I am CEO of an energy trading consultancy, specialising in the sale of electricity from renewable generation projects.
I must say, I am somewhat unsurprised that the CfD topic has come up and I can see the benefits of it for Ripple by stabilising project income, however I have to say that the benefits to members are far from clear and I would argue that we already have a CfD by owning our own generation to meet our own supply requirements.
At present, each member has supply costs to their home or business. When energy prices rise our costs rise and we end up paying higher bills as a result. By investing in a Ripple project such as Kirk Hill the benefit to members is that if energy prices rise, although our home energy costs rise, so does the income received by the project and therefore we have a hedged position. This is something Ripple explains very clearly in their offer documentation and I am sure I was not the only person to be attracted to this long term hedge approach.
Ripple is now exploring whether to elect the project into a long term (15 year) CfD contract which would fix the price at which Kirk Hill is paid for electricity generated. This means that if energy market prices rise, our home and business electricity costs rise, but the income from Kirk Hill does not. This is no longer a hedge, and simply opens up a speculative position in the market instead. If you want to bet on energy prices falling, then great, a CfD will achieve this outcome, however that is not why I signed up to Ripple and Kirk Hill. I was looking to support net zero and achieve a long term price hedge for my energy supply costs.
So I urge all members who joined for the reasons I did, DO NOT vote for an amendment to opt us into a CfD. It will undo all the benefit we have of being both the owner and consumer of our electricity market exposure.
Rob