Gladstone Commercial Corporation

annual report
& accounts

• 2019 •

Climate change is our responsibility

Let’s keep the world our home

Annual Report & 
Accounts 2019

Contents

Strategic Report

Why we exist: Let’s keep the world our home 

How we achieve our purpose & CSR:  
Powering a cleaner, greener future together 

What we do to achieve our purpose & CSR:  
Empowering you to use, share, generate and store clean energy 

Governance Report

Board of Directors 

Governance & Directors’ Report 

Audit & Risk Report 

Nomination & Remuneration Report 

Independent Auditors’ Report 

Financial Statements

Consolidated Statement of Comprehensive Income 

Consolidated Statement of Financial Position 

Parent Company Statement of Financial Position 

Consolidated Statement of Changes in Equity 

Parent Company Statement of Changes in Equity 

Consolidated Statement of Cash Flows 

Parent Company Statement of Cash Flows 

Notes to the Financial Statements 

 4

 16

 34

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  75

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Contents

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Strategic Report

Why we exist:  
Let’s keep the world our home

Our purpose and manifesto 

2019 achievements

Chairman’s statement

The business model

 5

 6

 . . 8

 10 

Ohief Executive Officer’s review. . . . . . . . . . . . .13 

How we achieve our purpose & CSR : 
Powering a cleaner, greener future together

Strategic review 

Key performance indicators 

Operating review 

Key risks 

Chief Financial Officer’s review 

 18

 22

 25

 28

 32

What we do to achieve our purpose & CSR:  
Empowering you to use, share, generate and store clean energy

A regenerative business 

Our environmental impact 

Our social impact 

 36

 38

 50

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Good Energy Annual Report 2019
Good Energy Annual Report 2019

Good Energy Annual Report 2019 
Why we exist: 
Let’s keep the 
world our home

Foreword from our CEO and Founder, Juliet Davenport

2019 marked 20 years since I founded Good Energy, with the explicit purpose of fighting climate change. 
It was also the year that the rest of the world stood up and joined the fight. Greta Thunberg’s global 
climate strike movement, David Attenborough addressing climate change on BBC prime time, the UK 
government declaring a climate emergency and setting a net zero target. Our purpose of tackling 
climate change became well and truly mainstream. But the challenge of how we deliver it remains.

The clean energy grid we need to tackle climate change will be distributive. People generating, using, 
sharing and storing their own power. In 2019 we accelerated our investment in clean technologies to 
help change the way people engage with energy – from how they use it in the home to how they travel. 
We have invested in systems that will enable us to serve more customers, with more services, at a  
lower cost.

To empower more households and businesses to choose to use genuinely renewable power today, we 
had success in 2019 in calling for more transparency in the energy market. We were given the highest 
green rating from Which? magazine and saw Ofgem acknowledge that they intend to address the 
problem of consumers being misled by greenwashed tariffs.

Informing all of this is our new manifesto. This is a bold expression of who we are and our purpose, for a 
decade in which the world must achieve unprecedented cuts to carbon emissions. 

2020 will be a crucial year. While in the UK a net zero goal has been set, how the country will achieve it is 
the real test. Of course, since that goal was set, societies have undergone dramatic changes to counter the 
COVID-19 pandemic. National lockdowns have caused carbon emissions to drop. But temporary reductions 
are not enough. Global governments must prioritise green economic recovery that enables sustained 
emissions reductions and cleaner, greener societies.  

Last year I spoke at the United Nations Conference of Parties (COP25) of Good Energy’s role in pushing 
the perceived limits of what is possible — proving that 100% renewable can be done. COP26 is due to take 
place in Glasgow, where the world’s governments will assess progress on the Paris agreement. As the UK’s 
climate action takes centre place on the global stage, we will continue to prove that 100% renewable is 
possible and necessary. Our time is now.

This 2019 Annual Report and Accounts sums up a fantastic year for Good Energy. Together with our 
investors, people, customers and generators, we are continuing to help tackle the climate crisis.

Juliet Davenport

Founder and Chief Executive Officer

Our purpose

climate change is our responsibility. 
let’s keep the world our home.

Our manifesto 

We believe that everyone deserves a future on our home planet. 
Swimming in our rivers, walking in the forest or simply breathing 
clean air should always be an option; for us, for our children and for 
their children.

We know that to keep the planet our home we have to get to 100% 
renewable energy. So that’s what we are working towards every 
single day.

We exist to give you the ability to generate your own power, not 
just buy ours. No one owns the sunshine, the wind or the rain, so 
let’s share it.

 Our goal is to turn every home and business into its own clean 
power station. Get your clean energy from families and businesses 
in your local community. Power generated by people like you, for 
people like you.

We believe that we all have our part to play. We do ours not only by 
empowering you to buy and share clean energy but also by investing 
in clean technologies.

We must be bold, stand up and take action to tackle climate 
change. We are more powerful together with our customers, 
generators, shareholders, partners and people.

We invite you to stand up with us.

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Good Energy Annual Report 2019

Strategic report

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5

Good Energy Annual Report 2019Strategic ReportGovernance ReportFinancial StatementsStrategic Report2019 achievements

Putting the business on a firm footing for the future

Investment 
in ZapMap, a 
catalyst for the 
energy sharing 
economy and at 
the forefront of EV 
market growth

Customer 
numbers 
increased 
overall with 
business 
supply 
growing 33%  

One point 
EV charging 
proposition 
for businesses 
launched

Commenced 
next generation 
Smart Meter 
roll out

Sold 
Brynwhilach 
solar farm into 
community 
ownership  
but continuing 
to be the PPA 
offtaker for 
the site

Continued 
reduction in 
underlying debt

Juliet 
Davenport 
spoke at 
COP25 of 
Good Energy’s 
role in pushing 
the perceived 
limits of what 
is possible

Green 
credentials 
recognised  
by OFGEM

Investment in 
market-leading 
customer service 
platform, Kraken, 
to enable growth 
in domestic supply

32.5% growth 
in domestic FIT 
registrations 
following surge 
in registrations 
before the 
scheme closure in 
Q1 2019

Awarded highest 
green rating by 
Which? in their 
investigation into 
green energy 
tariffs

HAVEN trial 
completed 
revealing battery 
storage savings

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Good Energy Annual Report 2019Strategic ReportGovernance ReportFinancial StatementsStrategic ReportChairman’s statement

In 2019, we had another year of good performance 
as we continued to deliver against our stated strategy 
and shift to the energy world of the future. We 
continue to demonstrate our resilience to changing 
and difficult markets and remain well positioned 
both financially and operationally. We made tangible 
investments in our future strategy, progressing in our 
transition to providing technology enabled energy 
services for the generation, supply and sharing of 
100% renewable clean power for all. 

Our Market: opportunities and challenges

Looking back, we saw a significant amount of 
uncertainty: Brexit negotiations, parliamentary inertia 
and a sense of constant macroeconomic volatility 
dominated the landscape. Recent events have only 
served to heighten this. Following genuine signs of an 
economic resurgence in 2020, the ongoing impact of 
coronavirus (COVID – 19) has become a global issue.

We are witnessing unprecedented actions from both 
governments and businesses: The Bank of England 
slashing interest rates, tangible impacts on global 
supply chains and many countries in lockdown from 
March 2020. Whilst these remain highly uncertain 
times, we believe that our financial and operational 
resilience is allowing us to react to these market 
challenges. We remain cash generative and have a 
good cash balance. Despite the pandemic, energy 
remains an essential service in homes across the 
country. We have a well-diversified customer base 
across a range of demographics, who have all 
actively chosen to support our purpose in providing 
100% renewable clean power for all.

Operationally, our UK focused business is well placed 
to respond. The implementation of our new customer 
technology platform is progressing as planned, with 
a large proportion of customers already operational 
on the new platform. This provides us with further 
flexibility to operate and deliver all our products and 
services to customers. 

The health and wellbeing of our employees remains 
of critical importance. We have a strong business 
continuity process in place to ensure we can 
safeguard against future developments. Whilst the 
potential impact of the virus remains unknown, we 
remain confident in our capabilities as a business 

“In 2019, we had another year 
of good performance as we 
continued to deliver against our 
stated strategy and shift to the 
energy world of the future. ”

to protect our employees and continue to deliver 
products and services for our customers. 

We have seen no significant financial impact from the 
coronavirus (COVID-19) outbreak to date. This is due 
to a strong starting cash position and cash collections 
in Q1 2020; the offset of demand impacts between 
Domestic and Commercial supply; mitigations in 
place for potential cashflow issues; and successful 
business continuity plans. However, we continue 
to monitor the situation closely while planning for 
a range of scenarios including changes to current 
government guidance or policy. I believe that as 
a business our financial and operational resilience 
provides us with the flexibility to handle significant 
market volatility. We have a good cash position, a 
high proportion of our customers paying by Direct 
Debit and an operating model which can handle 
remote working.

Strategic developments

As a Board, a key area of focus is to create and 
deliver a strategy to navigate the many challenges 
and opportunities the business faces. We have 
to ensure that the business is well positioned to 
capitalise on these growth opportunities – both now 
and in a way that is sustainable for the long-term.

As the energy market evolves, so do we. We have 
been actively updating our business model to position 
ourselves to prosper in the developing energy-as-
a-service space. Decentralisation, digital products 
and data analytics will help us thrive and deliver this 
new service model to our customers. We continue 
to invest across the business to make this transition a 
reality. We remain focused on technology, strategic 
partnerships and our people. Our investments in 
both Kraken and Zap-Map allow us to have the 
technological capabilities to play in the right markets 
and deliver our vision of a zero-carbon future. We will 
ensure that these decisions are taken in the context 
of the evolving situation regarding COVID-19.

Board update

In February 2019 Nemone Wynn-Evans joined the 
Board as a Non-Executive and has taken on the 
role of Chair of Audit and Risk Committee. Nemone 
has extensive experience across the financial 
services sectors and has listed plc and PRA, FCA/ 
FSA regulated experience, having acted as finance 
director on the main board of a stock exchange.

Nemone is also a Fellow of the Chartered Institute 
of Securities and Investments. Nemone’s experience 
continues to be an asset to the group as we continue 
to reshape the company, leading the shift from 
supplying to sharing energy.

In January 2020, Rupert Sanderson was appointed 
Chief Financial Officer. Rupert joined Good Energy in 
February 2017 and was appointed Finance Director 

in January 2018, becoming responsible for finance, 
trading, legal and investor relations. His previous roles 
include senior financial and commercial positions at 
Centrica, British Gas, Serco and Avis Europe. Rupert 
began his career as an accountant for PwC and is 
a Fellow of the Institute of Chartered Accountants in 
England and Wales.

We are proud that we continue to live our values as 
a company and our board composition has an equal 
representation of men and women. Diversity and 
inclusivity are principles which we are passionate 
about and continue to promote throughout the 
company. We now have a Board in place to guide 
and oversee the company to meet its strategic 
objective and goals. 

Dividend 

Alongside our ongoing investments, we aim to  
deliver a progressive dividend policy. The policy has 
the objective of increasing the dividend over time as 
profitability grows to provide an appropriate return  
to shareholders. We remain mindful of maintaining 
and balancing the ability to invest in long-term 
growth opportunities.

Despite a good performance in 2019 and our 
confidence in the ongoing business, the Board has 
recommended deferring the full year dividend 
considering the ongoing COVID-19 pandemic and 
prudent cashflow management. The operation of  
the Good Energy scrip dividend scheme whilst  
still operational, will also be deferred alongside  
the dividend. The Board will review this position 
following the publication of our interim results in 
September 2020.

Looking ahead

In 2020 we remain confident in our ability to operate 
in our chosen markets. We expect growth to carry 
on being driven by business volumes. Continued 
digital investment will fuel customer propositions, 
supported by a cash generative business model. We 
aim to realise a return on our investments made to 
date, while taking advantage of further strategic 
and commercial growth opportunities. We will 
make further investments across the business as we 
continue our evolution as an integrated clean energy 
supplier, building on our long and successful history in 
this market.

Will Whitehorn

Chairman

3 June 2020

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Good Energy Annual Report 2019Strategic ReportGovernance ReportFinancial StatementsStrategic Report 
The business model – energy as a service

Energy 
supply

Sharing energy

Homes

Energy as 
a service

Businesses

Products  
& services

Future energy  
services

Zero carbon 
future

Decentralisation

Digitalisation

Data analytics

Decarbonisation

Regenerative
Provide energy that doesn’t 
contribute to - and works to 
- combat climate change

Health

Income

Gender equality

Education

Energy

Voice

Jobs

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Good Energy Annual Report 2019Strategic ReportGovernance ReportFinancial StatementsStrategic ReportChief Executive Officer’s review

providers. In 2019, we received recognition that 
the way in which our model supports renewable 
generation is different from the vast majority of 
suppliers. Ofgem granted us permanent derogation 
from the price cap on standard variable tariffs, 
recognising that our customers choose to be on 
this tariff which enables us to provide a high level 
of support for renewable generation. Additionally, 
Which? magazine gave us the highest green rating 
in their 2019 investigation into green energy tariffs.

Our purpose remains to power the choice of a 
cleaner, greener future together by helping people 
to be part of the solution to the climate crisis. This is 
at the core of who we are. And it remains central to 
our strategy today and into the future.

Our market and positioning

Our addressable markets in both the domestic and 
business markets continue to grow. We have seen 
a secular shift in customer demand following a 
growing societal awareness. This focus has not been 
limited to households, but businesses and financial 
institutions as well. BlackRock, Goldman Sachs and 
Microsoft have all recently released bold visions 
for the future focused on combatting the climate 
emergency. Businesses recognise that they need to 
provide solutions for their own customers and staff. 
Demand for green propositions is now firmly part of 
the mainstream conversation. 

In 2018 and 2019 we have successfully put Good 
Energy on a new trajectory. Embracing the potential 
of the business sector, as well as focusing on 
generating and managing power behind the meter; 
sharing power rather than supplying. We believe we 
have found a niche where we can utilise the expertise 
across our business effectively and compete in the 
ever-changing energy market.

Twenty years ago, we launched net zero electricity 
to enable people to be part of the solution to climate 
change. Over the next twenty, we will continue to 
support the transformation of the electricity market 
to 100% renewable. We will also work to transform 
the heat and transport markets, too. In doing so, 
we’re expressing our purpose of taking responsibility 
for addressing the climate emergency and protecting 
our planet.

Our objective

Overall, our aim is to support the move to a 
renewable future. Our long-term goal is to support 
Good Energy customers to have a zero carbon 
footprint in electricity, heat and transport as part of 
the transition to a zero carbon Britain. In 2020, our 
focus is on building the platform to allow customers 
to start a journey in electricity, heat and transport 
towards reaching zero emissions. Genuinely smart 
tariffs and products, electric vehicle (EV) propositions 
and continued supply backed by 100% renewable 
electricity and carbon neutral gas. 

Our opportunity in a decentralising market

When the Group was founded, 98% of the UK’s power 
was from non-renewables and customers had far less 
choice than they do today about where their energy 
came from. Today, 35-40% of the national fuel mix is 
now from renewable energy sources. We are proud 
of the part we have played – and continue to play – 
in supporting renewable generation that is making 
the power grid cleaner.

