Outer Hebrides Energy Supply Company (ESCO)

 

Project Lead: Comhairle nan Eilean Siar

Partners: N/A

Award Amount: £73,414

Status: Complete (August 2015)

Area: Outer Hebrides

This project was focused on developing the potential for the Outer Hebrides community to purchase a proportion of energy generation from local renewable energy generators (at the time, mostly wind energy). The aim was to create a community owned Energy Supply Company (ESCO) to retail this electricity to the local market at a competitive price. By making a connection between local generation and local consumption, an Outer Hebrides ESCO was envisioned as enabling the utilisation of renewable energy to directly reduce fuel poverty levels. Simultaneously, it was anticipated that this would allow for an exploration of the potential for innovative solutions in local energy management, supply and storage, to reduce grid connection costs and the carbon footprint of the Outer Hebrides. CARES IIF funding was to be used to support three phases of project development: firstly, to identify the most suitable route to market for the ESCO, including identifying any elements of market interface that would need private sector involvement; secondly, to consult with stakeholders (including potential large scale energy purchasers); and thirdly, to develop a business plan and conduct scenario testing, through support from Business Advisors.

The feasibility study concludes that an ESCO of this nature is viable within the Outer Hebrides, offering both economic and environmental benefits. The recommendation put forwards is for a Joint Venture to be sought with an existing electricity supply company, with the possibility existing for this venture to then evolve into a local, independent energy retailer. The prospect for such a company to then enter the UK electricity/energy service market by 2017-18 is highlighted. However, this recommendation for formation of a Joint Venture is suggested to be made conditional on the electricity industry partner agreeing to: a) provide favourable tariffs to the Outer Hebrides; and b) introduce a high-value skilled workforce operation in the Outer Hebrides. The opportunity for the Joint Venture to transition to an Owner-Operator model is raised as a future evolution.

 

Supporting Documents / Output Report(s)

Outer Hebrides ESCO - Scoping Study