Ripple Energy wind farm?

mgfvvc

I've finally read through the offer document properly. I am not with a "partner" firm. The concern I have is that if I transfer in to a partner firm I don't see any guarantee that I will be able to choose a capped tariff, if fixes are still significantly higher than the cap?

QrizB

mgfvvc said:

I've finally read through the offer document properly. I am not with a "partner" firm. The concern I have is that if I transfer in to a partner firm I don't see any guarantee that I will be able to choose a capped tariff, if fixes are still significantly higher than the cap?

I've just twigged that you started this thread, back in August 2020. I'm surprised you didn't join them for WT1, it seems to be proving quite lucrative (although no-one could then have forecast the current energy price increases).
Why don't you ask Ripple and/or Octopus? I hope that Octopus have an agreement with Ripple that they will always accept Ripple members as customers.

Exiled_Tyke

mgfvvc said:

I've finally read through the offer document properly. I am not with a "partner" firm. The concern I have is that if I transfer in to a partner firm I don't see any guarantee that I will be able to choose a capped tariff, if fixes are still significantly higher than the cap?

Well right now very few people would want to enter into a new fixed rate tariff (unless you are one of the few to be able to take advantage of Octopus Go) (if that's what you mean). If you do mean 'capped' at Ofgem set rates then I would have thought firms such as Octopus and any other big players will have to offer these rates.  

Nobody knows what the situation will be when the latest turbines come on stream but if it prices do not improve very significantly then Ripple will offer a very good deal. So I'd see Ripple as a very good hedge. 

JKenH

Exiled_Tyke said:

mgfvvc said:

I've finally read through the offer document properly. I am not with a "partner" firm. The concern I have is that if I transfer in to a partner firm I don't see any guarantee that I will be able to choose a capped tariff, if fixes are still significantly higher than the cap?

Well right now very few people would want to enter into a new fixed rate tariff (unless you are one of the few to be able to take advantage of Octopus Go) (if that's what you mean). If you do mean 'capped' at Ofgem set rates then I would have thought firms such as Octopus and any other big players will have to offer these rates.  

Nobody knows what the situation will be when the latest turbines come on stream but if it prices do not improve very significantly then Ripple will offer a very good deal. So I'd see Ripple as a very good hedge. 

The last 6 months have shown just how quickly things can change. Ripple 1 has turned out to be a very sensible investment. Well done to those who took part. It could all change again though before Kirk Hill comes on stream. 

Presumably no binding contracts have yet been placed and there are reports of significant inflation in the cost of materials transport and labour involved in wind turbine construction so build costs may go over budget. Some materials may be hard to source so the project may overrun. Wind speeds have been consistently falling as predicted by global warming models so projected capacity factors may be hard to achieve. Much more expansion of onshore (and offshore) wind is envisaged which could lead to price pressure as new larger turbines come online. There is no floor to prices as with CfD contracts. Large scale solar projects may undercut daytime wind prices. I see a lot of commercial risks. 

I am always sceptical when some organisation offers to sell a piece of the action in what is such a sure fire winner. If it is that good a deal why do Ripple not borrow the capital and reap the rewards themselves? 

Yes, I am being negative but I am presuming people want a cross section of opinion. I did in another post a month or two back say that an investment in Ripple looked to me to be more attractive than in a commercial wind farm and I still believe that. I just wouldn’t want people to think there is no risk.

Exiled_Tyke

JKenH said:

Exiled_Tyke said:

mgfvvc said:

I've finally read through the offer document properly. I am not with a "partner" firm. The concern I have is that if I transfer in to a partner firm I don't see any guarantee that I will be able to choose a capped tariff, if fixes are still significantly higher than the cap?

Well right now very few people would want to enter into a new fixed rate tariff (unless you are one of the few to be able to take advantage of Octopus Go) (if that's what you mean). If you do mean 'capped' at Ofgem set rates then I would have thought firms such as Octopus and any other big players will have to offer these rates.  

