This presentation formed part of the Farming Futures workshop 'Focus on: Renewables in the South East'. 11th February 2009

1. Setting up an Energy
Supply Company (ESCo)
Douglas Jackson
Consultant
Laurence Gould Partnership Ltd.

2. Introduction
1. Background
2. What is an ESCo;
3. How does an ESCo work?
4. Key points for setting up an ESCo;
5. Case Study 1: Cantium Energy;
6. Case Study 2: Cornwall Wind Project;
7. Grants & Support;

3. Background
LGP is involved with a range of
renewable energy projects – biodiesel,
bioethanol, AD, wind, CHP and hydro;
Advice to County Council in South East
on the establishment of a renewable fuel
supply company;
Advice to farms and farmer co-ops on
the establishment and management of
ESCo and renewable energy projects;

4. Drivers for Interest…
1. Need to secure renewable fuels for the future;
2. Governmental support (grants and subsidies);
3. Farmers have the resources available;
4. Opportunity for farming to access new markets –
another form of diversification;

5. What is an ESCo?
Energy Supply Company (ESCo);
Typically company to supply, operate or maintain energy
systems;
Model for delivery of:
• Renewable energy generation and sale;
• Energy savings/efficiency improvements;
• Energy marketing;
Legal status of ESCo – decided by management;
Can be individual projects or wider objectives;

6. How does an ESCo Work?
Business sells energy or expertise;
Typically company generates energy and
sells to an end user;
Energy is generated on site i.e. wind farm
exporting energy to national grid; or
Off site i.e. CHP engines at point of end use;

7. Key Points - Setting up ESCo
1. Identify the opportunity and market;
2. Identify partners/investors;
3. Establish the business structure and model;
4. Identify business objectives and develop the
business plan;
5. Detailed market research and identify initial
customers;
6. Secure finance for the business;
7. Commence trading;

8. Case Study: Cantium Energy
SEEDA funded research project
investigated renewable energy (biodiesel
for road transport) from the whole oilseed
rape crop;

9. Case Study: Cantium Energy
Discovered that biodiesel for road use very
difficult with OSR – meeting EN14214;
Energy generation from CHP does not
require fuel to meet EN14214;
Small scale CHP (25-250kW) is not catered
for in current markets;

10. Case Study: Cantium Energy
Further research indicated that:
• Businesses and organisations interested in CHP;
• Concerns over reliability and procurement;
• Investment often a limiting factor;
ESCo was then established to deliver small
scale, reliable and environmentally friendly
CHP to local businesses with engines
installed at point of use;

11. Case Study: Cantium Energy
Cantium installs 25-250kW CHP engines at
the point of use;
Cantium maintains the engines and supplies
the fuel;

12. Case Study: Cantium Energy
Electricity and heat is sold to the end-user;
Energy price is related to fuel prices;
Feedstock is procured on energy price
related contracts;
ROCs are sold by Cantium at auction;

13. Case Study: Cantium Energy
Company is Ltd.;
All partners are shareholders (directors hold
additional shares) – 40% share capital
reserve;
Capital investment is ~£40,000 per
installation;
Financed by Finance South-East loan,
Carbon Trust Loan Scheme and private
finance;

14. Case Study:
Cornwall Wind Project
Group of Cornish farmers establishing
a wind farm;
Electricity to be sold to the grid;
Minimal impact in terms of loss of land;

15. Case Study:
Cornwall Wind Project
Set up as a cooperative;
Each provided capital for investment;
Receive ‘rent’ for land and share of
profits;
Sales from electric & ROCs;
Overheads include rent and
maintenance;

16. Grants & Support
Capital
RDPE – SEEDA (www.seeda.co.uk);
Bio-energy Grant Schemes (www.defra.gov.uk);
Carbon Trust (www.carbontrust.co.uk);
Low Carbon Buildings
(www.lowcarbonbuildings.org.uk)

17. Grants & Support
Advice
• Good Energy (www.good-energy.co.uk)
• Green Energy UK (www.greenenergy.uk.com)
• Ecotricity (www.ecotricity.co.uk)
• Tradelink (www.tradelinksolutions.com)
• OFGEM (www.ofgem.gov.uk)

18. For more information or to
discuss….
Douglas Jackson
Laurence Gould Partnership Ltd.
T: 01444 232 822
M: 07500 885 831
E: douglas@laurencegould.com
W: www.laurencegould.com