Dale Vince, the founder, of Ecotricity, didn’t start out planning to build a business worth an estimated £100 million. In fact his primary concern, living out of a van on top of a hill in Stroud in 1991, was generating enough electricity to meet his own needs. Two decades later, he is the hippy who decided to ‘drop in’, sole owner of a major green electricity company and, surprisingly, a dedicated speed nut who owns a supercar (of which, more later). Perched atop that hill in the early 1990s, Vince could be sure of one thing at least - that there was plenty of wind. He was already using a small portable turbine to charge batteries, but decided that he wanted to build something bigger, which would provide for all of his - and others - energy needs.
First, though, he explains over the phone from Ecotricity’s headquarters - the company is based in Stroud to this day - he discovered that he would need a monitoring tower, to work out exactly how powerful the wind on his hill was. ‘When I decided to build big windmills in 1991,’ he says, ‘I found out that I needed a wind monitoring tower. I didn’t have the money to buy one, so I made my own.’ The monitoring tower Vince built was such a success that other companies working on wind power soon came knocking at his door, asking him to build similar equipment for them. This led to the foundation of Western Windpower, now Nexgen, which sold wind measurement instruments from 1992 onward. The wind measurement business supported Vince’s efforts to build his first large-scale wind turbine, which was commissioned in 1996. However much of a hippy he may claim to be, Vince clearly has entrepreneurial blood - he was selling renewables-generated electricity a year before he even started up that first turbine, linking up a local wind producer with local demand. ‘We became what we still believe was the first supplier of green electricity in the world,’ he says.
Ecotricity’s first wind turbine generated half a megawatt (MW) of energy and was one of the first private schemes to take advantage of the UK’s Non Fossil Fuel Obligation commitments. It started generating energy on 13 December 1996. ‘It was a five-year journey,’ Vince says. ‘I was living in the trailer and I knew there was enough wind. I had lived in a variety of vehicles that I built myself. It struck me that I could do more if I dropped in and went bigger. When I dropped in, it was to build a windmill. Then I started thinking about building more. Then the idea of becoming part of the big seven came along.’ The ‘big six’ are the UK’s main utility providers who have a stranglehold on the country’s energy markets and they are E.ON, Centrica, EDF, npower, Scottish Power, and Scottish and Southern. Vince’s plan since the late 1990s has been to grow Ecotricity to the size where it could challenge their ubiquity but with a key difference: he wanted to reinvest most of the company’s profits into renewable energy schemes. First, however, he had to convince customers that renewables were a reliable source of energy.
‘It was mostly skepticism,’ he says of the initial reaction to Ecotricity’s plans. ‘Potential customers were worried that we wouldn’t be able to keep the lights on. We got there slowly. It took doggedness, sheer force of will. It’s like one of those exponential curves. We hit 50,000 customers in July . Recent growth has been just phenomenal. The next step is to do it at scale. Let’s be the seventh biggest energy company in the UK. And we think that within the next 10 years we could do that.’
The company currently produces 52MW using 51 wind turbines and is in the process of planning and building a further 200MW of renewable electricity generating capacity. In July 2011, Ecotricity’s first solar energy generating capacity, a facility at Fen Farm in Lincolnshire came online, generating 1MW of energy via 5,000 solar panels. Vince is almost totally unique among green entrepreneurs in that he has not had to sell a stake in the company, building it slowly to begin with, faster lately, and investing most of its profits into building new capacity. He thinks that the idea of selling an equity stake in companies to help them grow doesn’t work. ‘I think the orthodoxy is wrong,’ he says. ‘The reason people sell stakes or go to IPOs is that they are looking for an exit. I’m not like that. I see myself as the guardian of Ecotricity. It’s not interesting to me to sell up; if I had £100m, I’d just start another green electricity company.’
Instead, the company has pioneered bond issuances to finance new projects, targeting existing customers looking for investment opportunities rather than traditional financial markets. In 2010, the company raised £10m through its first EcoBonds issue, and another bond is planned in 2011 or 2012. ‘We were making money and putting it all back in to the company,’ Vince says. ‘Banks were offering credit at seven to eight per cent but giving clients two per cent. The idea was to cut out the middleman, the badass bankers, and give people a stake in the green revolution.’ He is also keen to point out that Ecotricity genuinely does invest in the future. The company reinvests more in new renewable production capacity per customer than any other green energy company, Vince says. This also means that the mix of green energy which Ecotricity supplies its customers is increasing every year, although the fact that the company sells a mix of renewable and traditionally produced energy has been a source of some opprobrium for some.
Ecotricity has come in for criticism from other suppliers for presenting itself as ‘green’ while the electricity it sells its customers is a mix of energy produced by renewable plants and traditional ‘dirty’ energy. Vince, however, says that this has been the best way to grow the company quickly. Anyway, he says, there is no such thing as 100 per cent green electricity. ‘It’s one of the fallacies of 100 per cent,’ he says. ‘Supply is often presented to customers as being off the grid but nothing is ever 100 per cent; it is an accounting methodology. It is not the half-hour by half-hour balancing act of actually happens.’ Further, he adds, 55 per cent of the company’s electricity is produced using wind power, and this figure will only grow, to about 60 per cent, by the end of 2011. Looking to the future, Ecotricity is investing heavily in new technology, particularly its ‘Black Box’, which would store energy during periods of low demand for use during peak periods, its Ion Horse electric bike and Snapper sea power projects. All in all, Vince reckons the company’s current slate of R&D schemes will cost around £20m.
The project closest to Vince’s heart is the development of his electric supercar, the Nemesis, and nationwide charging stations for electric vehicles powered by renewable energy. Nemesis took two years to develop with the stated aim of ‘blowing the socks’ off of Jeremy Clarkson. It can accelerate to 100 miles an hour (mph) in 8.5 seconds and has a top speed of 170mph. Vince drives it, and only charges it using wind-produced electricity. He is skeptical of plans to develop hydrogen-cell powered cars – a wheeze that is costing major auto-firms billions of dollars and taking years to research. With Nemesis, he has proven that it’s possible to build a decent electric car, he says, and what is really needed are a series of charging stations for electric vehicles. So, in July, he inaugurated a scheme that has seen solar-powered charging centres set up at 12 Welcome Break service stations - a figure that has since risen to almost 30. ‘The idea of having electric cars is just a chicken and egg thing,’ he says. ‘To get people using the cars, you need the charging infrastructure but to make that cost effective you have to have people using the cars.’
Given that he has no plans to quit anytime soon, you can be assured that Vince is likely to hatch a few more schemes to promote renewable energy as he works his way to becoming part of the big seven.
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