- Ripple members’ saving from their Graig Fatha wind farm are set to increase due to high wholesale electricity prices to double the rate expected when the wind farm opened for ownership in summer 2020
- Wind farm owners expected to save an incredible 8p/kWh on electricity generated by their wind farm
- A typical household is expected to save on average £232, alongside collectively reducing their carbon footprint by 1 million kg of CO2
Electricity prices set to soar for millions of UK households from October
Wholesale electricity prices have hit record levels recently. The increase is driven by high gas prices (gas is burnt in power stations to generate electricity), many nuclear power stations being offline, lower than average renewable generation and a fire at one of the grid links from France.
The high prices led the energy regulator Ofgem to last month announce that the price cap for default domestic energy deals would be increased from October. The news came as a shock to millions of UK households, some of whom could see their energy bills rise by at least £139 a year from October, right when they use electricity the most.
Why are Ripple’s Graig Fatha members saving so much now?
Ripple’s 900 members together own the Graig Fatha wind farm in south Wales. Graig Fatha is due to begin operating in December. Graig Fatha’s owners realised savings on their electricity bill. Their wind farm savings rate is the difference between the wholesale electricity price and the low and stable cost of operating the wind farm. The more of the wind farm they own, the more green, zero carbon electricity they own and the greater their bill saving will be. Each month they get the wind farm savings, multiplied by their share of the generation from the wind farm, as a saving on their electricity bill.
Whilst wholesale prices have increased significantly in recent months, the projected cost of operating the wind farm has not. This means Ripple member savings will be significantly higher than the initial estimates provided when they first signed up. Ripple launched the share offer for Graig Fatha, the UK’s first consumer owned wind farm, in summer 2020. At the time, wholesale electricity market prices were very low, in part due to the Covid lockdowns. Members signing up at that point were given an estimated savings of less than 4p/kWh during the first year. Fast forward 15 months and the market price is considerably higher. Ripple now expected its members savings to be around 8p/kWh for at least the first year of the wind farm’s lifetime. This is double the level estimated initially.
How much are households set to save with Ripple?
Ripple’s Graig Fatha member savings will depend on how much of the wind farm they have chosen to own. A typical UK household use 2,900kWh of electricity per year. If they wanted to own enough of the wind farm to meet their entire electricity usage, would have needed to pay around £1,880 up-front for their share of the wind farm. Their share of the wind farm would be expected to generate 2,900kWh of low cost, green electricity each year.
Their bill from Ripple’s current supply partner, Co-op Energy, powered by Octopus Energy, would have cost around £774 a year without Ripple. Now, with their Ripple wind farm savings added, they would expect to save around 8p/kWh multiplied by the 2,900kWh of generation from their wind farm per year. That results in an expected saving of £232 a year. Ripple members tend own on more than a typical UK household would, so their average saving is set to be £288.
(Savings based on typical household living in London on a Your Co-op Energy 12 month fixed price tariff, prices correct 22.09.21)
Wind farm ownership protects against volatile electricity prices
Ripple helps protect households from volatile wholesale electricity prices. High wholesale prices tend to drive higher electricity bills. Yet with Ripple, high wholesale prices mean greater wind farm savings. This helps compensate for higher prices. When wholesale prices are low, bills tend to be too. The wind farm savings would be lower as well. Ripple therefore helps stabilise household’s electricity bills.
More Welsh Government funding for fuel poverty
The Welsh Government gave a grant to the Graig Fatha co-operative. What would otherwise be bill savings for the share of the wind farm funded by the Welsh Government will be used to help alleviate fuel poverty in the region. When the grant was awarded, it was estimated that on average £75,000 per year would be generated by the wind farm. The higher level of savings in the first year of Graig Fatha’s operation mean over £140,000 is now estimated to be available for fuel poverty action. The increased funding, driven by higher electricity prices, means more fuel poverty funding is available when it’s needed the most – when high electricity bills risk pushing more people into fuel poverty.
Ripple’s second wind farm is now open for reservations
Due to exceptionally high demand, Ripple’s first wind farm, Graig Fatha, is now closed to new membership and has begun construction. People can reserve a place in Ripple’s second wind farm ahead of the full public launch later in the winter. Head to rippleenergy.com to reserve your shares.