Good Energy continues to supply 100% renewable 
electricity, now from 1,500 different locations across 
the UK. We are also one of the largest Feed-In Tariff 

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Good Energy Annual Report 2019

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Good Energy Annual Report 2019Strategic ReportGovernance ReportFinancial StatementsStrategic ReportOur vision for the clean energy grid of the future

It is our belief that the clean energy grid of the future will no longer be dominated by a few large fossil fuel 
and nuclear based gigawatt generators, but will instead be comprised of millions of households and businesses 
generating, using and sharing clean, renewable power.

These new generators will need energy services to support them – and this shift represents a major 
opportunity for us. We estimate that today there are approximately one million renewable energy generators 
powering the grid. We are unique among UK energy companies in having more generation customers that we 
support with FiT management than supply customers, making us well placed to sell the services that enable 
energy sharing. The key will be to make being a low carbon household or business of the future simple.

Energy as a service – the business model

Our business already has a foothold in the energy sharing future. Evolving our model to enable energy as a 
service manifests in four key themes: decentralisation, digitalisation, data analytics and decarbonisation. 

This shift from the old world of energy generation and supply towards technology enabled energy services 
is already happening and is what will drive the future of our business. Best in class digital technology and 
products, underpinned by real time data analytics will help customers understand and act upon their energy 
needs, allowing us to help them decarbonise their lives.

Our strengths 

Credibility and trust

• 

• 

100% renewable for two decades

People who are experts in their fields, highly engaged with clean energy

Expert partnerships

• 

• 

 Proven understanding of renewables attracts leading partners in the energy sector and beyond

 Research and innovation into clean energy technologies with our project partners

Experienced leadership

• 

Strong leadership team with extensive industry experience

•  Non-management Board of Directors with expertise in brand development, renewables and 

digital platforms.

The future of Good 

Our business model allows us to directly interact with customers throughout the entire value chain. 
From power generation to clean energy use, all the way through to how customers engage with how 
they use and save energy. 

We see our medium-term growth focused on two key areas: (i) the home and (ii) businesses. This is 
underpinned by both the utilisation of 47.5MW of installed renewable capacity, and our access to power 
purchase agreements (PPAs) and export from generators in the future. 

In both home and business, we intend to build a platform for future growth through system investments, 
which will enable us to benefit from scale and drive efficiencies. In the home, this will be realised through 
the investment in the Kraken customer technology platform, while business will enhance its existing 
customer service capabilities. 

This platform will allow us to expand the customer proposition through improved products and services. 
We have a clear roadmap for future energy services, ranging from expanding the number of business 
customers the Group supplies gas to, to battery storage and electric vehicle (EV) opportunities including 
leveraging our investment in Zap-Map. We will invest in the right systems, technology and customer service 
levels to benefit all our customers and drive growth.

Juliet Davenport

Founder and Chief Executive Officer

3 June 2020

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Good Energy Annual Report 2019Strategic ReportGovernance ReportFinancial StatementsStrategic Report 
 
 
How we achieve 
our purpose & 
CSR: Powering a 
cleaner, greener 
future together

16
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Good Energy Annual Report 2019

Strategic report

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Good Energy Annual Report 2019Strategic ReportGovernance ReportFinancial StatementsStrategic ReportFor example, we recently launched an electric 
vehicle (EV) charging solution for businesses, 
One Point. This provides businesses with the 
infrastructure and capability to act as a dedicated EV 
charging destination. Developed following detailed 
market positioning work and existing customer insight, 
we refined the proposition through a soft launch 
before launching a full roll out. We are also working 
closely with Zap-Map to leverage an increasing 
number of propositions and services for both our 
existing and potential customers. 

Alongside further propositions, we continue to invest 
in systems and people within our business teams that 
will support future growth and customer retention. 

Strategic review

Compliance with section 172 of the 
Companies Act 2006 

Section 172 of the Companies Act 2006 requires 
directors to promote the success of the Company 
for the benefit of the members as a whole and in 
doing so have regard to the interests of stakeholders 
including shareholders, clients, employees, regulators 
and the wider society in which it operates. 
Throughout this Strategic Report, we have set out 
how we have engaged with our key stakeholders and 
how the Board have considered their interests during 
the year when making strategic decisions. 

Strategic goals to drive growth

Successfully delivering on our business plan will drive 
sustainable growth through: 

• 

• 

• 

Lowering customer acquisition cost 

Implementing the systems and scale to acquire 
customers more effectively

Improving customer retention

•  Complementary new products and services that 

compel customers to stay for longer

• 

Increasing customer lifetime value

•  Drive greater value from the Group’s customers 
through becoming more efficient and selling 
more products and services. 

Achieving these goals will provide clear benefits for 
our customers. Our aim is to create more compelling 
propositions geared towards helping people cut their 
carbon emissions. These propositions will simplify 
customers’ lives and meet their needs.

Investing for growth 

Our strengths

Our 100% renewable status, over the past twenty 
years, gives us credibility with customers and the 
experience and knowledge to attract leading 
partners in the energy sector. We have developed 
a proven expertise and an understanding of 
the renewable energy and clean technology 
markets underpinned by partnerships with  
like-minded companies. 

Our people are experts in their field and have high 
levels of engagement. This has been fundamental 
to helping us build a strong reputation over time. 
Leveraging this expertise, working in partnerships 
and focusing on innovative technology is at the 
heart of what we have always done as a business. 
We continue to develop research into clean energy 
technologies, and work in close partnerships to 
deliver these innovative products and services. 

Recent projects with Octopus Energy, Ørsted and 
Zap-Map are evidence of our continued progress 
in our markets.

To achieve our strategic goals, we will accelerate 
investment in products and services across several 
key strands. These will cover both our domestic and 
business customers as well as having the appropriate 
capital structures to achieve scalable growth. 

Transformation through technology: Kraken platform 
investment

Putting our expansion plans into action requires a step 
change in performance: combining automation, case 
management and technology to support our business 
processes. Our investment in a proven customer 
services technology platform and operating model 
with Kraken Technologies Ltd., part of Octopus Group, 
was identified as a required first step to facilitate 
these plans.

This investment, announced last year, is in line 
with our  goal of lowering customer acquisition 
cost, improving customer retention and increasing 
overall customer lifetime value through an improved 
offering of products and services. This platform will 
enable significant future growth potential in our 
domestic business. 

Total forecast investment of £4m will be split 
approximately equally between cash and non-cash 
elements. Operating cost savings will be realised 
through a significant reduction in headcount and 
operating cost efficiencies.  They are expected to 
achieve payback of the forecast investment within 
18 months of the Q2 2020 full implementation.

The write down of existing systems and the cash 
investment into implementation and transition will be 
taken across 2019 and H1 2020. Transformation costs 
of £865k were incurred in 2019. 

Expected efficiency savings will be reinvested in 
both price and further proposition development and 
roll-out. This will enhance existing products, services 
and competitiveness. The new platform will provide 
significant scalability and flexibility. It will enable 
digital and clean technology innovation of significant 
benefit to customers.

Home

Our addressable market in domestic supply continues 
to grow in line with the societal shift towards climate 
action. Around half of the UK’s twenty-five million 
households feel climate change is important. These 
households with ‘good intentions’ to reduce emissions 
account for roughly 25% of our addressable market, 
providing a significant growth opportunity. 

However, the domestic market remains highly 
price competitive, reflecting the ongoing energy 

price sensitivity across the wider economy. We 
have also seen substantial market volatility and 
since the start of 2018, at least 18 companies 
have exited the market. On top of this, there has 
been a shift in politics, policies and society as the 
climate crisis begins to play a larger role in everyday 
decision making.

Our new customer services technology platform will 
allow us to improve our service; decrease customer 
acquisition costs through being better able to take on 
customers at scale; and to realise expected operating 
efficiencies through a lower cost to serve. These 
savings will allow the Group to reinvest in customer 
propositions – making tariffs more competitive and 
improving customer retention over the medium term. 

To continue improving customer retention, we also 
plan to provide a suite of low carbon home services; 
the market for which is anticipated to grow to over 
£5 billion by 2023. Our propositions will focus on 
energy management, control, and connectivity in 
line with our addressable market and customer 
demand. These will include the roll out of smart 
metering (with the latest SMETS2 technology) and 
in-home devices such as smart energy monitors 
and thermostats. We are already trialling smart 
energy monitors with a small number of customers 
and will begin a larger rollout throughout 2020.  

Our strategy is clear: we will reduce our cost to serve 
through improved customer service systems. We are 
developing new propositions with existing customers 
and will acquire new customers with a lower cost 
to serve and acquisition cost, through an improved 
bundle of propositions. 

Business

We see a significant opportunity to expand with 
mid-market industrial and commercials (I&Cs). 
Corporations are becoming increasingly aware 
of the need to power their operations sustainably. 
This grows our addressable market, expanding the 
number of larger electricity supply customers and 
extending into gas. We will also continue targetting 
consumer-facing brands in the leisure, tourism, arts, 
property and services sectors. 

In 2019, business supply outstripped domestic 
supply numbers for the first time. There is an 
expanding opportunity to build our business 
proposition while maintaining healthy margins, 
with a substantially lower acquisition cost and 
better retention rate than the domestic supply base.

We have a pipeline of planned propositions to 
enhance relationships with our business customers 
ranging from supply to carbon reduction services, to 
help businesses understand their energy usage and 
provide benefits for their employees and customers.

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Good Energy Annual Report 2019Strategic ReportGovernance ReportFinancial StatementsStrategic ReportOur EV investment in focus: Zap-Map 

In Zap-Map (ZAP), we have invested in the UK’s 
leading electric vehicle data platform. This creates 
huge opportunities to launch products and services 
in the crucial area of zero-emission transport – and 
is also a catalyst for the sharing economy. 

ZAP is the go-to app for Britain’s 280,000 EV 
drivers, used for planning routes, identifying charge 
points, checking their availability and sharing 
power. With close to 250,000 app downloads 
and more than  90,000 registered users, ZAP has 
a significant user base within the fully electric EV 
market. Both the number of EV drivers in the ZAP 
community and the number of charge points in 
its network have been increasing rapidly, which 
enhances the breadth and quality of the available 
data. By actively logging the status and availability 
of the public charging network, ZAP provides 
crucial insights on individual users charging 
experience and requirements.

Leveraging the UK’s leading EV platform

With the Government consulting on pulling the 
sales ban on new diesel, petrol and hybrid vehicles 
back five years to 2035, the growth potential for 
the UK EV market is compelling. It is forecast to 
grow at an accelerated rate with more than 1 
million EVs on UK roads forecast by 2025. This is 
driven by factors including:

• 

• 

• 

• 

Subsidies and exemptions for EV purchases 
and charging

 Road tax exemption

 0% Benefit in Kind tax rate for EV  
company cars

 An expanding number of new models on 
the market.

Charge point availability is also a significant 
influence. In May 2019 the number of EV charging 
locations in the UK overtook the number of petrol 
stations in the UK; a key milestone in diminishing 
range anxiety for current and future EV drivers.  
We are at the birth of a growing market, on the 
route to zero emission motoring. Through ZAP, we 
invested in this market to be part of this future. 

Smoothing the transition to EV

ZAP helps existing and potential customers with 
the transition to EV driving. ZAP is the foundation, 
allowing customers to plan and check routes.  
Zap–Pay, soon to be launched, will enable users to 
access and pay across multiple networks through 
one single app – reducing one of the key barriers 
for mass EV adoption.

Range anxiety persists for many potential EV 
drivers. However Zap-Map’s new route planning 
function, linked to real world driving distance  
and availability of various charge points, provides 
users with the information to overcome this 
perceived difficulty.  

Delivering value for business

Businesses will play an ever-increasing role in 
the adoption of EVs. ZAP is well placed to provide 
products and services to capitalise on growth in 
this market.

As businesses look to evolve their own EV 
propositions, understanding EV usage data will be 
key. With the data they possess, ZAP are building 
a platform to provide businesses with genuine 
insight on the state of the market. Additionally, ZAP 
release regular market insights and reports which 
can help businesses plan their next steps. 

BestRes

Our Home Innovation Trial is part of the European-
wide BestRes project, which is researching how to 
better integrate renewable generation into energy 
grids. We provided each household that signed 
up to the trial with a smart hub and linked app, 
which measured energy usage by different types 
of appliance. The aim is to explore and better 
understand energy usage and management in 
the home. 

Strategy in action – recent, ongoing and 
future initiatives

In 2019, we have been focused on laying the right 
foundations for growth. This has consisted of systems, 
people and proposition investment. We have already 
begun to implement the Kraken customer technology 
platform, have invested in our leadership team and 
have a clear proposition roadmap in place for 2020 
and beyond.

We continue to refine our proposition pipeline, with 
several products in development. 

One Point: innovative solutions for a growing and 
fragmented market

The EV market is currently fragmented and complex, 
but it will soon be essential for UK businesses to offer 
charging facilities and services. We are now offering 
a new solution to make it easier for businesses to 
install chargers and to secure available network 
capacity. 2019 saw the launch of One Point: our  
end-to-end service which supports businesses 
wanting to offer EV charging to their staff, customers 
and visitors. We ran a pilot with our customer, 
Watergate Bay Hotel; installing four charging 
points on the premises, with two more planned. 
Further pilot projects will be launched soon with our 
partners. Lessons from the pilot scheme will help us 
expand One Point to companies up and down the 
country, with the potential to integrate Zap–Pay 
to enable open and simple access to all One Point 
charging locations.

Investing in innovation

The clean energy sector is constantly evolving, and 
we want our customers to be a part of it.

That’s why we’re working on new products and 
services to help customers support a clean energy 
future, along with investing in new technologies and 
research. Aside from our investments with Zap-
Map, smart meters and One Point, we continue 
to innovate in a number of ways. Recent research 
projects with both Honda and BestRes as examples.

HAVEN: using EVs for home energy storage

We recently completed an innovative research 
project with Honda, Upside Energy and Salford 
University. The study was designed to examine the 
value of ‘vehicle-to-grid’ (V2G) technology, where 
an electric vehicle is used alongside a special 
charger and other home systems: battery storage, 
solar panels, a smart hot water tank, and heat 
pumps.  The technology is designed to maximise 
efficient energy usage, save money, and cut 
carbon emissions.

20

21

Good Energy Annual Report 2019Strategic ReportGovernance ReportFinancial StatementsStrategic ReportKey performance indicators

Good Energy measures its progress with a number of key performance indicators (KPIs). In 2019, we 
added new measures which closely align with our business.

Further detail on the factors driving our KPI performance is set out in the Chief Executive, Financial and 
Operating reviews within this Strategic Report.

Churn (%)

Reflects 
the rate of 
turnover 
or loss of 
customers

-1.2%

Churn (%)

Cost to serve  
(total business) (£)

Cost to serve (£)

Cost per acquisition  
(total business) (£)

Cost per acqu.

