Blow to cheaper Western Isles electricity scheme after supplier closes down
3 December 2016
Plans to provide cheaper electricity to Western Isles families have been dealt a serious blow after the supplier went out business.
Hebrides Energy community supply company intended to offer islanders savings up to around £350 on energy bills but its commercial partner, GB Energy, suddenly ceased operations this week.
The fledging supplier said the decision was due to difficulties over rising wholesale energy costs.
Hebrides Energy previously said it planned to introduce the special before the end of this year.
A spokesman for the board of Hebrides Energy said it pulled the plug on the launch after recent “concerns over the operations and financial viability of GB Energy.”
“The board is considering its options,” he added.
Hebrides Energy has not lost any “significant sum” of money over the GB Energy crash, councillors will be told.
Comhairle nan Eilean Siar set up the local independent electricity supply company which also has representation from Hebrides Housing Partnership, Tighean Innse Gall housing agency, the Stornoway Trust and Community Energy Scotland.
A report of the eleventh hour collapse of the venture will be presented to councillors next week.
The comhairle is expected to back a search for a new supplier though the level of savings may not be as great.
Hebrides Energy struck a deal with GB Energy for a special rate to island families offering “access to some of the best energy deals available.”
The three year old Preston headquartered supplier was new to the energy market and to the Western Isles. It also lacked experience on this kind of joint venture project.
Energy regulator, Ofgem, has now appointed Co-
GB Energy’s managing director, Luke Watson, said: “Due to swift and significant increases in energy prices over recent months and, as a small supplier our inability to forward buy energy to allow us to access the best possible wholesale prices, means that the position of the business has become untenable.”
The white label partnership with a commercial operator was to allow Hebrides Energy to gain valuable experience of operating in the energy market.
Eventually, it intends to secure its own licence and look at opportunities to make
savings by directly investing in island-
In the longer term, Hebrides Energy plans to negotiate agreements with a raft of community wind turbine operators and the commercial operator of the planned large Stornoway wind farm to buy and resell electricity generated on local moors to island customers.