Nobody knows what the situation will be when the latest turbines come on stream but if it prices do not improve very significantly then Ripple will offer a very good deal. So I'd see Ripple as a very good hedge. 

The last 6 months have shown just how quickly things can change. Ripple 1 has turned out to be a very sensible investment. Well done to those who took part. It could all change again though before Kirk Hill comes on stream. 

Presumably no binding contracts have yet been placed and there are reports of significant inflation in the cost of materials transport and labour involved in wind turbine construction so build costs may go over budget. Some materials may be hard to source so the project may overrun. Wind speeds have been consistently falling as predicted by global warming models so projected capacity factors may be hard to achieve. Much more expansion of onshore (and offshore) wind is envisaged which could lead to price pressure as new larger turbines come online. There is no floor to prices as with CfD contracts. Large scale solar projects may undercut daytime wind prices. I see a lot of commercial risks. 

I am always sceptical when some organisation offers to sell a piece of the action in what is such a sure fire winner. If it is that good a deal why do Ripple not borrow the capital and reap the rewards themselves? 

Yes, I am being negative but I am presuming people want a cross section of opinion. I did in another post a month or two back say that an investment in Ripple looked to me to be more attractive than in a commercial wind farm and I still believe that. I just wouldn’t want people to think there is no risk.

I think this is overly harsh. If you are sceptical of organisations that  offer a piece of the action then I presume you are against all share ownership? Ripple certainly don't suggest the scheme is a 'sure fire winner' and indeed suggest that "Most shareholders invest primarily for the environmental benefit of creating a new source of renewable energy."

None of us here (I guess) are qualified to make recommendations on investments. I certainly would not want to be accused of such.  The point I have made is that compared to other opportunities this is a form of hedge against energy prices.  If energy prices stay high or rise then this scheme if successful offers a form of compensation against our domestic bills. If prices return to lower levels then the investor benefits in the way that all will through lower energy bills.  The benefit of the 'hedge' will then not be required but that's not to say the investment is wasted: it will have still served its purpose. 

The prospectus/offer document does a pretty thorough job of addressing the risks and the effects of these on returns. I would hope that nobody would consider investing without thoroughly reviewing this document first. 

JKenH

Yes, Ripple do list a number of risk factors but in a nebulous sort of way, just like the generic risk assessments that are produced for the purposes of box ticking rather than addressing a potential risk in a manner that is helpful in understanding the probability and/or consequences of that risk occurring and offering solutions as to how that risk will be managed.

For instance: 

Turbine performance: the co-op’s assumptions around electricity generation levels each year are based on independent third party wind assessment, created using onsite wind data collected over two years.

They use calculations using methodologies commonly used by the industry for wind farms of this scale. However, long-term changes to or inherent variability in weather patterns and/ or equipment underperformance may result in lower levels of electricity generation and therefore income.

I realise that Ripple cannot in the share offer produce a treatise on variation in wind speeds experienced over the last 30 years and how these relate to predictions from global warming models but there is a real and probable risk here that wind speed variations could make the difference between profit or loss. No mention is made as to the measures that the wind farm managers have in place to mitigate the impact of such eventuality on the finances of the project. 

Bearing in mind the share offer is aimed at retail investors is the highlighted paragraph above in the offer document sufficient really to alert investors to the risk they are potentially facing? One could probably make similar observations about other risks identified. A commercial investor would have the opportunity to sit down with Ripple and ask what the financial impact would be and how they would manage a prolonged event such as the stilling experienced last year. 

I take your point about hedging which others have also made. 

Edit: the article below highlights the impact low wind speeds have had on other wind farm operators

https://www.cnbc.com/2021/08/12/low-wind-speeds-hurt-profits-at-two-of-europes-major-energy-firms.html

mgfvvc

QrizB said:

mgfvvc said:

I've finally read through the offer document properly. I am not with a "partner" firm. The concern I have is that if I transfer in to a partner firm I don't see any guarantee that I will be able to choose a capped tariff, if fixes are still significantly higher than the cap?

