grounds. Good Energy’s average tariff is slightly cheaper than that of the Big Six; if they wanted to, they could sell themselves on price. But that’s not really the purpose of the enterprise, which is more about creating a new market, with a much broader base of generators, as well as some principles and maybe a concern for the future. Good Energy customers need very little persuading of the value of this vision: last time the company created a bond for people to invest directly in production (as well as choosing this for their supply), they had to close it after three weeks because they’d raised £15m (these instruments are limited by amount; they’d been aiming for £5m).
That second aim is more contentious, the redirection of capital – Good Energy is a PLC, not a cooperative. There are ethical/green investors who question the role of profit in this sector, asking essentially, what’s the point of revolutionising energy if it’s going to be along traditional lines? “The whole reason we are a for-profit business is so that we redirect some of that massive capital that’s going off somewhere else, into this marketplace.” I agree with this; as much as I respect the more radical agenda of many greens, it tends towards a suffocating purism, dictating that you can’t start anything until it can overturn everything that went before. Davenport’s way seems faster.
And the third point is perhaps the most crucial, even though – containing as it does the word “legislative” – for some it might sound like the most boring, but it is key because of the growing scale of renewable energy provision. There are a few things standing in the way of renewables getting the credit and funding and appreciation they deserve. The first is just a failure to celebrate the sector’s successes loudly enough. “In the early 90s, the renewables industry could collectively get into a room above a pub, and it’s now an international industry, a direct employer of 100,000 people in the UK. In 2012, it was producing around 10% of our usage in the UK – it’s bigger today. In the 90s, it was 2-3%.”
Solar shines out
Solar is a particular success story. “It’s had an incredible couple of years. It’s an amazing, disruptive technology in terms of what it can do. Suddenly, you’ve got up to half a million homes generating probably about 50% of their own power. That’s a complete mindset change. We’ve built an energy market over the past 50 years that assumes large central power stations with big wires transmitting. Suddenly, in the last two years, we’re delivering I think nearly 2GW of power from people’s homes.” This love affair with solar is reciprocated – Leonie Greene, from the Solar Trade Association, says of Davenport: “She’s absolutely brilliant, I have to say. She’s so knowledgeable on the market and how incredibly complicated grid systems work. I can’t rate them enough.”
Along with the failure to champion the success of renewables, there’s been an perennial problem with the way the debate is framed. You hear constantly about green subsidies, and almost nothing about the financial support that goes from government to fossil fuels, which amounts to more money, with a different name. Furthermore, says Davenport: “People talk about feed-in tariffs not being socially progressive but you can make it socially progressive, if you just tweak it slightly. You can support a lot of people in fuel poverty by making them a priority in solar provision.” The reliability of renewables is constantly called into question, while nuclear energy and fracked gas, both years away from being market ready, are treated as money in the bank.
“And people like to disbelieve, because in a sense, you can’t be wrong if you disbelieve. That’s what a lot of lobbying takes advantage of. It’s so difficult to know what’s going on behind closed doors, but I’ve heard the edges of conversations in which this new technology is being dismissed, and you’re thinking: ‘Of course it can work. Of course it can deliver. That dismissal tactic is used quite often in terms of keeping everyone else away.”
Throughout the discussion, whether we’re talking about the frustrations of politics – the fact that the more successful renewables become, the more politicised their use – or the impossibility of knowing just how much vested interests will work against you, Juliet Davenport maintains a brisk confidence, an expectant, infectious certainty that it’s all going to work out. “We don’t have to do it the same way as we’ve always done it. We can change the way we run our economy; we don’t have to run it the way we’re running it now. One of the biggest changes of a decentralised energy economy is that you wouldn’t have six big powers, you’d have lots of people, and we as a society need to get comfortable with that. My view is that it could happen very fast. It’s not about technology anymore. It’s about people.”
Visit the Good Energy tent at the Hay Festival from 22 May – 1 June
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