18%

17%

16%

15%

Measures the 
overhead cost 
per customer 
excluding 
acquisition 
costs (ie. 
sales and 
marketing)

2018

2019

-6.0%

100

90

80

70

60

50

Measures 
the cost 
to acquire 
each 
customer

-16.0%

150

140

130

120

110

100

2018

2019

2018

2019

Supply volume

Revenue growth (£’000)

Gross margin (%)

Electricity (MWh)

Supply volume (E)

Measures 
the 
amount of 
electricity 
we 
supplied to 
customers

5.5%

560,000

540,000

520,000

500,000

480,000

Measures 
growth in 
sales over 
the period2

6.4%

Revenue growth

130,000

125,000

120,000

115,000

110,000

105,000

100,000

Measures 
profitability 
as a 
proportion 
of revenue 
after the 
cost of sales2

-3.6%

30%

28 %

26 %

24 %

22 %

20%

2018

2019

2018

2019

2018

2019

Gas (MWh)

Supply volume (G)

Measures 
the amount 
of gas we 
supplied to 
customers

-8.1%

600,000

580,000

560,000

540,000

520,000

500,000

22

2018

2019

Admin cost (£’000)

Operating margin (%)

Measures 
operational 
efficiency by 
looking at 
administration 
cost growth1

-2.4%

Admin cost

30,000

25,000

20,000

15,000

Measures 
profitability as 
a proportion of 
revenue after 
operating costs2

-0.7%

Operating margin

6%

5%

4%

PBT from continuing 
operations (£’000)

PBT

Measures 
profitability as 
a proportion of 
revenue after 
operating costs

-7.9%

2,400

2,300

2,200

2,100

2,000

2018

2019

2018

2019

2018

2019

EBITDA (£’000)

Net debt (£’000)

Measures 
profitability of 
the company 
before the 
cost of 
interest, tax, 
depreciation 
and 
amortisation

EBITDA

13,000

11,000

9,000

7,000

Measures the 
Company’s 
ability to repay 
all debts if 
they were due 
immediately

0.5%

Net debt

41,400

41,100

40,800

40,500

Cash & cash 
equivalents (£’000)

Cash & cash equi.

Measures the 
un-restricted 
cash and cash 
equivalents 
held by the 
business at a 
point in time

16,000

14,000

-12.7%

12,000

Gross margin

-0.7%

2018

2019

2018

2019

2018

2019

Employee 
engagement (%)

Measures how 
engaged our 
people are 
based on  
Gallup  
12 survey

5.0%

Employee engage

85%

80%

75%

NPS

Measures 
how likely a 
customer is to 
recommend 
Good Energy

17.4%

NPS

60

55

50

45

40

Carbon avoided (MWh)

Measure the 
carbon we 
avoided in 
the year

4.6%

Carbon avoided

580,000

560,000

540,000

520,000

2018

2019

2018

2019

2018

2019

1. Administration cost including depreciation and amortisation

2. Revenue, Margin and EBITDA figures reflect continuing operations

23

Good Energy Annual Report 2019Strategic ReportGovernance ReportFinancial StatementsStrategic ReportOperating review

2019 performance - continued delivery 
against our strategy

In 2019 we continued to deliver against our strategic 
objectives and progress on our journey from energy 
generation and supply to energy services as a 
business model for the future. We have taken steps 
towards achieving this goal by further developing our 
capabilities across smart metering and investing in 
technology enabled services to support the rapidly 
growing electric vehicle (EV) market. Our shift 
towards business supply was in line with our plans  
to expand our products into the fast-growing  
business markets.

Supply – a continued shift to business

Total customer numbers increased by 2.5% to 266.5k. 
Within that, we saw a continued shift in customer 
mix in line with our ambitions to focus on the business 
sector. Including both supply and Feed-in Tariff 
(FiT) segments , total business customer numbers 
increased 4.9% to 127.8k, while domestic customer 
numbers increased marginally by 0.6% to 138.6k. 

Customer number growth was driven by an overall 
increase in FiT customers of 10% to 167k customers. 
The Business supply growth aligns to the longer-term 
strategy of a more balanced earning supply portfolio 
and is the third year in a row of consistent growth in 
this segment.  Domestic supply meters fell by 8.4% 
in 2019. In line with our stated plans, the ongoing 
price sensitive nature of the domestic supply market 
remains challenging. However, Ofgem’s decision to 
award a derogation from the standard variable price 
cap on a permanent basis provides firm validation of 
our green credentials. 

Our new billing platform, Kraken, is transforming 
how we serve customers and is expected to drive 
operating cost savings, customer experience benefits 
and future growth. This will enable more customers 
to access competitively priced clean energy and 
technology services. Kraken implementation is in 
line with the Company’s strategic goals of lowering 
customer acquisition cost, improving customer 
retention and increasing overall customer lifetime 
value through an improved offering of products  
and services.

Electricity supply volumes grew by 5.5% in 2019 to 
542GWh, with business supply slightly exceeding 
domestic for the first time. Gas volumes fell by 8% to 
532GWh, driven by a reduction in domestic supply 
meters and not seeing a repeat of the extreme cold 
weather seen in Q1 2018. Gas volumes in Q1 2019 
were 42GWhs lower than the same period in 2018.

Our overall customer mix was split 52% domestic 
customers to 48% business customers. This has shifted 
from 53% domestic to 47% business split in 2018. We 
anticipate this shift in focus from domestic to business 
customers will result in our overall volumes increasing 
– assuming seasonal weather conditions follow a 
normal pattern. 

Importantly, the business market is driven through 
quality renewable products and our ability to deliver 
a more sophisticated solution for businesses than 
the consumer market. This creates a wide range of 
potential customers to engage with, particularly in the 
SME segment of the business supply market. We have 
a clear policy focused on delivering profitable growth, 
built around a fair price and better service. 

Feed-in Tariff

The FiT scheme closed to new entrants on 31 March 
2019. However, for people already signed up to the 
scheme, FiT payments will continue for up to 20 
years. We continue to administer the scheme for 
both our domestic and business FiT customers. The 
FiT proposition, in which we have one of the largest 
market positions, remains an important aspect of our 
business as it is the foundation of energy as a service 
in our business model. 

Business FiT customers increased 3.8% to 120.0k in 
the period. Domestic FiT customer growth increased 
by 32.5% to 46.7k customers, driven by an uptake in 
registrations ahead of the scheme closure in Q1 2019.

Generation

Our 47.5MW generation portfolio now consists of 
six solar and two wind sites, following the successful 
sale of Brynwhilach solar site during the year. The 
sale of the Brynwhilach solar site completed in May 
2019, with the site planned to end up in community 
ownership longer term. The focus has shifted to 
delivering value from our existing sites, where 
generation levels performed well in the period. We 
are committed to working on our existing sites and 
delivering value to stakeholders. 

We continue to take a prudent approach to the value 
of our generation business, reflecting the underlying 
economics of each asset. We constantly monitor both 
the performance and outlook of all the sites to ensure 
that our valuation reflects current market conditions.

24
24

Good Energy Annual Report 2019

25

Good Energy Annual Report 2019Strategic ReportGovernance ReportFinancial StatementsStrategic ReportCOVID-19 disclosures

Market overview

Following the ongoing COVID-19 pandemic, we are witnessing unprecedented actions from both 
Governments and businesses. As a business, we believe that our financial and operational resilience will 
allow us to react to these market challenges. We remain cash generative and have a strong cash balance. 
Operationally, our UK focused business is well placed to respond. The implementation of our new customer 
technology platform is progressing as planned, which provides us with further flexibility to operate and 
deliver all our products and services to customer.

Energy market

Good Energy and the rest of the UK energy suppliers will have to play their part in supporting the UK 
population through the COVID-19 crisis. Specific measures on PPM (pre-payment meters) will have  
limited impacts for Good Energy due to our small PPM customer base (<1k meters, and <1% of our total 
meters on supply).

However, debt windows and reassessment of bills - including pausing payment - will likely have a greater 
impact. What remains unclear is the scale of our customer base that these measures will affect. We have 
undertaken a detailed stress testing approach to understand a range of potential implications. 

Business continuity

We have been extremely focused on activating our operational response plan and now have our full 
business of just under 300 people working remotely. We are operating our core billing, supplier payments, 
forecasting, trading and customer contact normally although we are needing to make adjustments, such as 
encouraging substantial self-serve on meter reading etc, given those 3rd party face to face operations are 
being substantially curtailed.

As of Friday 20 March 2020, GE transitioned to a 100% remote workforce. This was actioned in  
several waves, to ensure continuity was uninterrupted, particularly within customer care. Good Energy is 
behaving in an agile way, by identifying employees within the business who may be less busy as a result 
of COVID-19 and training them to provide additional support to customer care, either in data analytics or 
customer interaction.

The business works predominantly on cloud-based servers, and already had in place several online 
communication tools, including Skype for Business and Microsoft Teams. Initial findings have shown that BAU 
can be achieved, despite the lack of physical proximity. This includes the customer care team, who are now 
100% remote working and have seen almost no difference in call waiting times or customer service levels. 
We expect to be able to maintain this level of service, as we become more accustomed to remote working. 

Wider business functions continue to operate as normal whilst working remotely. Forecasting, trading, sales 
and ancillary functions have all been successful in transitioning to this new model. 

Generation sites are likely to be unaffected. Sites can operate without human intervention, and contractors 
will be able to attend site for any required maintenance as they are exempt from travel restrictions due to 
utilities being an essential service.

Billing and customer relationship

The business has been proactive in discussions with several of its key customers. Conversations have been 
held with our largest customers, where we remain confident in their liquidity and ongoing ability to pay. This 
represents a significant portion of our business portfolio. 

For those smaller businesses who are more likely to see negative impacts from COVID, we are working 
with them to understand their needs. For many who have been forced to postpone operations, we will look 
for accurate meter readings. This will ensure that any bills they receive will be for lower, actual volumes 
consumed, as opposed to relying on estimates based on historic consumption. This provides customers with 
actual figures, and not larger potentially more daunting figures based on incorrect consumption estimates. 
These conversations are ongoing across all of our business customers, with our sales and billing team  
being proactive. 

We are asking customers to self-serve meter readings where possible, due to the operational challenges 
with sending technicians out on our behalf. We have seen positive results to date. 

Working closely to understand our customers’ needs will ensure that we can partner with them during these 
uncertain times.

Finance

Revenue

From a revenue perspective we expect to see a reduction in energy supply revenue on account of  
reduced demand in commercial supply, but this is expectedto be partially offset by an increase in domestic 
supply demand. 

Cashflow

Clear quantitative evidence to show the impact on domestic demand for Good Energy’s customer base is 
only beginning to emerge. It is clear that there will be an increase in domestic demand, and this will be a 
natural offset to reduction in commercial demand. However, whilst demand will almost certainly increase, 
people’s ability to pay bills has the potential to be reduced. Cashflow is a higher risk than gross margin when 
considering the domestic supply business.

We will continue to monitor our expenditure in a prudent manner. There are several mitigations we have 
already put in place to ensure a good cashflow position is maintained, including a reduction on discretionary 
spend in the short term. 

Uncertainty and stress testing

Uncertainty around the scale, timing and impact of the coronavirus pandemic means it is difficult to give 
meaningful external guidance for forecasts in the year ahead. We have analysed a range of outcomes for 
the current year for different sales scenarios. The resulting stress test is very useful; it gives a clear picture 
of the possible effects on our balance sheet and finances and points to the practical steps we can take to 
ensure the Company is best places to cope with all imaginable outcomes.

We have performed stress testing on our cashflows, to determine what is the maximum strain that the 
business could bear over the next 12 months in respect of the potential impacts of COVID-19 and the full 
redemption of Good Energy Bonds II in June 2021, against cash requirements, financial covenants with 
trading counterparties within the supply business and debt covenants within the generation business. 

Early impact

We have currently seen no deterioration in direct debit or pay on receipt of bill cash receipts from 
customers since the start of the COVID-19 pandemic and lockdown.

Early indications have shown a 10-15% increase in demand for domestic electricity and gas with this 
segment accounting for approximately 55% of Good Energy’s supply cash flow. We have seen a reduction 
of approximately 25% in electricity demand from our business customers. This segment accounts for 
approximately 45% of Good Energy’s supply cash flow. It is a sector diversified portfolio of c.8000 customers 
including a number of prestige clients. We have currently seen no deterioration in direct debit or pay on 
receipt of bill cash receipts from customers since the start of the COVID-19. However, as the lockdown 
period continues, and an economic downturn commences we are expecting an impact on business and 
domestic customers’ ability to pay for energy usage.

Stress testing and going concern

As with all businesses, we have spent considerable time assessing the potential impacts that COVID could 
have on our operations. Despite the limited impact that we have seen to date, we continue to monitor a 
range of potential worst-case scenarios. Further details can be found on page 72.

Summary

We believe that Good Energy Group has a resilient financial and operational platform after taking the 
impact of the COVID-19 outbreak into account. This is due to a strong cash position, the offset of demand 
impacts between Domestic and Commercial supply, mitigations in place for potential cashflow issues, and 
successful business continuity plans already in place. 

Further information can be found on page 72.

26

27

Good Energy Annual Report 2019Strategic ReportGovernance ReportFinancial StatementsStrategic ReportKey risks

Risk management approach: 

Good Energy recognises that effective risk management is critical to enable it to meet its strategic objectives.

The Company has a clear framework for identifying and managing risk, both at an operational and strategic 
level. Its risk identification and mitigation processes have been designed to be responsive to the changing 
environment in which it operates. The impact of emerging risks on the Company’s business model are also 
considered and used to make informed decisions, including as to the delivery and evolution of the Group’s 
strategy. The risks below capture those risks that would have the most significant, adverse impact – based 
on their impact and / or likelihood – on the Company. While the risks are typical of the risks faced by other 
energy suppliers, we believe the Company is well positioned to mitigate through a combination of our risk 
management processes, our control activity and our evolving strategic direction.

Generation

Energy supply

Sharing services

Generation

PPA

Supply 
B2C

Supply  
B2B

FiT

P&S

Political

Regulatory

Financial risk management

Cyber

Wholesale market and 
price volatility

Weather, forecasting 
demand and generation

Brand, Trust and Reputation

COVID-19

lower risk

lower/medium risk

medium risk

elevated risk

Power purchase agreements (PPA)

Feed-in-Tariff (FIT)

Domestic customer supply (Supply B2C)

Products & services (P&S)

Business customer supply (Supply B2B)

Our business model

Good Energy has two principal business areas: Supply and Generation. Our Supply business where we  
serve over 260,000 domestic and business customers and match all the electricity used by them with power 
sourced directly from 100% renewable sources. Within Supply, our Feed-in Tariff (FIT) administration services 
help households and business meet either all or part of their electricity demand directly from their own 
renewable technology. 

Our Generation business delivers 100% renewable electricity to the UK electricity grid from eight renewable 
energy facilities across the UK that Good Energy owns and operates. 

Operationally, our segments are supported by a common central operating platform which provides 
functional support to our businesses around sales, IT, marketing etc. This allows us to achieve efficient scalable 
growth and to use the platforms to cross-sell different services and capabilities to different customer types. In 
2020 we will introduce a new customer services platform.  Licensed from Kraken Technologies, a subsidiary of 
the Octopus Energy Group, the new platform will provide significant scalability and flexibility.  Built to efficiently 
handle large data volumes, it will support the roll out of future smart products and services and provide a 
single customer view. This will allow Good Energy to play to its strengths in the home and business clean 
energy services market, through simplifying its customer services processes and supporting a step change in 
the ability for the company to respond to future customer needs. 

Our business model relies on some important partnerships and communities, in addition to our customers who 
range from individual consumers and households, small businesses through to large corporations. 

Our proposition to our customers is to be a trusted and fair customer-focused supplier of 100% clean energy, 
who is driven by a clear purpose to power the choice of a cleaner, greener future together. This unique 
proposition, along with our strong brand, are important elements of our business model. 

