By Scott Wright Deputy Business Editor
A CLYDEBANK-based energy company has clinched a deal to sell a 50 per cent
stake in the business to an English local authority for £18 million.
Warrington Borough Council approved the investment in Together Energy,
alongside a secured loan of £4m for the Scottish firm, at a cabinet meeting
on Monday evening. It will lead to Together becoming an exclusive renewable
energy supplier.
The deal comes after Paul Richards, the former British Gas executive who
set up Together Energy in 2016, revealed in June he had been holding talks
with potential investors to raise around £15 million. That came after
auditors noted in the firm’s accounts for the year ended August 31, 2018,
that its ability to continue as a going concern depended on it obtaining
additional funding, meeting cashflow projections, and the continuing
support of its wholesale trading partner, BP.
Losses spiralled to nearly £7m from £922,546 in tough market conditions,
though Mr Richards vowed the firm was firmly on the road to profitability.
The results came during a period of rapid growth at Together, which has
built a reputation from recruiting staff from challenged backgrounds. The
challenger, which employs 140 staff, now has around 70,000 customers. It
inherited some 33,000 customers late last year when it was named supplier
of last resort for OneSelect, the failed Reading-based energy company.
Warrington has built a reputation as one of the UK’s greenest councils, and
has held a stated policy aim of setting up its own energy company for
several years.
Its investment comes amid plans by the Scottish Government to establish a
public, not-for-profit energy company by the end of the current parliament
in 2021.
Warrington invested £59m in two solar farm projects in Yorkshire, in Hull
and York, in 2018 in a bid to cut its own energy costs. It is understood
that the solar farms, currently under development, will in the long term
supply the electricity for Together Energy’s customers, with the council
also intending to sell energy to the open market to generate revenue.
Between them the two solar farms are expected to generate 60MW (megawatts)
of renewable electricity.
In a cabinet meeting agenda paper, available on the council’s website, the
authority sets out a range of benefits to its acquisition of a 50% stake in
the Scottish firm. It notes the investment in Together will help it to
supply 100% green energy to council residents, and to relieve fuel poverty
in Warrington, which affects around 10,000 in the Cheshire town.
It also highlights job opportunities flowing from the deal, with 20 roles
to be created with the opening by Together of an office in Warrington.
The council states in the paper: “Together Energy have a strong social
focus and have programmes and training schemes to get the long-term
unemployed or those with limited qualifications back into the workplace.
This policy will be implemented in Warrington helping to get the unemployed
and low skilled back into employment.”
The deal is expected to be rubber-stamped following a risk workshop meeting
of the council on Monday.
Further to the deal, the board of Together Energy will comprise of eight
people, led by Mr Richards. These will include a chairman, three executive
directors and two non-executives, plus two positions occupied by the
council. Donald McIntyre, the former Lloyds and Rangers director who joined
Together as commercial director in December, has left the business.
Mr Richards, who will hold 50% of Together, said: “We are delighted and
welcome the cabinet’s approval. The team at Warrington Borough Council is
both visionary and ambitious in its approach to sustainable energy and
helping to future proof community services through its carefully planned
investments. This vision is shared by all of us within Together Energy.”
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