I've just twigged that you started this thread, back in August 2020. I'm surprised you didn't join them for WT1, it seems to be proving quite lucrative (although no-one could then have forecast the current energy price increases).
Why don't you ask Ripple and/or Octopus? I hope that Octopus have an agreement with Ripple that they will always accept Ripple members as customers.

I said in that first post that I didn't have time to seriously investigate it. I probably should have invested, but the WT1 offer came at an awkward time for me when I was preoccupied with family health issues and couldn't really give it the necessary consideration. Also, I asked Ripple for clarification of some details on that offer and got no response, so I was somewhat put off.
You are right I probably should ask them the question, but having had no answer to my previous question I would not expect any better now.

mgfvvc

Exiled_Tyke said:

mgfvvc said:

I've finally read through the offer document properly. I am not with a "partner" firm. The concern I have is that if I transfer in to a partner firm I don't see any guarantee that I will be able to choose a capped tariff, if fixes are still significantly higher than the cap?

Well right now very few people would want to enter into a new fixed rate tariff (unless you are one of the few to be able to take advantage of Octopus Go) (if that's what you mean). If you do mean 'capped' at Ofgem set rates then I would have thought firms such as Octopus and any other big players will have to offer these rates.  

Nobody knows what the situation will be when the latest turbines come on stream but if it prices do not improve very significantly then Ripple will offer a very good deal. So I'd see Ripple as a very good hedge. 

You are right that a new fixed rate deal is unlikely to be good value unless the situation improves considerably. Based on what I have read in the energy board I believe a lot of suppliers have been trying to avoid taking on new customers and/or trying to push people onto expensive fixes. As I would have to transfer to take advantage of the co-op, I am not confident that I would get a competitive rate which undermines the scheme's benefit.

Exiled_Tyke

mgfvvc said:

Exiled_Tyke said:

mgfvvc said:

I've finally read through the offer document properly. I am not with a "partner" firm. The concern I have is that if I transfer in to a partner firm I don't see any guarantee that I will be able to choose a capped tariff, if fixes are still significantly higher than the cap?

Well right now very few people would want to enter into a new fixed rate tariff (unless you are one of the few to be able to take advantage of Octopus Go) (if that's what you mean). If you do mean 'capped' at Ofgem set rates then I would have thought firms such as Octopus and any other big players will have to offer these rates.  

Nobody knows what the situation will be when the latest turbines come on stream but if it prices do not improve very significantly then Ripple will offer a very good deal. So I'd see Ripple as a very good hedge. 

You are right that a new fixed rate deal is unlikely to be good value unless the situation improves considerably. Based on what I have read in the energy board I believe a lot of suppliers have been trying to avoid taking on new customers and/or trying to push people onto expensive fixes. As I would have to transfer to take advantage of the co-op, I am not confident that I would get a competitive rate which undermines the scheme's benefit.

But I can't see a company such as Octopus making a refusal to take a customer on the capped tariff who needs it for the Ripple offer.  I also think that too many fingers will have been burnt for many providers to get overly competitive with their fixed price offers.  Previously they may have been able to buy at agreed prices on forward contracts (but I'm speculating here). If this is the case how many are left with the liquidity and bargaining power to do that now?  A lot may happen in the next 18 months but personally I'm not expecting any great opportunities(/bargains) for consumers. 

Incidentally I'm with Octopus for electricity but had left my gas supply with my previous provider. My gas is on the capped tariff.  Two week's ago I asked Octopus if they would take over the gas for me. There was no hesitation and it was all sorted in five minutes.  If you are eligible for one of the Octopus tariffs which is favourable for you then it's a lot more straightforward. 

mgfvvc

Exiled_Tyke said:

But I can't see a company such as Octopus making a refusal to take a customer on the capped tariff who needs it for the Ripple offer.

The Octopus Energy website won't even show me their rates. That does not give me confidence.