1. I am currently selling the energy I generate to a supplier through a power purchase agreement (PPA) – can I still become part of an Energy Local club?
Yes you can, but you will have to wait until your current power purchase agreement (PPA) expires (or exercise a break clause). You will then be asked to sign a new PPA with the supplier that is working with the Energy Local Club. Your Energy Local Club can provide a full description of the contractual arrangements between themselves, yourselves and the supplier in the Energy Local model.
2. Will I earn additional income by being part of an Energy Local Club?
Potentially, yes. At the moment you receive an income for every kWh that you export. The price paid for a kWh (unit) is the rate specified in your PPA, or the FIT minimum export price.
Once you are part of the Energy Local Club (ELC), units that are consumed by the members of the ELC in the same half hour as it was generated will be paid at the “match” tariff. Units of electricity that are not used by consumers in the same half hour period are exported and earn the rate specified in the new PPA.
The supplier makes sure you receive both payments and will send you an income statement that will set out the units matched and the units sold for each period.
3. Do I have to become a member of the Energy Local Club?
Yes, the ELC is a cooperative. The members are the consumers and a generator, and everyone should benefit from being in the club.
The members of the ELC have two principle roles:
- Agree who will be the electricity supplier that the club’s members (consumers and generators) will contract with, and;
- Set the value of the ‘match’ tariff.
The constitution of the cooperative has been written so that both the consumer members and the generator members have to reach an agreement on these issues – the more numerous consumer members are not able to force through a ‘match’ tariff without the agreement of the generator(s).
4. How is the match tariff set?
Representatives of the generator members and consumer members will meet in order to agree the match tariff price. The price should allow both consumers and generators to benefit. The generator only receives the match tariff when the electricity is used locally, so the match tariff should provide an incentive for consumers to use electricity when being produced locally rather than purely when convenient. Maximising the number of matched units should benefit both consumer and generator but the nature of this benefit may differ depending on the interests of the community, e.g., if a community owned renewable asset puts increased profits into local projects, this may be deemed more of an incentive than a reduction on individual bills.
5. Does being a member of the ELC carry any liabilities?
There are no liabilities that come with being a member of the ELC. You will have a responsibility to contribute to the smooth running of the ELC – contributing to decisions on the appointment of suppliers and setting the ‘match’ tariff.
6. Can I leave the ELC in the future?
Yes, you will sign a new PPA with the supplier selected by the ELC. This PPA will be for a period of time, typically a year. At the end of that period, if you wish to you can elect to leave the ELC and sign a new PPA with another supplier.
7. Does the match tariff change over time to reflect changes in wholesale and retail prices?
The ‘match’ tariff can be reviewed at any time and can be changed with the mutual consent of both the consumer and generator members of the ELC.
8. Does being part of an Energy Local Club affect my generation FIT income?
No, the Energy Local Club is only concerned with the income you receive for exporting electricity that you have generated. It will not change the income you receive through FIT for generation. However, the FIT for generation will be paid by your new supplier – the supplier supporting the Energy Local Club.
9. Will any income I receive from “embedded benefits” be affected by joining an Energy Local Club?
PPA contracts vary from supplier to supplier. Some PPAs give a single price per unit exported. Others account separately for the price per unit and the “embedded benefit” for distributed generation. These embedded benefits are calculated based on the number of units exported.
Within an ELC, since some of the units generated are “matched” to local demand, there will be less units exported and therefore a reduction in the embedded benefit that you can earn. However, this reduction should be more than compensated by the increased income earned through the ‘match’ tariff. You will need to satisfy yourself that any reduction in embedded benefits is more than covered by the additional income through matching.
10. Who can I ask for advice on establishing an Energy Local Club?
Each ELC is established with the support of a regional Facilitator, a local organisation that works in partnership with Energy Local CIC – the not-for profit organisation who founded the Energy Local model. The Facilitator should be your first point of contact – they will employ Advisors to work directly with you. Any questions that the facilitator is unable to answer will be referred to Energy Local CIC. The Advisor will need to know the location and type of generator, and will need to see any records of previous generation and any current PPA or MOP contract.
11. What are the consequences if I stop generating for an extended period of time?
If you are not generating then there will be no matching of generation to local demand. The consumer members of the ELC will be importing all of their electricity under a supply agreement and not benefitting from the lower matched tariff.
This highlights that both the generator and the consumer benefit when electricity demand matches generation within the ELC. Increasing the match between generation and demand can be achieved through consumer behaviour change the use of batteries.
12. What about half-hour meters, the MOP, and the data collector and data aggregator?
Generators are responsible for arranging their own half-hourly meter and paying a Meter Operator (MOP) to operate it. The meter operator must be the same as the meter operator for the demand customers, so you’ll need to discuss this within the club. A 3-phase meter is about £350 and operation is about £45/MPAN per year. We are currently working with Energy Assets.
The data collector and data aggregator for your meter must also be the same as for the demand members. We are currently working with TMA. This is generally organised by the supplier and included in the PPA but you will need to check this with the supplier.
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