In our Supply and Generation business areas, we continue to ensure we have robust continuity planning 
process in place to support our operational and financial resilience. The coronavirus (COVID-19) pandemic 
provides an example of an exogenous shock we have prepared for. We have seen no significant impact from 
the pandemic to date, however we are monitoring the situation closely while planning for a range of scenarios 
including changes to current government guidance or policy. The business is confident that it has the flexibility 
and plans in place to mitigate sufficiently the material impacts of the crisis.

28

29

Good Energy Annual Report 2019Strategic ReportGovernance ReportFinancial StatementsStrategic ReportPrincipal risks and uncertainties

Political risk: In 2018, the government introduced a market-wide Standard Variable Tariff (SVT) price cap. 
This is a price cap, setting the maximum price that a supplier is allowed to charge for electricity and gas for 
domestic consumers, focused on consumers that have not proactively engaged in the market and chosen 
a tariff (and are therefore on the SVT, or other default tariffs). On 1 August 2019, Ofgem awarded us a 
permanent derogation from the price cap in recognition of the many ways in which the Company continues 
to support renewable energy generation across the UK. This was recognition of our strong level of customer 
engagement; active decisions by our customers to be on chosen tariffs;  and essentially demonstrating to 
Ofgem the associated costs of providing green energy. 

Successfully proving all these factors underpinned our achieved derogation which will apply for the full 
duration of the price cap until it is removed in 2023.   

Beyond the derogation the past 12 months have seen two Prime Ministers, a general election and the UK leave 
the EU - Political risk is ever present. As a result, Good Energy will continue to support, lobby and influence 
wherever it is appropriate especially when it comes to the Green agenda.  This has become more and more 
important politically and in society and Good Energy will continue to push hard to be part of the national 
conversation on tackling the climate crisis. 

Regulatory risk: The energy industry is constantly changing to keep up with technology, consumer needs & 
demands as well as government policy (e.g. SMART and EU General Data Protection Regulation (GDPR) etc.). 
Regulations require the Company to make various changes to its procedures within set timelines and have 
already led and will continue to lead to the Company incurring additional time and cost in order to ensure 
compliance with these new regulations.  

A significant volume of regulatory change is a risk to the Company as it can divert time and resource away 
from growth initiatives as well as the risk of not meeting regulatory deadlines. The Company has invested in 
its regulatory and compliance capability and has enabled the Company to respond effectively to the volume 
of change, thereby reducing the risk. GDPR came into effect from May 2018. Good Energy takes the security 
of all personal data very seriously and manages the risk in a number of ways to ensure our customer and 
employee data is protected. There are a number of controls in place to minimise the risks, such as system 
access rights, mandatory training for all employees upon induction with periodic refresher training appropriate 
to the employee’s role. Our Guiding Principles set the requirements for all employees and contractors which 
include consequences for non-adherence. 

Cyber-attack: As we grow as a business and as technological advances are made, we are increasingly 
exposed to the threat of cyber-attack. As with many businesses, a successful cyberattack on Good Energy’s 
network could result in the Company being unable to deliver service to its customers, potentially damaging 
its reputation, and leading to consequential customer and revenue loss. It could also lead to the imposition of 
financial penalties. 

Good Energy continually assesses its security policies, standards and procedures and adjusts them, so they 
are proportionate to the threat profile the Company faces. The Company actively monitors our threat 
environment utilising the National Cyber Security Centre (NCSC) which provides weekly updates on the latest 
cyber landscape. 

Wholesale market and price volatility: Revenue from sales of electricity and gas are affected by fluctuations 
in wholesale prices and the associated costs of purchases when market conditions are volatile. Good Energy 
mitigates this risk partly through the benefits of its vertical integration, and partly via its forward-looking and 
prudent hedging policy.  

Due to these policies Good Energy was able to hold prices unchanged through 2019 giving its domestic SVT 
customer base certainty on pricing. 

Weather, forecasting demand and generation: On the supply side, temperature drives demand and customer 
behaviour. From a generation perspective, the impacts of climate change alongside the annual variability of 
wind speeds and solar radiation, can result in year-to-year fluctuations. Any material reduction could have an 
adverse impact on financial results.  

Accurate forecasting is key, in the long term, to guide informed hedging and thus mitigating against adverse 
market movements, and in the short term to avoiding imbalance risk. Continued investment in forecasting 
capability and systems has provided Good Energy with good visibility and forecasting performance.

Brand, trust and reputation: Good Energy’s purpose is key to its proposition, damage to its brand and 
reputation would compromise its competitive position. Good Energy was founded in 1999 to help homes and 
businesses be part of a sustainable solution to climate change. We remain as true to this purpose as we were 
twenty years ago.  

Our community of shareholders, bondholders, generators, customers and employees are helping create a 
cleaner, greener future powered by renewables. From using digital innovation to help UK households and 
businesses manage their energy usage, to empowering them to generate, store and share their own clean 
power, we are leading the charge towards a cleaner, distributed energy system.

COVID-19: The worldwide spread of the COVID-19 virus and subsequent impacts on people and businesses 
around the World creates unique risks for all businesses.  For Good Energy, those risks can be summarised as 
cashflow, business continuity, employee welfare and supplier/customer relationships. The Group is actively 
monitoring the impact of COVID-19 on its business and has put in place a number of mitigations to minimise 
the impact. The Group has been working with a variety of stakeholders to ensure our UK focused business is 
well placed to respond. We now have our full business of just under 300 people successfully working remotely. 
All core business functions including customer care are functioning as expected although we are needing to 
make adjustments, such as encouraging substantial self- serve on meter reading etc, given those third party 
face to face operations are being substantially curtailed. 

The Group has spent considerable time assessing the potential impacts that COVID-19 could have on our 
operations. This assessment has taken in to account the current measures being put in place by the Group 
to preserve cash and reduce discretionary expenditure, and potential reductions in revenues resulting from 
the economic impact on domestic and business customers due to lockdown and an expected economic 
downturn. Please see the Going Concern disclosure (page 72) for details. . 

Financial risk management: This has been considered within note 3 in the Notes to the Financial Statements. 

30

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Good Energy Annual Report 2019Strategic ReportGovernance ReportFinancial StatementsStrategic Report 
 
 
 
 
 
 
 
 
 
 
Chief Financial Officer’s review

In 2019 we demonstrated financial and 
operational resilience with a strong cash 
position. We saw strong business growth, 
increased our FIT portfolio and made 
significant investments in line with our 
strategic shift from supply to sharing power.

Finance costs increased by 1.7% to £4.3m, as overall 
debt paydown was offset by an increase in reported 
finance costs following the implementation of IFRS16.

Underlying profit before tax decreased by 7.9% to 
£2.1m (2018: £2.3m). Continuing profit before tax 
– after the impact of the one-off Kraken platform 
investment – decreased by 45.4% to £1.3m.

Profit and loss

Revenue increased by 6.3% in the period to £124.3m 
(2018: £116.9m). The increase was driven by strong 
business supply growth particularly in the second  
half of the year, offset by lower domestic supply 
customer numbers.

Cost of sales increased by 10.9% to £92.6m (2018: 
£83.5m). This was predominantly driven by a market 
wide increase in commodity prices during 2018, 
which flowed into the cost base at the beginning of 
the year. There was also a rise in compliance costs, 
with significantly increased costs for ROC, CFD and 
capacity market contributions in 2019. 

Gross profit decreased by 5.4% to £31.7m (2018: 
£33.4m) driven by the increase in commodity prices, 
lower domestic gas volumes and planned shift 
to lower margin but more stable business supply 
customers. Gross profit margin decreased to 25.5% 
(2018: 28.6%). 

Administration costs decreased 5.9% to £25.2m 
(2018: £26.8m), excluding the one-off £0.9m impact 
of the Kraken platform investment incurred in 2019, 
costs decreased 2.7%. To help offset the increased 
compliance and commodity costs the business kept 
close control over costs in 2019.  Through this we 
were able to deliver a £1.6m reduction in like for like 
costs versus 2018.   

Our investment in the Kraken billing platform 
comprises the first stage of our Customer Services 
2020 project (CS2020).  

This project enables a move to a more customer 
centric and less resource intensive customer support 
and billing system. In addition to the initial £0.9m 
in admin costs in 2019, CS2020 will have further 
cost impacts before delivering significant ongoing 
administration cost savings from its activation in 2020.  

Total forecast investment in Kraken of £4m will be split 
approximately equally between cash and non-cash 
elements. Operating cost savings are expected to 
achieve payback of the forecast investment within 
18 months of the full implementation by Q2 2020. It 
is anticipated that the write down of existing systems 
and the cash investment into implementation and 
transition will be taken across 2019 and H1 2020. 

Operating margin decreased to 4.5% (2018 5.7%). 
Excluding the impact of £0.9m investment costs 
above, operating margin was 5.2%.

The tax charge includes the effects of the impairment 
of a wind development project and Substantial 
Shareholding Exemption on the sale of Good Energy 
Brynwhilach Solar Park Ltd.

Cash flow and cash generation

Our business model is cash generative with £8.1m 
cash generated from operations (2018: £18.1m), with 
£10.0m generated before movements in working 
capital (2018: £10.6m).   The performance in 2018 
included the recovery from delayed billing and cash 
collection during 2017.

There was a cash inflow of £1.4m from investing 
activities (2018: outflow £2.6m) following the sale of 
Brynwhilach solar site in May 2019. This was reduced 
by a net outflow of £7.5m (2018: £9.5m) from 
financing activities following the repayment in full  
of Good Energy Bond I June 2019 and continued  
debt paydown.

Funding and debt

The remaining £3.6m of Good Energy Bond I was 
repaid in full in June 2019. Following the repayment of 
Bond I, Group finance costs will be significantly lower, 
making this a positive step towards lowering the 
Company’s ongoing financing costs and reducing the 
gearing ratio over the medium term. 

Net debt increased 0.5% to £41.1m (2018: £40.9m). 
Excluding the impact of IFRS 16, net debt decreased 
12.6% to £35.7m following the bond repayment. 
Gearing ratio increased to 68.6% from 68.5%. 
Excluding the impact of IFRS16, the gearing ratio  
was 65.5%. 

The Group continues to maintain a robust financial 
position. We look to ensure we optimise our use of 
capital by continually reviewing the returns on our 
assets, balancing operating requirements,  
investment for growth, and payment of dividends 
back to shareholders. 

The Group is currently evolving its strategy towards 
energy services and remains mindful of the need to 
capitalise on strategic business development and 
investment opportunities. Prudent balance sheet 
management remains a key priority.

Earnings and dividend

Investment in associate

Basic Earnings per share (continuing) decreased 
to 7.5p from 10.2p as a result of the underlying 
performance and decreased profitability. Alongside 
our ongoing investments, we aim to deliver a 
progressive dividend policy. Despite a good 
performance in 2019 and our confidence in the 
ongoing business, the Board has recommended 
deferring the full year dividend considering the 
ongoing COVID-19 pandemic and prudent cashflow 
management. The operation of the Good Energy 
scrip dividend scheme whilst still operational, will also 
be deferred alongside the dividend. The Board will 
review this position following the publication of our 
interim results in September 2020.

Investment valuations

As part of our overall financial review, we continue 
to monitor the fair value of all of our investments 
through an understanding of the wider environment 
as well as the underlying economics of all assets 
across the business. As a result of this process, the 
Board has decided to fully write down the value of 
our investment in its remaining un-developed wind 
farm site.

The investment had a carrying value as at 31 
December 2018 of £1.3m and is reported under 
Discontinued Operations. 

Non underlying costs

An amount of £865k has been incurred as non-
underlying costs within the period. This amount 
relates to the one-off expenditure resulting from 
implementing the Kraken technology platform and 
associated restructuring costs. 

IFRS16

The business implemented IFRS16 regarding 
treatment of leases as a new accounting standard in 
the period, affecting the treatment of leases. Further 
details can be found in the notes to the accounts 
(note 16). 

The share in loss of associate of £42k in the period, 
relates to the equity stake investment in Next Green 
Car Ltd. Further details can be found in the notes to 
the accounts (note 18).

Outlook

The business continues to perform in line with 
management expectations. We have seen no 
significant financial impact from the coronavirus 
(COVID-19) outbreak to date, however we are 
monitoring the situation closely while planning for 
a range of scenarios including changes to current 
Government guidance or policy.

We believe that Good Energy Group has a resilient 
financial and operational platform after taking the 
impact of the COVID-19 outbreak into account. This 
is due to a strong cash position, the offset of demand 
impacts between Domestic and Commercial supply, 
mitigations in place for potential cashflow issues, and 
successful business continuity plans already in place.

In 2020, underlying profit growth will be underpinned 
by both core business growth and finance cost 
savings. Following increased investment throughout 
2019, we are focused on execution in 2020. 
We will monitor our execution to deliver system 
improvements, digital and online capabilities to drive 
future growth and the longer-term strategy. These 
investments will provide us with a platform for future 
growth beyond 2021. 

Rupert Sanderson

Chief Financial Officer

3 June 2020

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What we do to 
achieve our purpose 
& CSR: Empowering 
you to use, share, 
generate and store 
clean energy

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Good Energy Annual Report 2019

Strategic report

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Good Energy Annual Report 2019Strategic ReportGovernance ReportFinancial StatementsStrategic ReportA regenerative business

Sustainability is an increasingly important focus for businesses of all sizes. The UN’s 
Sustainable Development Goals (SDGs) provide a guiding framework. These 17 
goals range across environmental and social factors, from protecting life on land to 
ending hunger.

Good Energy is a founding member of the UK Stakeholders for Sustainable Development 
— a network of organisations working together to act on the SDGs in the UK.

Two of the SDGs are at the core of everything we do: 

People: Affordable & clean energy (Goal 7) 

Empowering our customers to be part of the solution to the climate crisis is central to our purpose. 
We do this by sourcing 100% of our electricity from certified renewable sources. And we continue 
to support households and businesses to benefit from generating their own renewable power — a 
distributive approach to increasing access to affordable, clean energy.

Planet: Climate action (Goal 13)

We started life as a business to fight climate change. This informs how we operate as a company on 
a day-to-day basis. We work hard to accelerate climate action in everything we do; from lobbying 
government to take stronger policy measures to public petitions in support of clean power. 

How can the SDGs be achieved?

Economist Kate Raworth argues that sustainable development is nearly impossible under our current economic 
system: a linear economic model that relies on endlessly extracting resources.

To change this ‘degenerative’ linear economic system, Raworth proposes a ‘doughnut’ model for the economy 
that is based on the SDGs, covering environmental and social factors with a safe space in between. Being 
‘within the doughnut’ means meeting the social needs of people, whilst not having a harmful impact on 
the planet. She explains that there are several levels of responsibility a business can take for its social and 
environmental impact: do nothing, do what pays, do your fair share, do net zero, or be regenerative.

Being regenerative means making a positive impact for both people and planet.

Good Energy is aiming to be in this category — we want to go beyond ‘net zero’ and have an actively positive 
impact on the world.

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How Good Energy fits the model

The social foundation of our business is to provide energy in a way that doesn’t contribute to – and works 
to combat – climate change.

In doing so, we also strive to positively engage with other elements of Raworth’s model. Altogether, our aim 
is to become a fully regenerative business and have a net-positive impact across the SDGs.

