Ripple Energy wind farm?

JKenH

QrizB said:

Reed_Richards said:

So if there were 5000 members and they each paid the same amount they would each own 500 Watts?

Yes, that's the idea.

But there is some limit based on your annual usage which is where my figure of 940 W would be taken into account?  

Per the offer document, Graig Fatha was sold on the basiis that each watt of turbine would generate 2.67 kwh/yr. If your annual consumption is around 8200kWh/yr, you could match it by buying 3070 watts of the turbine.

The cap we discussed earlier was that Ripple limited investors to buying enough watts to match 120% of their typical annual consumption. In your case that would be 3680 watts.

Kirk Hill used a similar approach although the numbers were different (working out as each watt generating 3.2 kWh/yr).

I've also noticed that Graig Fatha was a more conservative estimate; 2.67 kWh/yr was a P75 estimate, while 3.2 kWh/yr for Kirk Hill is a P50 estimate. Graig Fatha is 75% likely to outperform the proposal; Kirk Hill, only 50%.

That’s helpful to enable a comparison with roof top solar. I suppose we should look at the 50% estimate, (presumably PVGIS figures would be based on that). South facing solar arrays aim to produce around 1kWh/watt of panel so wind is more efficient. It costs more per watt of installed capacity but generates more.  The cost of Graig Fatha was £1.76 per watt installed compared with around £1 per watt for solar at the time the offer was proposed. I couldn’t find a P50 generation estimate for Graig Fatha so can’t do a comparison for Graig Fatha but will look at Kirk Hill. 

Kirk Hill works out at £1.85/watt installed including Ripple’s arrangement fee. If it meets the P50 estimate exactly then 1 watt will generate 3.2 kWh per year. The installation cost to generate an anticipated 1kWh is therefore £0.58 compared with in the region of £1.20/watt currently for a 4kw roof top solar array. i.e. Kirk Hill is around half the installation cost per kWh generated compared to roof stop solar.

Whether a Ripple wind farm or solar works better than solar for the individual will depend on how much electricity one can self consume. If you are paying 30p a unit for electricity and use half/export half your output at 5p then each kWh generated will be worth £0.175 (17.5p). If the Ripple investment is only half the cost per kWh then the return needs to be only £0.0875 (8.75p) to give the same return on investment. 

Please note I do these exercises to keep my ageing brain active. I sometimes make mistakes so I apologise in advance if any have crept in. 

paul991

i had the view hedge  your bets, though i can see ripple being better if you think you might move soon

QrizB

I've had a quick look at the output predictions:

Graig Fatha (offer doc, page 35)

• P50 - 7370 MWh/yr (2.95 kWh/yr/watt, at £1.76/watt equivalent to 60p/kWh/yr)
  
• P75 - 6681 MWh/yr (2.67 kWh/yr/watt, 66p/kWh/yr)
  
• P90 - 6083 MWh/yr (2.43 kWh/yr,watt, 72p/kWh/yr)

Kirk Hill (offer doc, page 44 & 50)

• P50 - 60226 MWh/yr (3.20 kWh/yr/watt, at £1.85/watt equivalent to 58p/kWh/yr)
  
• P75 - not quoted
  
• P90 - 53800 MWh/yr (2.86 kWh/yr/watt, 65p/kWh/yr)

70sbudgie

I am considering Ripple's offer to reserve a spot on the next project and this caught my eye:
I understand that Ripple's next project may be a solar farm and that I can decide whether to join the next project when the share offer opens.

Exiled_Tyke

JKenH said:

Whether a Ripple wind farm or solar works better than solar for the individual will depend on how much electricity one can self consume. If you are paying 30p a unit for electricity and use half/export half your output at 5p then each kWh generated will be worth £0.175 (17.5p). If the Ripple investment is only half the cost per kWh then the return needs to be only £0.0875 (8.75p) to give the same return on investment. 

You are not comparing like-with-like here.  Solar should offer savings in line with what you've stated. However Ripple doesn't offer a full saving on each kWh produced. Each kWh is rewarded at the wholesale price less operational costs. I think currently estimated at about 4 1/2 p for the long term. Although a lot more in the short term. So per calculations it would appear that Ripple is roughly the double the cost for a similar return? 

