I will VOTE NO to changing the Co-Op rules, to allow participation in the CFD auction, for the following 2 reasons, which have also been highlighted by others.
1 - I want to protect my personal finances, if energy prices rise. I understand the CFD prevents this happening, by offering a fixed return /KWH.
2 - The CFD appears to solve a problem that I am not really interested in, lower energy costs. I’d be be very happy if energy prices drop, because clearly I would benefit from this as a consumer of electricity, with or without a CFD.
Fundamentally the CFD transfers the risk of high prices to the organisation providing the energy. I want the opposite of this, to protect myself from the risk of high energy prices, by benefiting from higher financial returns, in the event of higher electricity costs.
I think I understand why entering a CFD would help to manage the co-op debt financing, by smoothing out the returns. However for myself as a co-op member, I am sceptical about the basis for entering a CFD, for my portion of the wind farm output. The logic for this relies on the government predictions for low future energy costs.
The government energy price predictions cannot allow for unforeseen events, that would increase energy costs. Hence my opinion is that they are likely to underestimate the likely future cost of electricity, which would make the CFD approach less attractive.
In addition, the government has a poor record of managing the UK energy supply. This is why organisations like Ripple are so important, to help ensure secure and sustainable energy for our country. The Government predictions for future energy costs are unlikely to factor in these failings, which again suggests that they will underestimate the future costs of energy. Again this would make the CFD approach less attractive.
I will VOTE NO to changes in the co-op terms.
If I have misunderstood these issues, I’ll be very pleased to be corrected.