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Good Energy Annual Report 2019Strategic ReportGovernance ReportFinancial StatementsStrategic Report 
 
 
 
Our environmental impact: combatting 
climate change with clean energy

Price Cap Exemption

In 2019, Ofgem introduced the price cap on default 
energy tariffs, designed to protect consumers who 
are on the most expensive standard variable tariffs – 
often without realising it.

Good Energy was one of three green energy 
suppliers to be awarded a temporary derogation to 
the price cap when it was first introduced. After a 
lengthy application which went into every aspect of 
our business the regulator awarded us a permanent 
exemption from the cap, recognising we offer 
material support to new renewable generation in the 
UK. And our customers actively choose to support this 
unique service when they join one of our tariffs.

The exemption proves that Good Energy is different, 
offering a service to customers which can’t be 
matched by the vast majority of energy suppliers.

Zero-carbon Britain

Good Energy has always set an example for what 
is achievable in clean energy for the UK. When 
the company was first founded, no other energy 
company was doing 100% renewable electricity. 
We created HomeGen in 2004, allowing people to 
get paid for generating clean power at home, which 
became the blueprint for the government’s Feed-in 
Tariff scheme that led to an explosion of hundreds 
of thousands of small-scale renewable generators. 
With the UN’s next international climate change 
conference, COP26, due to take place in Glasgow, 
the country has an opportunity to show global 
leadership.

We intend to build on our historical role in clean 
power – and lead further in the ever more pressing 
areas for decarbonisation: heat and transport. 

Changing the energy conversation

We work hard to inform the debate around energy 
and climate change. The market is changing rapidly, 
and consumers need to play a central role in shaping 
the country’s energy mix. We are supporting people 
to do this by calling for greater transparency about 
green energy tariffs.

The fight against greenwashing

Good Energy has been leading the fight against 
greenwashed energy tariffs for the past three years.

This is the practice of buying renewable certificates, 
called REGOs, separately from the power they relate 
to at a very low cost. Many energy suppliers are using 
the loophole to offer customers ‘100% renewable’ 
tariffs without buying any renewable power.

In the past year, the campaign has drawn the 
attention of both the regulator, Ofgem, and Which? 
magazine. In September, Which? published a report 
on the problem, calling out the majority of energy 
suppliers and giving Good Energy the highest ‘dark 
green’ rating for its power.

Following this success, which was widely covered 
in the national media, Ofgem has revisited 
greenwashing in its new Decarbonisation Action Plan. 
The plan explicitly states: “We are aware of growing 
concerns about ‘greenwashing’…we expect suppliers 
to be transparent about what constitutes a ‘green 
tariff’ and we will undertake work to ensure that 
consumers are not misled.”

Our wind farms and solar parks
The decarbonised energy system will be built on technology-enabled energy services, allowing the flexibility 
needed for a 100% renewable electricity grid in the UK. We are applying this vision of the future energy system 
to how we serve our customers. All underpinned by our own wind and solar parks which are the bedrock of 
our business and contribute to the UK’s renewable generation capacity.

Good Energy owns and operates six solar parks and two wind farms. We’ve taken care to consider how the 
biodiversity of our sites can be protected and enhanced where possible, and also how our sites can benefit 
the communities in which they are based.

Delabole

Carloggas

Location: Cornwall
Capacity: 9.2MW
Homes powered: 6,4001
Community fund: £9,2002 per year. 
Projects supported include new fencing 
for the allotment society and installing 
solar PV at the cricket club.

Hampole

Location: Yorkshire
Capacity: 8.2MW
Homes powered: 5,400
Community fund: £8,200 per year. 
Projects supported include a public wildlife 
garden, improvements to local churches 
and support for community action and 
neighbourhood watch groups.

Rook Wood

Location: Wiltshire
Capacity: 5MW
Homes powered: 1,250
Biodiversity: Wildflower meadow to support 
pollinating insects, bird and bat boxes on 
existing mature trees.
Community fund: £5,000 per year. 
Projects supported include a garden project 
at the local primary school and community 
coffee mornings.

Crossroads

Location: Dorset
Capacity: 5MW
Homes powered: 1,250
Biodiversity: Wildflower meadow to 
support pollinating insects, sheep grazing,  
on-site beehives.

Community fund: £6,000 per year. 
Projects supported include the installation 
of solar PV on the roof of a local school and 
energy-efficient heating for the village hall.

Location: Cornwall
Capacity: 8.3MW
Homes powered: 2,200
Biodiversity: Diverse grassland, butterfly and 
moth friendly planting, bird and bat boxes 
on existing mature trees. 
Community fund: £8,300 per year. 
Projects supported include installing a 
new heating system in a local community 
centre and providing community waste 
and recycling bins.

Woolbridge

Location: Dorset
Capacity: 5MW
Homes powered: 1,350
Biodiversity: Wildflower meadow, 
sheep grazing.
Community fund: £5,000 per year. 
Projects supported including refurbishing 
a library, improving a local skatepark and 
installing solar PV at three primary schools.

Creathorne Farm

Location: Cornwall
Capacity: 1.8MW
Homes powered: 1,350
Biodiversity: Wildflower meadow to support 
pollinating insects, sheep grazing.
Community fund: £60,000 grant split 
between the parishes of Poundstock 
and Marhamchurch. 

Lower End Farm

Location: Wiltshire
Capacity: 5MW
Homes powered: 1,300
Biodiversity: Enhancing existing hedgerows 
to support birdlife, diverse grassland, 
wildflower meadow to support pollinating 
insects, sheep grazing

Community fund: £7,500 per year. 
Projects supported include enabling 
Worton and Marston Village Hall to run 
free community events, church repairs and 
buying a community defibrillator.

1 Data for number of homes powered is approximate and based on average annual household electricity consumption for 2017 of 3,750.08kWh  
(Source: BEIS: Average annual domestic electricity bills by various consumption levels 2017)

2 All community fund amounts rise with inflation

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Good Energy Annual Report 2019Strategic ReportGovernance ReportFinancial StatementsStrategic ReportCarbon neutral gas

Sichuan biogas

Investing in innovation

One Point

Sichuan is one of China’s poorest provinces, 
where average annual incomes equate 
to €500. The province was also struck by 
an earthquake in 2008, which left nearly 
5 million people homeless.

Xuyong Biogas helps communities to rebuild 
by installing household biogas digesters – 
and providing training on how to maintain 
them. This allows farmers to use animal 
waste to generate clean fuel, reducing 
the need for households to spend money 
on polluting coal.

As well as improving access to clean, 
renewable energy, this project creates new 
job opportunities to become biogas installers.  

Turkey commercial-scale biogas

This project works with one of Turkey’s largest 
dairy companies, which has the capacity to 
process 500 million litres of milk annually.

Waste from the plant and surrounding 
farms is used to create biogas, which is 
then burned to create renewable electricity. 
This grid-scale generator is expected 
to generate over 14.9GWh annually. 
That’s equivalent to the power demand 
of 4,500 typical UK homes. 

As well as producing clean power and 
helping to make Turkey’s power grid greener, 
benefits include the production of quality 
fertilizer and providing new green jobs. 

As well as 100% renewable electricity, we 
have thousands of customers signed up to 
our carbon neutral gas.

What makes it carbon neutral?

In 2019, we worked to increase the 
proportion of renewable biogas we’re able 
to supply our customers from 6% up to 10%, 
with 10% representing the percentage of the 
UK’s gas demand that it would be possible to 
source from UK-generated biogas. As of 1st 
April 2020, all our gas tariffs offer 10% biogas. 

Biogas – also known as biomethane – is 
generated by breaking down organic matter 
such as farm waste in an anaerobic digester. 
The benefit of using biogas - rather than 
natural gas is that it maintains the carbon 
balance. This means that, when it’s burned, 
it releases the same amount of carbon 
dioxide that the organic matter used to 
produce it absorbed while it grew. Burning 
natural gas, however, releases carbon 
dioxide locked up millions of years ago.

As well as using biogas, we neutralise 
emissions from all the gas our customers 
use by investing in verified carbon reduction 
schemes, in partnership with ClimateCare. 
All three projects we support have received 
Gold Standard accreditation, which is an 
internationally recognised benchmark for 
carbon offset projects.

India biogas

In India, more than 1,000 women and 
children die every day from exposure to 
smoke produced by household cooking 
with solid fuel.

This project works with rural districts to 
install biogas digesters. These turn a readily 
available fuel source, cattle dung, into clean, 
renewable energy for cooking.

Benefits include reducing deforestation from 
felling trees for fuel, protecting biodiversity 
and improving health within the home. 
The digestate produced at the end of the 
biogas generation process can also be 
used as crop fertilizer.

The clean energy sector is constantly evolving, 
and we want our customers to be a part of it.

That’s why we’re working on new products and 
services to help customers support a clean energy 
future, along with investing in new technologies 
and research.

Zap-Map

In May 2019 we announced our investment 
in Zap-Map, taking a majority stake in the 
Bristol-based EV charging platform. The 
start-up simplifies the driving experience 
for EV owners, helping them share and 
pay for charge points. The app is widely 
used among the UK’s 280,000 EV drivers, 
and we are helping the company develop 
new products for the fast-growing market. 
You can find more detail on our Zap-Map 
investment in the Strategic review, on 
page 20.

2019 saw the launch of One Point – our simple,  
end-to-end service that supports businesses wanting 
to offer EV charging to their staff, customers and 
visitors. A pilot scheme was put in place at the 
Watergate Bay Hotel in Cornwall, with Good Energy 
managing the installation of four charging points  
on the premises. Read more about One Point on  
page 21.

Smarter smart meters

We have always believed in the power of smart 
meters to change people’s relationship with energy. 
The next generation SMETS2 meters will offer 
detailed insights and control over our energy usage. 
This technology is crucial to supporting a zero-
carbon energy grid. We are currently piloting our 
smart project with over 100 customers, ensuring we 
get the project right before rolling out nationwide.

HAVEN: using EVs for home energy storage

We completed an innovative research project 
with Honda, Upside Energy and Salford University. 
The study was designed to examine the value of 
‘vehicle-to-grid’ (V2G) technology, where an electric 
vehicle is used alongside a special charger and other 
home systems: battery storage, solar panels, a smart 
hot water tank, and heat pumps. The technology is 
designed to maximise efficient energy usage, save 
money, and cut carbon emissions.

The study concluded that the technology could 
save up to £300 a year by enabling households to 
store and share electricity in their car’s battery. 
But the new clean energy technology faces 
significant roadblocks, with fresh policy needed 
to enable its future.

“Vehicle to grid is the missing link between electrification of transport  
and decarbonisation of our grid and our homes. V2G is where solar  
power was 10 years ago – the technology exists but it requires  
innovation, investment and joined up thinking. With the right policy  
support it could become another clean technology British success story.”

Juliet Davenport, CEO & Founder, Good Energy

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Good Energy Annual Report 2019Strategic ReportGovernance ReportFinancial StatementsStrategic ReportOur customers

Eco-conscious households

Jay and family made the switch from a ‘Big Six’ supplier to Good Energy over 4 years ago.

“The reason we chose and have remained customers with Good Energy is because we care about 
the environment and want to be part of the green revolution, knowing all energy provided by the 
company is genuinely 100% renewable.”

Home generators

At Good Energy, we administer Feed-in Tariff payments for over 150,000 sites. This makes us the only 
UK energy company that has more customers that generate their own power than who buy it from us. 
Bob is one of our long-standing Feed-in Tariff customers. 

“When we installed our solar panels in 2007 (I believe we were the first to do this in Alton 
Hampshire) it was clear our energy supplier could not handle the changes. Good Energy were 
recommended and we soon joined.

We decided also to invest in what GE was planning to do so purchased shares and later bonds as 
well. This was to support the company’s schemes for wind farms and community action. We had 
also put in Thermal Solar panels and together with our PVs got a good initial FiT. We consciously 
adapted our lifestyle to minimise energy use (and cut back on material use as well). I have 
purchased an electric vehicle and have also installed a Tesla Powerwall storage battery.

My wife and I are active in our town, joining a climate action group and local environmental group. 
It is noticeable that the arguments against tackling climate change have shifted considerably in 
recent years.”

Small green businesses: The Garden

The Garden restaurant is just down 
the road from Good Energy’s offices in 
Chippenham. Owner John says customers 
and staff like the fact that it runs on 100% 
renewable power.

“We are always striving to be green and 
to do things that help the world go round. 
Having Good Energy as our energy 
provider has helped us to become wholly 
sustainable. If we weren’t using renewable 
energy I feel we would be missing out on 
something very important.

It’s great to open people’s eyes and 
make them understand that it’s not that 
difficult to be green. I think the more 
and more we let people know about our 
relationship with Good Energy, the more 
and more people will enjoy what we do, 
and come to us.”

“That’s what really stood out. 
Good energy knew more about 
the source of their electricity 
than the other suppliers.”

Jamie Saye, Opera North

Sustainable large businesses: 
Opera North

Opera North chose Good Energy 
as their supplier in 2017. And since 
switching to renewable electricity, 
the National Opera company has seen 
workplace culture transform into one 
that’s far more energy conscious.

When looking for a new energy supplier 
Jamie Saye, a Senior Technician at Opera 
North, was impressed that we knew where 
every kW came from. “That’s what really 
stood out. Good Energy knew more about 
the source of their electricity than the 
other suppliers.” 

The Opera North facilities team saw the 
introduction of renewable electricity as 
an opportunity to also save energy at 
the organisation’s headquarters, Premier 
House. The first step was encouraging staff 
to think about how they could cut their 
own electricity use. Thanks to Good Energy 
providing half-hourly data Jamie was able 
to produce graphs showing how their 
actions were making a difference. 

Knowledge is power

Opera North uses our half-hourly data 
visualisation portal. It allows businesses to 
access more than 75 online reports to find 
out how and when they are consuming 
electricity. In addition it can compare 
data from the past two years to show year 
on year trends and average consumption 
ranges. Jamie says the data from Good 
Energy has been a game changer, 
making them fully informed consumers.

Other businesses to have joined us in 2019 include:

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Good Energy Annual Report 2019Strategic ReportGovernance ReportFinancial StatementsStrategic ReportOur independent generators

20 years and still flowing: our long relationship with Glen Lyn Gorge

One of our longest running partnerships is with Glen Lyn Gorge hydroelectric plant in Devon.  
A small-scale hydro scheme with a capacity of 300W, Glen Lyn generates 1.5GWh per year. 

The scheme came online in 1987 and was the brainchild of Ken Oxenham. His son Matthew now runs 
the plant and signed up with Good Energy not long after we started – making Glen Lyn one of our 
first independent generators. 

For two decades, they have relied on us to make sure they get the best deal for their power through 
our PPAs (Power Purchase Agreements). We also handle Glen Lyn’s monthly ROC (Renewable 
Obligation Certificate) and REGO (Renewable Energy Guarantees of Origin) submissions to Ofgem. 
We ensure they arrive before the deadlines and that Matthew is paid on time. 

Matthew is a committed environmentalist and avoids computer use where possible; “I’ve chosen to 
make a principled stand on computers because of the amount of energy they use”.

 All our dealings have been through the post or over the phone because that’s the way Glen Lyn 
prefer it and we’re happy to accommodate that. “I stay with Good Energy because of my principles 
and theirs, particularly their commitment to renewable energy”, says Matthew. “I have only positive 
things to say about Good Energy”.