JKenH

Exiled_Tyke said:

JKenH said:

Whether a Ripple wind farm or solar works better than solar for the individual will depend on how much electricity one can self consume. If you are paying 30p a unit for electricity and use half/export half your output at 5p then each kWh generated will be worth £0.175 (17.5p). If the Ripple investment is only half the cost per kWh then the return needs to be only £0.0875 (8.75p) to give the same return on investment. 

You are not comparing like-with-like here.  Solar should offer savings in line with what you've stated. However Ripple doesn't offer a full saving on each kWh produced. Each kWh is rewarded at the wholesale price less operational costs. I think currently estimated at about 4 1/2 p for the long term. Although a lot more in the short term. So per calculations it would appear that Ripple is roughly the double the cost for a similar return? 

Comparisons, by their nature, never can be like-with-like but they can be helpful to compare two alternative investments. Here, we are looking at the return on investment for two RE technologies that can effectively reduce electricity bills and save CO2. There the similarities end. In one you own physical assets which will be yours after the investment period being considered ends and in the other a piece of paper giving you the right to be repaid back a certain amount of your investment each year plus a (variable) element of profit. Therefore you are correct - they are not like for like. Neither though is comparing an investment in RE with what you would get from a building society or an investment in shares.

Before making investments though we generally like to look at what else we could do with our money and what return that might bring. I thought therefore a consideration of the return one might get from these two alternative approaches to RE might be useful even if they are not like-with-like. 

Turning to the conclusion of your calculation, I would agree Ripple investment  is double the cost, if the return is only 4.5p, but currently wholesale rates are higher than what the prospectus was based on and some considering a Ripple may believe they may stay quite high for a while. Others might think they will fall. The purpose of the exercise was to show what the return would need to be to make it competitive with the current cost of a new solar installation and that is about 8.5p - as you point out almost double the estimated rate of 4.5p.

Hopefully, we can agree we are both right.

70sbudgie

I installed solar panels on my house (east and west facing) in January 2021. At the time, the pay back was about 13 years - about the same as for Kirk Hill (but 12 months earlier), I worked it out as about 6% annual return. (My figures were not as comprehensive nor accurate as Ripple's) After the first year, I did a rough and ready calculation and found that I was pretty much on track with my investment. This year, however, will be different - not only has the cost of electricity that I buy doubled, the price I sell for has increased by over 30%. This is all good as it will reduce the payback duration of my solar panels. But I won't know by how much, as I won't do the calculations again until I have the second year of data. I am happy that it will be an improvement on my original calculations and I was happy enough with those to make the investment.

I am pretty much taking the same approach with Ripple, keeping an eye on my investment, but not worrying too much about the extent to which the returns exceed the original predictions. Even if the return does go back to the figures used in the financial modelling, I was happy enough with those to invest. The years of bonus will have reduced the payback and I will then have additional years of just profit, or a "float" to be able to accomodate some years of worse returns.  

I also strongly believe in diversity of energy sources, so the opportunity to invest in wind that Ripple provides, goes nicely with the solar generation I have also invested in.

chqshaitan

The other consideration when comparing solar and ripple from a energy cost saving perspective, is that with any energy you use from the grid, there are various taxes and levy's, but this is not the case with solar, as you are using the energy at source.

I will be considering installing solar next year, when I have completed my ripple investment

Exiled_Tyke

Ripple have now sent out a useful update including a summary of the capital structure and the terms for the loan proportion of the capital.  It's pretty much what we worked out in our discussion so no unpleasant surprises!

https://blog.rippleenergy.com/environment/kirk-hill-wind-farm-share-offer-now-closed/

chqshaitan

I have just spoken to ripple regarding any expected duration of the finance agreement but due to it being based on the returns, he was unable to provide me anything specific. I then asked if he had any rough idea and the answer was no, but he is confident that the finance will be settled prior to the 25 year anniversary.

So at some point, we can expect to get about a 30% increase in our 'profit', just no idea as to when that will occur.