Low Carbon Gordano asks, Tilix answers

Neil Williams

07 Jan 2019

  • Client: Low Carbon Gordano
  • Sector: Community energy
  • Persona: Renewable generator
  • Size: SME (<10 employees)
  • Situation: Sustaining success
  • Hired Tilix for:
    • Research
    • Business architecture

Low Carbon Gordano (LCG) is a form of co-operative called a Community Benefit Society. LCG’s purpose is to help the local community to reduce energy costs and become more sustainable through lower carbon footprints. They do this by raising capital for installing revenue creating renewable energy technology and using retained earnings, via a Community Fund, to invest in home energy efficiency.

LCG’s vision is a low carbon future for the Gordano Community and the wider world using a co-operative model to ensure participation and ownership. This will be achieved by:

  1. Reducing carbon through deploying renewable generation and investing in energy reduction measures.
  2. Reinvesting retained earnings in carbon reduction projects in Gordano.
  3. Supporting a sustainable local economy.
  4. Encouraging all sectors of the community to adopt low carbon lifestyles.
  5. Collaborating with other communities, especially those that are energy deprived, to alleviate fuel poverty.

Challenge

Local energy systems are concerned with energy supply and demand within villages, districts and so on. Through combining renewable generation with innovative energy distribution, management and metering, novel business models, which can include low carbon transport and heating, are benefiting communities with energy that is cheap, clean and cheerful.

In 2018, despite the growing maturity of technology and renewable generation business models, optimism in the community energy market was at a low ebb due to reductions in subsidy support and unclear government strategy. In response to this challenge, LCG decided to explore energy efficiency and wider low carbon projects with greater gusto.

It is within this context that LCG commissioned a feasibility study into new energy sharing business models made possible with smart metering, solar PV on roofs and batteries. To provide additional perspective, LCG asked tilix.energy to review the findings of this research.

Solution

In being a critical friend to the energy sharing feasibility study, Tilix provided an investor due diligence service to LCG which included:

  • Renewable energy appraisal
  • System design review
  • Stress testing the business model
  • Value proposition development
  • Enterprise architecture advisory

The primary aim was to verify and validate the products of the energy sharing feasibility study. A secondary aim was to refine the energy sharing ideas across the dimensions of people, process, technology and organisation.

In response, Tilix created a short due-diligence report which helped inform Low Carbon Gordano’s investment decision making process. The report included:

  • Positioning: distilled the basic ideas from the feasibility study into the standard style positioning statements.
  • Real options: An analysis of the options available and their key features.
  • Resource requirements: A look at the readiness of the some of the resources required to fulfil the vision.
  • Strategy: An assessment of energy sharing relative to the “Hierarchy of Powers” model devised by Geoffrey Moore, the Silicon Valley thought leader.
  • Tactics: An appraisal of the risks, issues, assumptions and dependencies coming out of the feasibility study. Recommended “cost of delay” as a metric to manage timescales and priorities.
  • Conclusions: Constructive criticism with actionable insights.

Benefits

Energy sharing has generated a lot of hype and there is some anecdotal information, but a formal study is essential to analyse the possibilities.

A feasibility study by a local activist combined with the due diligence from tilix.energy provided Low Carbon Gordano the information they required to decide whether to progress with a project or investigate other opportunities. The local impact of energy sharing could be significant, but there is also considerable fear, uncertainty and doubt around the level of innovation required to make it all work.

Overall this was a useful capacity building, awareness raising and collaborative working exercise.

We found that tilix.energy had a good understanding of community groups and delivered high quality communication, both written and verbal. We’re very appreciative of the work done by tilix.energy and would not have been able to take such a detailed look at energy sharing without this pro bono support. Bob Langton, LCG Director.

The work has left LCG with more information on the potential of energy sharing schemes as well as information on how to progress. LCG Director, Chris Stuart-Bennett.

About Tilix

Tilix is a boutique management consultancy which supports the community energy sector’s development by offering a range of pro bono services.

Tilix understands existing community energy support structures. The firm can help community energy develop technically, economically, commercially and socially.

Tilix experience spans from ideation to O&M across technologies and from micro to macro scales. We offer project management, environmental assessment, resource assessments and design engineering, alongside various economic services, including financial modelling.

Tilix expertise includes renewables, distributed systems, energy storage, smart metering, low carbon heating, electric mobility, demand side response and industry regulations.

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