Our generator map

Glen Lyn Gorge is just one of 1,500 independent 
renewable generators that we source power from. 
This map and the table show the number and type 
of generators we buy from across the country.

Generation type

Solar

Wind

Hydro

Bio

1

2

3

4

8

6

10

13

14

5

9

7

12

11

1.  North 

Scotland

2.  South 

Scotland

3.  North 

Western 
England

4.  North 

Eastern 
England

17

55

22

17

45

10

29

12

19

20

5

6

5.  Merseyside 
& North 
Wales

31

14

25

6. Yorkshire

47

23

7.  West 

Midlands

8.  East 

Midlands

9.  South 
Wales

10.  Eastern 
England

11.  South 

Western 
England

78

14

78

14

35

25

123

11

260

51

12.  Southern 

England

185

51

13. London

10

14.  South 

Eastern 
England

128

-

-

*Based on data from October 2019

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6

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5

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2

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Good Energy Annual Report 2019Strategic ReportGovernance ReportFinancial StatementsStrategic ReportPartners for change

We work with sustainability organisations across different sectors. Together, we’re helping businesses 
of all sizes to reduce their environmental impact and tackle the climate crisis.

“At BAFTA we have a responsibility to lead the film and television  
industries towards a wholly sustainable future and this is an important 
step in that journey. We are delighted to be working with Good 
Energy to achieve this.

BAFTA Albert

Kevin Price, BAFTA

Overseen by BAFTA (British Academy of Film and Television Arts) the Albert consortium is the  
UK’s flagship thinktank on sustainability in film and television. We work with them to enable more 
creative organisations and production studios to cut their carbon emissions by switching to 100% 
renewable electricity.

Through Albert’s Creative Energy Partnership, Good Energy has already signed-up BAFTA as well as 
TV companies including Baby Cow Productions, Mammoth Screen and Directors UK to power their 
production spaces and head offices.

BAFTA’s Chief Operating Officer Kevin Price thinks industry needs to take a lead when it come the 
climate emergency.

“A long journey starts with a single step and I think what’s been brilliant 
about Albert is that every week we’ve got examples of progress 
being made. And those are all small steps towards a much bigger 
endeavour. The more steps we take the more confidence there is that 
we can make a difference.”

We work with a range of organisations 
created to promote sustainability in various 
industries, including:

We’re also proud to work with charities and 
organisations that share our commitment 
to tackling the climate crisis and creating a 
cleaner, greener future.

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Good Energy Annual Report 2019Strategic ReportGovernance ReportFinancial StatementsStrategic Report 
 
 
Ethical, sustainable procurement

We’re proud to be on the Ethical Consumer Best Buy list and strive to put ethical choices at the core of our 
business operations.

We also aim to procure day-to-day office essentials as sustainably as we can. Our coffee comes from 
Cool Earth, which supports indigenous communities to stand strong against rainforest deforestation. The 
coffee that we buy helps protect 168 acres of rainforest in Asháninka in the Peruvian Amazon, storing 1014 
tonnes of carbon.

Reducing our business’s environmental impact

Everything we do is about reducing society’s impact on the environment. But inevitably there are elements of 
running a business that do have an impact. We track and work to reduce these elements to make sure we’re 
treading as lightly on the planet as possible.

Measuring and mitigating our carbon emissions

We have achieved ISO14001 accreditation, which confirms that we’re meeting international 
standards for measuring and continually improving our environmental performance.

75.34

58.96

Corrected total 
449.52

374.18

476.08

Reported total
551.42

314.56

Total 
373.51

1. Direct emissions

2. Indirect emissions from electricity used 
  (0, due to 100% renewable electricity self-supply)

3. Indirect emissions such as employee 

travel & procurement

A correction to our 2018 figures

We work hard to make sure our emissions reporting is as detailed as possible. More up to date information 
about employee travel for 2018 became available, which has allowed us to provide corrected figures for 
the year.

2019 reductions

We’re pleased to report an emissions reduction of 12% between 2018 and 2019. This was mostly due to 
reductions in our Scope 3 emissions, which covers factors such as emissions of companies in our supply chain 
as well as employee travel. From our Green Travel Allowance to increased home working, we’re exploring 
ways to continue making progress in this area. We continue to neutralise emissions we can’t yet avoid by 
investing in the carbon reduction schemes we support through our carbon neutral gas.

How the Green Travel Allowance is driving 
down emissions

The daily commute can rack up a considerable cost not 
just in money, but in carbon. Colleen and Kira were looking 
to reduce theirs by car sharing.

In 2019 we introduced a Green Travel Allowance to 
reward people that choose a greener way to commute, 
whether that’s car sharing, driving an EV or travelling by 
public transport.

“It’s a great way to encourage people to think about how 
they travel”, says Colleen. “Car sharing just makes sense – it reduces your running costs and it means 
there’s one less car on the road”.

Thanks to our annual travel survey, we were able to measure that due to shifts in commuting, we were 
able to save 65 tonnes of carbon emissions. “It’s great to know that some relatively small changes to my 
lifestyle do actually have an impact”, says Kira.

“Being able to reduce my own carbon footprint in itself is a good feeling, but to get recognition from 
your employer for making the choice to travel sustainably is even better!”

48

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Good Energy Annual Report 2019Strategic ReportGovernance ReportFinancial StatementsStrategic Report 
Our social impact: an ethical business

From the moment people join Good Energy, we focus 
on providing all they need to work in a way that 
reflects our values: Straightforward, Inclusive, Fair and 
Determined. This is how we bring our purpose to life.

Here are just a few examples of how we put our 
values into action: 

• 

• 

• 

 Having an inclusive workplace with people 
of diverse backgrounds and characteristics. 
We include Diversity and Inclusion training in our 
induction programme, bringing this commitment 
to life in practical ways so that it can inform how 
we serve our customers and work together.

 Providing leadership training to all our managers 
in giving straightforward, useful feedback that 
encourages their teams to achieve their potential.

 Appointing Culture Champions from across 
the business to play a key role in developing 
our people policies, infrastructure, employee 
engagement initiatives and more. 

Fair pay

To reflect the skill level of our roles, our 
people receive a rate of pay that’s 
substantially above the wage set by the Real 
Living Wage Foundation. The pay for every 
role is benchmarked against equivalent jobs 
to make sure that we pay people fairly.

Supporting our local community

Good Energy is based in Chippenham, 
Wiltshire. As well as being one of the 
biggest employers in the area, we’re always 
exploring ways to have a positive impact on 
our surrounding community. We continued 
our sponsorship of Chippenham Rugby 
Football Club, supported town cultural events 
and teamed up with local schools to talk 
about clean energy, climate change and 
careers in STEM subjects.

Gender equality

Gender pay gap reporting

We’re committed to tackling our gender 
pay gap and making sure we have an 
equal gender balance at all levels of our 
organisation. Our overall workforce is made 
up of 52% women to 48% men.

We already have equal numbers of men 
and women in our most senior board and 
executive team roles. We are working 
towards a balanced gender split in our 
middle management roles, aiming to have 
a senior leadership team that is at least 30% 
female by April 2022.

Our mean gender pay gap for 2019 was just 
under 27%. The reason we have a pay gap is 
that we have fewer women than men within 
our middle manager population, particularly 
in science, technology, engineering and 
maths (STEM) related roles. To close the 
gap, we’re stepping up our efforts to recruit 
women in this area and develop more 
women within the business to middle and 
senior management.

Women in energy

Our CEO, Juliet Davenport, started Good 
Energy in a market dominated by men. 20 
years later and out of over 50 UK energy 
suppliers, you can still count the number led 
by women on one hand. 

Promoting the next generation of women to 
take on STEM subjects is a key part of fixing 
this problem. That’s why we have teamed 
up with the STEMettes, a UK social enterprise 
seeking to encourage more girls to pursue 
careers in science, technology, engineering 
and maths.

2019 was our second year of collaborating 
with the charity which involved a workshop 
with local secondary schools in Wiltshire. The 
day-long event included a mini-hackathon, 
app designing and talks from women across 
the company.

“It is vital to run stem experience days  
with companies like good energy 
because only 21% of the UK’s stem 
workforce is female. Stemettes’ mission is  
to raise this number to more than 30%.”

Lucy Cox, Community & Schools Manager, 
Stemettes

Education

Working with schools

As sustainability issues are a regular part 
of the school curriculum, Good Energy’s 
experience as an ethical company is sought 
after. Our people often go into local schools 
to give talks about climate change and 
renewable energy, and over the past year 
our experts have spoken to hundreds of 
students. We are building on this work to 
create a wider educational programme for 
primary and secondary schools.

Working with universities

Physical wellbeing

We offer a range of benefits designed to support our 
people’s wellbeing: lunchtime sports clubs, subsidised 
local gym memberships, showers and bike lock ups 
to support active commuting – as well as a health 
insurance scheme which gives people financial 
support towards medical and wellbeing treatments.

By supporting green travel for our people and 
working to improve access to clean transport more 
widely, we’re also playing our part in improving air 
quality in towns and cities. 

Good Energy CEO, Juliet Davenport, 
regularly speaks at events for students and 
higher education professionals. In 2019 she 
spoke for MBA students at the Said Business 
School, discussed the future of the retail 
energy sector at the Aurora Spring Forum 
at the University of Oxford and spoke at the 
Sustainability in Higher Education conference 
at the University of Wales. Juliet also featured 
on a panel about reducing urban transport 
emissions through building links with the 
renewable energy sector as part of the 
London School of Economics Cities Series.

Health

Mental health and wellbeing

In the UK, around one in four of us will 
experience mental ill health in any year, 
and we want to make sure our people 
feel comfortable asking for support 
when they need it.

We already offer free access to 
counselling services through our Unum 
Lifeworks Employee Assistance programme. 
We have also teamed up with MHFA 
England to train 11 people across the 
business to be mental health first aiders, as 
well as offering mental health awareness 
training to every one of our people. 

Building on this, in 2019 we worked with 
the Time to Change social movement, 
to endorse their mental health pledge. 
By signing the pledge, businesses agree 
to change the way they think and act 
about mental health at work.

“We want to make sure mental health is recognised as being as important as physical 
health. And our mental health first aiders are there to give people a helping hand. This 
could simply mean having a chat over a cup of coffee or offering advice on how to 
access further support.”

Fran Woodward, Director of People & Culture

50

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Good Energy Annual Report 2019Strategic ReportGovernance ReportFinancial StatementsStrategic ReportVoice: providing a platform 
for change

We have always stood for action against 
the climate crisis - and for enabling people 
to take action themselves. In 2019, we 
were inspired by the rise of the youth 
climate strike movement sparked by Greta 
Thunberg’s solo school strike. 

COP25

Our CEO and Founder Juliet Davenport spoke at 
the UN’s global climate conference COP25 in Madrid. 
Taking part in a panel as part of the Energy Action 
Event, Juliet explained that “one of the roles of an 
organisation like Good Energy, is to be in the room 
when we are talking about possibilities.”

As the school strike movement continues to grow, 
we want to amplify their message. We worked with 
our local youth climate group in Bath, arranging a 
takeover of our social media feeds on the day of 
the first global school strike in March 2019. We also 
posted an interview with a youth climate activist 
on our blog, and attended the September global 
climate strike to interview protesters and share their 
views. We have continued to support the strikes, 
including encouraging our people to attend the strike 
in Bristol March 2020 to hear Greta Thunberg speak. 

“In my last job I had to take a day 
off work to go on the last climate 
strike. My passions are now aligned 
with my company’s and I hope that 
as a collective we can encourage 
more people to show their support 
for making a difference”.

Johanna Pettipher, Good Energy 
Accounts Specialist

Sponsoring the first Local Conference of Youth

In November, we were the exclusive sponsor of 
the first UK Local Conference of Youth, part of an 
international programme coordinated by the United 
Nations Framework Convention on Climate Change.

Run for and by young people, over the course of a 
weekend attendees worked together to shape a 
policy proposal for tackling climate change. This 
fed into a global Conference of Youth policy to help 
inform the agenda for COP25, which took place 
the following month in Madrid. 

As well as sponsoring the event, Good Energy 
ran a workshop introducing renewable energy, 
clean technologies and our vision for a 100% 
renewable Britain.

Engaging customers in our purpose

Many of our customers are committed to helping 
create a cleaner, greener future in any way they can. 
We aim to share news of how the energy industry is 
changing and, when we can, encourage people to 
stand alongside us in driving change ourselves.

In 2019, we challenged the proposed tax increase on 
low carbon energy generation and storage systems 
to 20% - while coal was set to remain at 5%. After 
setting up a petition we went out to our customers, 
who helped us secure over 18,000 signatures. 
Unfortunately, the planned tax increase is set to go 
ahead. But we won’t give up the fight for a zero 
carbon Britain. And neither will everyone that has 
joined us. 

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52

Strategic report

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Good Energy Annual Report 2019Strategic ReportGovernance ReportFinancial StatementsStrategic Report 
 
 
Our people

We couldn’t work towards reaching 100% renewable energy without the dedication and 
expertise of our people. Get to know some of them – from their roles here at Good Energy 
to how they put our commitment to being green into action outside the office. 

Robbie

Trading Analyst, Trading 
& Portfolio Management

Robbie first walked into 
the Good Energy office for 
his school work experience 
at age 16. After studying 
climate science at university, 
he came back to join us. 
Starting in our domestic Feed-in Tariff 
team, Robbie moved into Levelisation to work on 
claiming FiT payments and paying them out to our 
140,000 FiT sites. He’s now part of the trading team 
and loves the new challenges this presents.

“The best part of my job is how my role naturally 
keeps me up-to-date with the world, energy 
market and policy. That and being able to work 
with lots of other like-minded people keeps me 
feeling really immersed and interested every day.

I like to think I’m pretty green. I walk or catch 
the train almost always. And I’m a Good Energy 
customer for power and gas – and have solar 
panels on my roof.”

India

Employee Engagement 
Coordinator and Personal 
Assistant to Fran Woodward, 
People & Customer 
Operations Director

From sourcing on brand hard 
hats to arranging ‘pint pulling’ 
training for the Exec team ahead 
of company parties, no two days are 
the same for India. Her role is focused on making 
sure everyone at Good Energy feels like part of 
one team – and can get together to celebrate our 
successes. India also works with our team of Culture 
Champions, who explore ways to make sure Good 
Energy is an engaging, supportive place to work.

“The best part of my job is how wide ranging it is. 
I love that every day is completely different.

My whole career so far has been spent in 
renewables. My first job out of university was as a 
renewable energy planner. There are a couple 
of wind turbines that I got planning permission for 
in Cornwall. Today, as well as working at Good 
Energy I’m a customer and shareholder.”

Nicola

Senior Operations Manager, 
Customer Operations

It’s safe to say that Nic is 
good with people. Having 
worked at Good Energy 
for six years heading up our 
business account management 
and sales support teams, 
she also volunteers for a mentoring 
charity. Nic’s latest role includes supporting the 
implementation of our new billing system. Every day, 
she and the team focus on providing our business 
customers with the best possible service, which is 
what keeps many with us for the long term.

“It’s amazing when the team receive feedback 
directly from customers and I get the chance 
to read or hear it. It makes me so proud to work 
with them.

When it comes to being green in my own life, 
like most people I’m reducing how much plastic 
I buy and try to recycle what I can. I’ve have also 
changed all the bulbs in my house to LED to save 
on energy and I turn absolutely everything off!”

