Dale Vince is not your typical chief executive. As well as heading up “Britain’s greenest energy company”, Ecotricity, he is a former New Age traveller, owns the local football club – Forest Green Rovers – and is the closest thing you’ll get to a celebrity in the utility world.
Utility Week enters an air-conditioned office in the small Gloucestershire town of Stroud on one of the hottest September days on record and is introduced to a tall man standing at a high desk with long hair, both sides of his head shaved – this is Vince.
It is the day that the Hinkley Point C nuclear power plant is approved by the government, so Utility Week asks him for his opinion. He replies: “It’s so last century.”
Vince is clearly practised in the art of answering questions and replies with a casual tone, glancing down at his watch every so often. He is openly critical of government policy, and says he was hoping that the impact of Theresa May becoming prime minister might change government direction.
“I was hoping against hope that she may cancel Hinkley, which would be the sensible thing to do, and brave – to depart from the Cameron and Osborne kind of theology.”
He still hopes she will move away from fracking, which he says is “a risk we don’t need to take for a gas we can’t afford to burn”. He hopes, too, that she will reverse the recent changes to renewable energy policy.
Vince is a true pioneer of green energy, and the story of how Ecotricity began is a fascinating one. Formerly-named the Renewable Energy Company, it was founded in the early 1990s and was, purportedly, the first company in the world to offer green electricity to customers.
Vince was on the verge of building his first windmill – he prefers the term “windmill” to “wind turbine” – in 1990, when he realised that one of the big obstacles was the need to get a fair price for the electricity. He went to meet the Midlands Electricity Board – the local monopoly energy company at the time – but it offered “a rubbish price”. So he decided to start his own energy company. This allowed him to “cut out the middle man” and supply renewable electricity to the end user himself, enabling a more reasonable price and boosting windmill building.
After a year of careful planning, Ecotricity supplied green electricity from landfill gas to its first customer – the Cheltenham and Gloucester College – on 1 April 1996. Now, 20 years on, the company supplies almost 200,000 customers, and turned over £131.5 million in the most recent financial year, to 30 April 2016. Pre-tax operating profit was £6.7 million.
Asked about the best moment of their careers, many company founders will tell you it was when they broke even, made their first million, or the moment they realised they were the biggest company in their country. Asked about the best moment of his career with Ecotricity, Vince replies: “Our parties are legendary.”
He has always gone against the grain and, where other chief executives may be more diplomatic, he does not curb his contempt for those in power. For one thing, he is “deeply unimpressed” with the “self-destruction” of the Labour Party. “I think the biggest shame is for the country. We just don’t have an opposition worthy of a name in Parliament. The Tories are just doing what they like – they’re not being held to account.”
In the run-up to the last election, Ecotricity donated a quarter of a million pounds to the Labour Party’s election campaign in defiance of the coalition government, which it said had “undermined the green economy”. Vince tells Utility Week the reason for this was that the company “saw it all coming”.
“We thought that if Cameron won he would end onshore wind and solar and basically kill off the renewables industry. And we thought that he would call this crazy referendum and lose it and drag us out of Europe.”
Rather than just “sit by and watch this happen”, the company gave money to Labour, the Greens and the Lib Dems because it felt they all had better policies on renewable energy, climate change and Europe. However, despite its best efforts the Conservatives still came to power and, “as it happened, everything we feared came to pass”.
Unsurprisingly, Vince is “not a fan of the whole Brexit thing”. “I think it’s going to have a massive impact on our country. People who say ‘the worst hasn’t happened, the experts are wrong’ are overlooking one important thing, which is that we haven’t left yet, we’re still in.”
The impacts, he says, will begin to accumulate, culminating in a lack of inward investment. “We’re going to be a lonely little island sat next to the biggest market in the world.”
He thinks smart meters are “a great idea”, but that the rollout “hasn’t been handled too well” and now “realities are dictating that the deadline can’t be met”. The deadline, he argues, needs to be set realistically so that we get there in good shape, “rather than for the sake of ticking a box”, and getting there in bad shape.
“It’s an amusing world, smart meters – we need so many of them, the infrastructure is missing, the engineers, the hardware, it’s just not there, not yet.” However, he has faith that we will get there in the end. Meanwhile, Ecotricity aims to beat the national deadline and have all of its customers on smart meters within a couple of years. At the moment it is “just getting started”.
