Power Circle's Story
Power Circle has been set up as a social energy service company (ESCO) to help people in local communities cut their energy costs at the same time as they contribute to climate change targets. The rapidly escalating costs of energy are a challenge for both social landlords and their tenants. With one in four of the UK population in fuel poverty, those on restricted income are at particular risk of not being able to meet their fuel bills. At the same time, local authorities have their own carbon reduction targets and are looking for ways to reduce the cost of energy in both their housing stock and Council-owned properties.
The team has worked with private and public partners on domestic and commercial projects as well as utility-scale solar/battery developments. Examples of project types include smart electric heating and smart solar and storage; on-site generation, storage with grid services for public sector and commercial buildings; implementation of solar PV and thermal, biomass boilers, ground source and air source heat pumps.
The process typically starts by exploring a new project opportunity with a local council or social landlord for example. They discuss and agree on how best to scope, progress, structure and fund a project to maximise value for the local council or social landlord. They can project manage various stages or the entire process if required. Funding options include self-finance, project finance, recourse finance and also grant financing in some cases. As a social enterprise, Power Circle enables its partners to play a strategic role in the project development as shared owners of the new project. Power Circle's social ESCO model also provides opportunities for a more cost-effective approach to energy management.
Some of the benefits of this model include:
Avoiding upfront costs and providing a share of the gains through our social structure;
Cutting energy bills and carbon emissions for end-user customers;
Avoiding or decreasing District Network Operator (DNO) upgrade costs;
Helping meet regulatory or internal carbon, EPC or energy targets;
Contributing to resource efficiency, to a circular energy economy and local air quality.
Useful Learnings from Power Circle
Building trust is a really important element of this model. Long-term customer relationships are needed in an industry where the level of trust in traditional energy companies has not been as high as it could be.
Projects look and feel very different depending on the asset owner's appetite for risk – their ability or desire to take on the financial and managerial risks involved. There is no 'best structure' and what's best is a structure and funding consistent with their risk appetite.
Solutions that work for low-income sections of the community is very important so that they are not left behind.
Small energy users are stronger together and have more economic clout through a social ESCO of this sort.
Power Circle's Metrics
Meeting regulatory, EPC or low carbon emissions/energy targets.
Cutting energy bills for end-users.
Contributing to local air quality.
Innovation in circular energy economy practices.