Connor

Service Desk Analyst 
Apprentice, IT & Digital

At Good Energy we’re 
pleased to support the 
apprenticeship scheme, 
which Connor joined us 
through in 2019. As a Service 
Desk Analyst, Connor helps make 
sure our people have the IT equipment 
and software they need to do their job.

“I’ve always wanted to go down the 
apprenticeship route as I just wanted to get stuck 
into working life. The best part of what I do is 
getting the satisfaction of fixing something and 
knowing that I’m helping someone by making 
their job easier.

I do my best to recycle and put rubbish in 
the right bins. I also walk to work and, at the 
moment don’t drive.”

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Good Energy Annual Report 2019Strategic ReportGovernance ReportFinancial StatementsStrategic ReportGovernance Report

Board of Directors 

Governance & Directors’ Report 

Audit & Risk Report

Remuneration & Nomination Report 

Independent Auditors’ Report

 58

 60

 71

 75  

 88

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Good Energy Annual Report 2019

Good Energy Annual Report 2019Board of Directors

William (Will) Whitehorn – Non-Executive Chairman            
(Independent)

Will focuses on fast-moving and growing companies, with extensive 
experience across a broad range of sectors, especially in technology, 
digital and branding.

Will currently holds a number of other Non-Executive roles across a range 
of companies, including Stagecoach Group PLC, where he is Deputy 
Chairman, and space technology company AAC Microtec of Sweden. He 
is also Chairman of Craneware PLC and the Scottish Event Campus, host 
of COP 26. He was also one of the founding shareholders of Purplebricks 
Group PLC. He has recently joined the Royal Air Force Board as a Non-
Executive Director, with the rank equivalent to Air Vice-marshal. 

Skills and Expertise: Will spent more than 20 years with Virgin Group, where 
he was responsible for global brand development and corporate affairs. He 
also played a key role in founding several Virgin businesses including Virgin 
Rail and Virgin Galactic and was special advisor to Sir Richard Branson.

Juliet Davenport – Chief Executive Officer

Juliet is founder and Chief Executive Officer of Good Energy – a 
renewable energy company with a mission to power a greener, cleaner 
future together with its customers. Juliet has been an innovator for over 
20 years, developing technologies and innovations to fight climate change 
and transform the energy sector for the better. In 2013, she was awarded 
an OBE for services to renewables. She currently sits on the board of the 
Renewable Energy Association, Innovate UK and is Vice President of the 
Energy Institute. In addition, she sits on the advisory boards of leading UK 
think tanks, including Energy Systems Catapult, Aurora, Oxford Energy, and 
LSE’s Grantham Institute.

Skills and Expertise: Worked for a year at the European Commission on 
European energy policy, then at the European Parliament on carbon 
taxation and holds a masters in environmental economics.

Rupert Sanderson - Chief Financial Officer

Rupert joined us in February 2017 and is responsible for all finance, legal 
and trading matters, including managing our financial stakeholders. Having 
worked widely in larger support services and energy organisations as well 
as in supporting smaller organisations through growth programmes, Rupert 
brings valuable experience to Good Energy as it develops its services and 
propositions. His previous roles include senior financial and commercial 
positions at Centrica, British Gas, Serco and Avis Europe.

Rupert began his career as an accountant for PwC and is a Fellow of the 
Institute of Chartered Accountants in England and Wales.

Joined Board:   
July 2018

Responsibilities: 
Chairman of the Board 
(effective June 2019)

Member of Nominations 
& Remuneration 
Committee and 
Member of Audit & Risk 
Committee

Appointed CEO:   
2002 

Joined Board:   
January 2020

58

Joined Board:   
September 2016

Responsibilities: 
Chair of Nominations & 
Remuneration Committee

Member of Audit & Risk 
Committee

Joined Board:   
December 2017

Responsibilities: 
Member of Audit & Risk 
Committee 

Member of Nominations & 
Remuneration Committee

Joined Board: 
February 2019

Responsibilities: 
Chair of Audit & Risk 
Committee

Member of Nominations & 
Remuneration Committee

Emma Tinker – Non-Executive Director (Independent)

Emma is a private equity investment Director who brings a wealth of 
investment experience. She is a Director of numerous renewable energy 
companies, established the renewable energy business at HG Capital in 
2002 and founded Asper Investment Management in 2016 as the spin-
out of that business where she is Chief Investment Officer. She has been 
a Director for renewable developers and independent power producers, 
working across a range of renewable technologies. Emma is also a Director 
of the Gardeners’ Royal Benevolent Society.

Skills and Expertise: Has substantial commercial experience spanning the 
entire lifecycle of investments in energy businesses, and has worked across 
a range of renewable technologies.

Timothy (Tim) Jones – Non-Executive Director (Independent)

Tim was appointed Non-Executive Director in December 2017.  Tim 
is an experienced Technology Executive who brings over 20 years 
of digital innovation, execution and operation. Tim has been CIO of 
Moneysupermarket Group PLC since 2013, Insurance Times CIO of the 
Year in 2014 and a regular member in the top 20 of the annual CIO 
100.  Prior to joining MoneySupermarket, Tim was co-founder and an 
Executive at AutoTrader UK, the internet media marketplace giant one 
of the UK Digital ‘Unicorns’ alongside AO.com, Skyscanner and of course 
MoneySupermarket.com.

Skills and Expertise: Depth of experience in leading digital development 
with companies.  Tim is currently responsible for delivering innovative 
consumer propositions in the highly regulated verticals of insurance, 
financial services, energy, telecommunications and travel.

Nemone Wynn-Evans - Non-Executive Director (Independent)

With extensive experience in the financial services sector, Nemone 
brings a broad range of skills across audit, risk management, business 
development, corporate finance, corporate governance, investor relations 
and marketing. She is currently Chair of the Risk Committee, a member 
of the Audit Committee and is Senior Independent Director of Shepherds 
Friendly Society. Nemone also holds a number of roles across a range of 
companies, including as a Non-Executive at Hinckley & Rugby Building 
Society where she sits on both the Audit & Risk Committees, is a Board 
Advisor at SORBUS Partners LLP and is a member of the Commercial 
Advisory Committee at Coventry University. She is also a Fellow of the 
Chartered Institute of Securities and Investments.

Skills and Expertise: Nemone began her career in the City of London  
and has worked with many listed PLC and PRA/FCA/FSA regulated 
companies, having acted as a Finance Director on the main board of a 
stock exchange.

59

Strategic ReportGovernance ReportFinancial StatementsGood Energy Annual Report 2019Governance ReportGovernance & Directors’ report

Overview

Good Energy is committed to high standards of 
corporate governance and places good governance 
at the heart of the business. In July 2018, the Board 
of Good Energy formally adopted the Quoted 
Companies Alliance’s (“QCA”) code of corporate 
governance (“the Code”) in line with requirements of 
the London Stock Exchange’s AIM Rules. The Board 
believes that the QCA Code provides the Company 
with a rigorous corporate governance framework 
to support the business and its success in the long-
term. The Code sets out 10 corporate governance 
principles. The ways in which Good Energy meets 
these principles is described in the following sections 
and incorporates information about the ways in which 
the Board discharges its duties under the Companies 
Act 2006, s172. This is also available to view on our 
website at group.goodenergy.co.uk.

1. Establish a strategy and business 
model which promote long-term value for 
shareholders

Good Energy is a different kind of energy company, 
powering the choice of a cleaner, greener future 
together. Guided by our principles and values, Good 
Energy has a track record of successfully challenging 
the way things are done, putting power back into the 
hands of families, communities and businesses across 
the country. 

In establishing Good Energy’s strategy, the Board 
considered the long-term interests of Good Energy’s 
stakeholders and set a course which aligns those 
interests with those of the Company, promoting the 
long-term interests of the Company and long-term 
value for shareholders. 

Good Energy’s strategy seeks to accelerate the 
transition towards energy as a service, facilitating a 
clean, secure and affordable energy future which 
benefits energy consumers as a whole and reduces 
environmental impacts from the energy lifecycle. The 
Strategic Report describes Good Energy’s strategy in 
more detail.

Good Energy is well positioned to deliver long-term 
value for shareholders through the implementation of 
its strategy, focusing on:

•  Customers - putting the customers at the heart of 
everything that we do and striving to make clean 
energy the natural choice

Energy technology – leveraging technology for 
the benefit of our customers, driving engagement  
and growth by putting customers in control of  
their energy usage 

Experts – making sure we attract and retain the 
right people, in the right roles, to deliver for our 
customers and realise our strategic ambitions

• 

• 

60

• 

Partnerships – innovating and accelerating 
our growth potential through key strategic 
partnerships

Good Energy has aligned its business model to better 
enable delivery of its strategic ambitions. We have 
engaged our people through ongoing communication, 
using multiple channels to reinforce the pioneering, 
agile culture that enables Good Energy to continue to 
innovate and drive change.   

The Strategic Report describes the excellent progress 
Good Energy has made in pursuit of its strategic 
ambitions and the momentum we are building to 
deliver the energy market of the future.

2. Seek to understand and meet shareholder 
needs and expectations

Good Energy is proud to have a diverse shareholder 
base, including a significant proportion of private 
shareholders (many of whom are also Good Energy 
customers) and other long-term investors. The Board 
seeks to understand the needs and expectations of 
its stakeholders, particularly shareholders, through 
insight gained from regular customer surveys and 
focus groups, periodic investor surveys and obtaining 
structured feedback from investor roadshows. Good 
Energy’s strategy responds to the insight gained 
through these consultations.

Good Energy provides shareholders and other 
stakeholders with relevant information in a timely 
and balanced manner and meets with its largest 
shareholders periodically to understand their views 
on Good Energy’s performance and future plans. 
Good Energy actively encourages shareholders 
to participate in its AGM as an opportunity for all 
shareholders to share their views openly with the 
whole Board and other shareholders. 

3. Consider wider stakeholder and social 
responsibilities and their implications for 
long-term success

The Board recognises its primary legal responsibility 
to promote the success of the Company for the 
benefit of its members as a whole, taking into 
account the interests of other stakeholders including 
customers, employees, partners, suppliers, regulators, 
the environment and the local communities in which 
Good Energy operates. Interpreting this responsibility, 
and in line with recommendations published by the 
GC 100, the Board considers that its duty is not to 
balance the interests of the Company and those of 
other stakeholders identified but instead to determine, 
after weighing up the relevant factors, the course of 
action it considers best leads to the long-term success 
of the Company. 

level. Our risk identification and mitigation processes 
have been designed to be responsive to the changing 
environment in which we operate. The impact of 
emerging risks on the Company’s business model  
are also considered and used to make informed 
decisions, including as to the delivery and evolution of 
our strategy. 

Key Risks faced by the Company are described in 
the Strategic Report. While the risks are typical of the 
risks faced by other energy suppliers, we believe the 
Company is well positioned to mitigate these through 
a combination of our risk management processes, 
our control activity and the strategic direction we  
are pursuing.

Further information on risk management and controls 
are described in the Audit & Risk Committee Report 
on page 71. 

5. Maintain the Board as a well-functioning, 
balanced team led by the Chair

The Board currently comprises two Executive and 
four Non-Executive Directors as described on pages 
58-59. The roles and responsibilities of the Chairman, 
Non-Executive Directors, Executive Directors and the 
Company Secretary are clearly defined and regularly 
reviewed. Details of current roles and responsibilities 
are set out in the table overleaf.

The Nominations & Remuneration Committee 
discusses members time commitments from Directors, 
particularly Non-Executive Directors. Over the period 
Non-Executive Directors spent 20-25 days with Good 
Energy, the latter if they are Chair of a Committee. 

Purpose-led from the outset, Good Energy continues 
to prove that the “other way” is better:

• 

In recognition of the many ways in which we 
continue to support renewable energy generation 
across the UK, we secured a permanent 
derogation from OFGEM’s price cap in  
August 2019

•  We source all our electricity from certified 

renewables such as solar power, wind power, 
hydroelectric power and biofuels. We always  
have and always will – no other UK energy 
supplier can promise that. Our gas is carbon 
neutral too: 6% comes from biomethane and 
we offset the rest through the Green Gas 
Certification programme. We aren’t only 
interested in reducing carbon emissions though. 
The projects we select deliver wider benefits in 
their local communities, including tackling local 
poverty and empowering local women

•  We were named “best green electricity supplier” 

and one of the UK’s most ethical companies of 
the last 25 years by Ethical Consumer Magazine

•  We are also proud to have been an accredited 

Living Wage employer since 2015

Establishing the right culture is an integral part of 
delivering Good Energy’s strategy. More information 
on this is outlined below. 

You can find out more about where and how we 
source our energy, how we look after our people and 
how we treat our customers in the Strategic Report 
and at: group.goodenergy.co.uk.

As a purpose-led business, we aspire to be as 
transparent as possible about our activities. The 
Strategic Report describes what we’ve been doing 
to deliver our mission and reflects on our progress 
towards achieving our purpose.

4. Embed effective risk management, 
considering both opportunities and threats, 
throughout the organisation

Good Energy recognises that effective enterprise 
risk management is critical to enable it to meet its 
strategic objectives.

We have a clear framework for identifying and 
managing risk, both at an operational and strategic 

61

Strategic ReportGovernance ReportFinancial StatementsGood Energy Annual Report 2019Governance Report 
The Board

Role of the Board

Chairman 
William Whitehorn

• 

• 

• 

• 

 Setting Group strategy and 
objectives in collaboration with the 
Executive.

 Providing leadership, knowledge and 
experience to support and guide 
the Executive.

• 

• 

Engaging with shareholders.

 Overseeing and monitoring business 
performance, internal controls, 
corporate governance and risk 
management.

 Oversight of principal risks – including 
competitive position, political risk and 
programme delivery.

 Effective running of the Board 
and its Committees in accordance 
with principles of good 
corporate governance.

•  Managing the Board to ensure 

adequate time is allocated at Board 
meetings for discussion of all agenda 
items.

• 

Setting the Board agenda.

• 

Ensuring the Board receives 
accurate, timely and clear 
information.

Other Non-Executive 
Directors

• 

Providing knowledge, skills and external experience to support the Chairman 
and the Executive.

Chief Executive 
Juliet Davenport

•  Overseeing the day-to-day 

• 

operation of the Group’s business.

•  Developing and implementing the 

 Establishing and maintaining formal 
and appropriate delegations of 
authority.

Group’s strategy as approved by the 
Board.

•  Maintaining a close working 

relationship with the Chairman.

Chief Financial 
Officer 
Rupert Sanderson

Role of the Company 
Secretary 

• 

• 

• 

• 

 Developing and implementing the 
Group’s strategy as approved by the 
Board.

•  Overseeing and managing financial 
resources for the Group and its 
subsidiaries.

Establishing and maintaining formal 
and appropriate delegations of 
authority.

•  Maintaining a close working 

relationship with the Chair of Audit & 
Risk Committee.

• 

 Providing governance, advisory and 
administrative support to the Board 
and its Committees.

The Board and each Director has 
unlimited access to the Company 
Secretary. Eversecretary Limited has 
served as the Company Secretary 
since 2 January 2020 and is 
responsible for:

 Acting as Secretary to the Board and 
its Committees, ensuring compliance 
with Board procedures and 
corporate governance requirements, 
Directors’ induction and ongoing 
training requirements.