In its early days, Ecotricity experienced its fair share of disagreements, including a row with the UK’s largest water company, Thames Water, over its failure to pay its electricity bills. The dispute was referred to the high court in 2001, and Thames was threatened with disconnection unless it paid Ecotricity the £1 million bill. Needless to say, the legal action ended in the destruction of a three-year partnership with one of the start-up’s earliest supporters.
As the company has grown in size, it has also grown in audacity. It has recently been in contention with fellow UK green energy company Good Energy and US electric carmaker and energy storage company Tesla over its claims that it supplies “Britain’s greenest energy”. Before August 2013, Ecotricity ran a mix of fuels, with its proportion of renewable energy rising from around 24 per cent in 2007 to approximately 51 per cent in 2011. It now supplies 100 per cent renewable electricity from a mix of wind, solar, hydro, and landfill gas. And the Advertising Standards Authority ruled in favour of Ecotricity in both battles – agreeing that its claims are correct.
Still up for a fight, Ecotricity will challenge government over what it says is illegal state aid for Hinkley, and wrote to the Department for Business, Energy and Industrial Strategy before the Hinkley announcement, calling for a review of the decision to approve the type of reactor used for the plant – the European pressurised reactor – which it believes is out of date. Vince says: “It ain’t over yet.”
Ecotricity also plans to fight the data-sharing remedy resulting from the energy market investigation carried out by the Competition and Markets Authority (CMA). “It’s a nonsense idea, and as we said at the time, it’s something that we don’t intend to take part in.”
He says the CMA “missed a big opportunity” to control predatory pricing by imposing a maximum price for power companies based on the differential between their cheapest tariff and their most expensive one. Instead, it “came up with the idea that the whole market would share its customer data”, meaning 26 million consumers in Britain will shortly be “bombarded” by marketing messages from dozens of energy companies.
“What they’re likely to create is just a blizzard of junk mail. The idea that it will encourage people to switch is just ridiculous. It will do the opposite.”
Is Vince worried that Ofgem will come down hard on the company if it is to disobey? He laughs. “No, I’m not worried – it’s not Ofgem’s way to come down hard.”
So what is next for the defiant independent? Aside from manufacturing small windmills, developing its home storage device – which will be in trial before too long – and challenging the government on numerous points?
Plans for developing tidal lagoons are on the cards. Vince thinks the government’s review of tidal power is a good thing, and believes Ecotricity triggered the consultation when it wrote to the Department of Energy and Climate Change to point out that the strike price of £168 requested by the Swansea Bay Tidal Lagoon was unnecessary. “Tidal lagoons are just sea walls and low-head hydro generators, there’s no technology or learning curve involved,” he insists. “We put those arguments to Decc and within three days they’d announced a review.”
The essence of Ecotricity’s contribution to the review has been to call for a properly competitive contract for difference (CfD) so the government can get value for money on behalf of bill-payers, says Vince. And the company has plans to take part in the CfD process in due course.
Vince is also passionate about the prospect of electric vehicles, something Ecotricity has been looking into for a while. He tells Utility Week “it’s a revolution that is coming”. “I think the days of the petrol and diesel car are numbered. I’ve felt that for a long time, but now that end date is really hastening.”
“There is a lot of talk from European manufacturers that by 2020, cars will have a range of 400 miles, recharging in less than a quarter of an hour, that kind of stuff. Once we reach that point – and it is only about three years away – then the internal combustion engine is basically dead.”
Energy storage – which has also grown rapidly in recent years – is another opportunity the company is exploring. “We’ve been working on ideas,” says Vince. He believes storage is something that needs to be done at grid-scale, business scale, and domestic scale.
“The smart grid is not just coming because technology enables it, it itself will enable greater penetrations of renewable energy so that we can run the whole country on renewable energy – a smart grid is essential to that.”
Up until now the grid has been very “dumb” and is plagued by massive spikes in demand. There are hundreds of megawatts of power stations either on spinning reserve or on standby just to meet those peaks. However, Vince is convinced that technology will soon be taking homes and businesses on and off the grid during peak times, so the country can buffer renewables and completely wean itself off fossil fuels.
Ecotricity sees itself as a “twenty-first century energy company”, bringing together the two things that in the twentieth century were done by different companies – transport energy and home and business energy. Chock full of ideas of how to keep pushing the “green revolution”, Vince is confident that the energy sector is on the verge of transformation.
“I think the old centralised grid days – just like the internal combustion engine in the car – are numbered, and we intend to be at the vanguard of that change.”