Other information:

• 

• 

• 

The roles of Chairman and Chief Executive have 
always been split with the Chairman acting in a 
non-executive capacity.

The Executive Directors are accountable to 
the Board for the operating and financial 
performance of the Group.

The Board is also responsible for approving the 
appointment of Executives, setting Executive 
remuneration and devising incentive programmes, 
agreeing financial and accounting policies and 
ensuring that the shareholders are properly 
informed about the state of the businesses. 
In addition, the Board is responsible for the 
appointment and removal of the Company 
Secretary.

•  At the end of the reporting period, the Board 

comprised the Chairman, Chief Executive Officer, 
and four Non-Executive Directors, each of whom 
the Board considers to be independent. In January 
2020 the Chief Financial Officer joined the Board.

• 

• 

The Board is satisfied that it currently has a 
sufficient range of relevant operational and 
financial experience to be able to discharge its 
responsibilities.

The Board has constituted two Committees: 
Audit & Risk and Nominations & Remuneration. 
Both Committees comprise only Non-Executive 
Directors.

•  One of the Directors has a substantial 

shareholding in the Company, in aggregate 
representing approximately 3.8% of the issued 
capital. All current Directors hold shares in the 
Company although the Company does not 
require them to do so. 

6. Ensure that between them the Directors 
have the necessary up-to-date experience, 
skills and capabilities

The Board is satisfied that it has an appropriate 
balance of skills and experience as well as an 
appropriate balance of personal qualities and 
capabilities to deliver the Company’s long-term 
strategic objectives. The Board is committed to 
maintaining balanced representation of both women 
and men across the organisation, including at Board 
level and within the Executive team.

The Board regularly reviews its composition and 
that of its Committees to ensure it has access to 
diverse perspectives and the necessary up-to-date 
experience, skills and capabilities to discharge its 
duties effectively. The Board also reviews the length 
of time each Director has served on the Board and 
assesses if contributions made by each Director 
remain effective, Details of the Director’s tenure can 
be found on page 77. 

Changes are made to the composition of the Board 
and its Committees to ensure the right balance of 
complementary skills and capabilities for the next 
phase of Good Energy’s growth, which can be found 
on page 67.

Further information about the Board, including 
biographies describing each Director’s experience,  
are set out on pages 58-59. 

The Company encourages each Director to identify 
their individual training needs to support the effective 
operation of the Board and the delivery of the 
Company’s strategy. The Company provides specific 
training on renewable energy and energy markets both 
in house and using external providers as appropriate. 
Over the period, the Board have also received briefings 
on a variety of topics including developments in 
corporate governance and appropriate handling of 
personal data, insight from shareholders, customers 
and staff on their views and expectations of Good 
Energy as well as formal briefing from the Company’s 
nominated adviser on updates to the AIM rules and 
other capital markets matters.  

Procedures are in place to enable individual Directors 
to seek independent advice at the expense of the 
Company and appropriate cover is in place. The  
Board and its Committees may take external advice  
as appropriate.

Over the period, the Board and the Executive team 
have worked together to evolve the flow of information 
to the Board. This has resulted in simpler, insight-
focussed reporting to facilitate effective debate and 
enable robust and timely decision-making.

7. Evaluate board performance based 
on clear and relevant objectives, seeking 
continuous improvement

The Board conducts an annual evaluation process 
to assess its effectiveness, as well as that of its 
Committees and the individual Directors, to drive its 
continuous improvement. The process is described in 
more detail on page 69, together with the Board’s key 
areas of focus for the current year and progress made 
towards previous objectives. 

8. Promote a corporate culture that is based 
on ethical values and behaviours

The Board recognises the importance of its role in 
promoting and monitoring the Company’s desired 
culture and ensuring it is consistent with the Company’s 
long-term strategic objectives.

Good Energy is a different kind of energy company. 
Our core values - fair, straightforward, determined  
and inclusive – underpin the delivery of our  
purpose to power the choice of a cleaner, greener 
future together.

62

63

Strategic ReportGovernance ReportFinancial StatementsGood Energy Annual Report 2019Governance ReportWe were named “best green electricity supplier” and 
one of the UK’s most ethical companies of the last 
25 years by Ethical Consumer Magazine. We are 
also proud to have been an accredited Living Wage 
employer since 2015.

Further information is set out within the Strategic 
Report on pages 50-52 and the Nominations & 
Remuneration Report on pages 75-81. 

Good Energy operates on the principle that a 
workplace where people’s differences are valued 
creates a more productive, innovative and effective 
organisation. We also recognise that attracting, 
retaining and incentivising key talent is integral to its 
ability to meet its strategic objectives.

The Group’s employment policies follow best practice 
based on equal opportunities for all employees, 
irrespective of race, gender, nationality, sexual 
orientation, disability, marital status, religion or age. 
All decisions relating to employment are objective, 
free from bias and based upon work criteria and 
individual merit. Consultation with employees or their 
representatives has continued at all levels, with the 
aim of ensuring that views are taken into account 
when decisions are made that are likely to affect 
their interests and that all employees are aware of 
the financial and economic performance of  
the business.

More information about our performance on gender 
pay and our approach to modern slavery can be 
found on the relevant pages of the Company’s 
website at group.goodenergy.co.uk. 

Good Energy completed a group-wide upgrade of 
its control environment in 2015, introducing a code 
of conduct: a ‘Guiding Principles’ approach that is 
appropriate for a fast-growing business. By design, 
our Guiding Principles reflect the Board’s duties under 
the Companies Act 2006, s172. This ensures everyone 

who works at Good Energy reflects our ethos and 
values when working together and that our policy 
and procedural framework supports the Board in 
discharging its duties.

Our Guiding Principles:

• 

• 

provide a framework to empower Good Energy 
employees to make informed decisions that 
are in the best interests of the Company and its 
customers and other stakeholders

reflect the environment in which the Company 
operates

•  mitigate risk

• 

explain where our employees can get advice. 

More details on Our Guiding Principles can be found 
under Principle 10.

9. Maintain governance structures and 
processes that are fit for purpose and 
support good decision-making by the Board

Good Energy’s governance structures support its 
corporate culture and are appropriate to its stage 
of development and the complexity of the business. 
The Board has established a Nominations and 
Governance Committee and an Audit and Risk 
Committee to support effective governance 
and decision-making. 

The key areas for focus for the Committees are listed 
on the next page.

The Board continuously monitors the effectiveness of 
its governance structures, enabling them to evolve 
over time to support the Good Energy’s growth  
and development.

Gender 
Diversity1

Balance of 
the Board1

Non-Executive 
Tenure1

Non-executive

Executive

0-2 Yrs

2-5 Yrs

Female

Male

1. Data as at 31 March 2020.

64

The Board’s Committees

Nomination & Remuneration Committee

Audit & Risk Committee

Board Composition

Corporate Governance

Succession planning

Financial Reporting

Board nominations

Internal Controls

Remuneration policy

Risk Management

Incentive design and target setting

External Auditor

Executive remuneration review

Oversight of principal risks

10. Communicate how the Company is 
governed and is performing by maintaining 
a dialogue with shareholders and other 
relevant stakeholders

As described above, the Board considers that its duty 
is not to balance the interests of the Company and 
those of other stakeholders but instead to determine, 
after weighing up the relevant factors, the course 
of action it considers best leads to the long-term 
success of the company. Good Energy welcomes 
dialogue with shareholders, particularly the need for 
open communication on the Company’s strategy and 
takes care to calibrate perspectives expressed by 
individual members in the context of Good Energy’s 
members as a whole. 

Principal communications with shareholders are 
conducted through the Annual and Interim results, 
AGM and interim RNS announcements on key 
business developments. Good Energy supplements 
its Annual and Interim results with presentations 
to analysts and other interested stakeholders (all 
available on its website) and meets with larger 
shareholders at least twice annually to discuss  
both performance and governance, as well as our 
future plans. 

The Board actively encourages shareholder 
participation at its Annual General Meeting and other 
general meetings from time to time. 

Good Energy’s Investor Relations team supports 
effective communications with shareholders 
and other investors and can be contacted at:          
investor.relations@goodenergy.co.uk.

The Board also recognises the importance of ensuring 
that the Company maintains effective engagement 
with other stakeholders and taking into account the 

interests of internal and external stakeholders when 
making decisions at Board level. Examples of ways in 
which Good Energy maintains active communication 
with other stakeholders include:

Customers:

• 

• 

updating customers on Good Energy’s activities 
through regular newsletters, communications via 
digital platforms and publication of content on 
goodenergy.co.uk and on the Company’s social 
media channels;

hearing customers views and expectations of 
Good Energy through thematic assessment of 
customer contact, gathering in the moment 
feedback from customers during or immediately 
following calls, conducting periodic consumer 
focus groups and regular customer surveys; and

• 

involving customers in trials of new products and 
services.

People

• 

engaging our people regularly with Good 
Energy’s purpose and performance through 
structured, regular briefings and discussion 
forums throughout the year;

•  maintaining regular engagement with our people 
both individually and through an established 
group of employee champions from across the 
business;

• 

• 

encouraging information sharing and debate via 
our internal communications portal, Good Hub; 
and

conducting semi-annual engagement surveys 
and taking into account the feedback received.

65

Strategic ReportGovernance ReportFinancial StatementsGood Energy Annual Report 2019Governance ReportBondholders

Policy-makers and regulators

Board and Committee composition

• 

progress updates are provided via the Company’s 
websites, investor newsletters and periodically as 
part of other communications to bondholders, for 
example within letters enclosing notice of interest 
payments. 

Delivery partners and suppliers

• 

operating a tailored approach to support the 
development and maintenance of strategic 
relationships.

Local communities

•  maintaining open relationships with local 

authorities and key business groups in Wiltshire 
and the South West;

• 

continuing our engagement with communities 
hosting Good Energy’s renewable generation 
assets; and

• 

providing talks in local schools

The Board and its Committees

The Board is ultimately responsible to shareholders 
for the direction, management and performance of 
the Company and its business.

Biographies of the Board’s Directors are set out 
pages 58-59. Details of the Directors’ remuneration, 
including share options, are set out in the 
Nominations and Remuneration report on pages 
75-81. Details of the Directors’ interests in ordinary 
shares in the capital of the Company are set out on 
page 84 under Statutory and other information.

The Board maintains a list of matters reserved for  
its approval, generally being those items which affect 
the shape, risk profile or strategic direction of the 
Group, as well as the key financial items. The Board 
reviews this schedule annually and it is updated  
as necessary. 

•  maintaining a constructive dialogue with policy-
makers on matters relevant to Good Energy’s 
strategy and current operations;

• 

• 

regular engagement with the energy regulator, 
Ofgem, both bilaterally as well as through public 
consultations and industry forums; and

targeted participation in industry groups aligned 
to Good Energy’s purpose, values and strategy.

The Board has established two principal committees 
which focus on particular areas as set out below.  
The Chair of each Committee reports to the Board  
on its activities after each Committee meeting. 
Reports from each Committee are included later in 
this section.

Matters that are not reserved to shareholders, the 
Board or one of its Committees are the responsibility 
of the Executive Directors who have established and 
maintains a documented schedule of delegations 
of authority to members of the Executive and 
other management. This delegation of authority 
is incorporated within the Company’s Guiding 
Principles. The delegation of authority includes a 
detailed authorisation matrix covering financial limits 
and approvals needed when conducting business on 
behalf of the Group.

The following table sets out the composition of the Board and its committees as at 31 December 2019, 
planned changes for 2020 and those serving during the year:

Board

Nominations & 
Renumeration

Audit & Risk  
Management

Juliet Davenport (CEO)

Rupert Sanderson (CFO)

Will Whitehorn (Chairman)

 2

–

–

Emma Tinker (Non-Executive)

Tim Jones (Non-Executive)

Nemone Wynn-Evans  
(Non-Executive)

Former Directors

John Maltby (former Chairman)

–

–

 3

  Chair 

  Member 

–  Not applicable/invitation only

Board & Committee Changes

As part of its annual evaluation process and 
otherwise as required, the Board reviews its 
composition to ensure that the Group has access to 
a balance of complementary skills and experience 
to enable the Group to achieve its strategic 
ambitions and wider purpose.

As previously reported, during the year, the Board 
was pleased to announce the appointment of 
Will Whitehorn to the role of Deputy Chair and 
independent Non-Executive Director in July 2018. 
Following the AGM in June 2019, Will assumed the 
role as Chairman of the Board.

As previously reported, Nemone Wynn-Evans 
assumed the Chair of the Audit & Risk Committee 
following completion of her induction to Good 
Energy in June 2019. 

During the year, the Board decided there was no 
benefit from the Funding & Investment Committee 
so this was discontinued. Any funding and investment 
decisions are now made by the Board.

Rupert Sanderson, Chief Financial Officer, was 
appointed to the Board on 2 January 2020.

Independence of the  
Non-Executive Directors

The Board conducts an annual review of the 
independence of the Non-Executive Directors and 
considers all of its Non-Executive Directors to be 
independent in both character and judgement. 

The Chairman, Will Whitehorn, was independent 
upon appointment to the Board in July 2018.

66

67

2. Assumed Chair following 2019 AGM  
3. Following completion of induction to Good Energy in June 2019 

Strategic ReportGovernance ReportFinancial StatementsGood Energy Annual Report 2019Governance ReportDirectors’ Indemnities and Insurance

As permitted by the Company’s Articles of Association, the Directors have the benefit of an indemnity 
which is a qualifying third party indemnity provision as defined by Section 234 of the Companies Act 2006. 
The indemnity was in force throughout the last financial year and is currently in force. The Company also 
purchased and maintained throughout the financial year Directors’ and Officers’ liability insurance in respect 
of itself and its Directors and Officers.

Board and Committee Attendance

Board

Audit & Risk  
Committee

Nominations & 
Remuneration 
Committee

Executive Directors

Juliet Davenport

Non-Executive Directors

Will Whitehorn

Emma Tinker

Tim Jones4

Nemone Wynn-Evans5

Former Directors6

John Maltby

8/8

8/8

8/8

7/8

8/8

4/5

4/4

4/4

4/4

2/4

4/4

1/2

2/2

2/2

2/2

1/2

1/1

1/1

4. Tim Jones was unable to attend due to prior business committements 

5. Nemone Wynn-Evans has attended all meetings since her appointment to the Board and its Committees 

6. For members retiring during the year, the table reflects those meetings applicable to their tenure

68

for the forthcoming year is reviewed and authorised 
by the Board.

The Board and each of its Committees have access 
to the services of the Company Secretary and 
external advisers as necessary.

Executive Team

The roles of Chief Executive and Chairman have 
always been split, with the Chairman operating in a 
Non-Executive capacity. An outline of the roles and 
responsibilities of the Chairman, Chief Executive, 
other Executive Directors and, Non-Executive 
Directors are provided on page 62.

The responsibilities of the Chief Executive Officer 
and the Chief Financial Officer are set out on page 
62 and they are supported by an Executive team. As 
at 31 December 2019 the Executive comprised the 
Chief Financial Officer, Chief Commercial Officer, 
and Director of People & Customer Operations. The 
Chief Financial Officer was appointed to the Board 
on 2 January 2020.

The Executive team is an executive-level forum 
of the Group’s most senior leaders, chaired by the 
Chief Executive. It comes together to communicate, 
review and agree on issues and actions of Group-
wide significance. It helps to develop, implement and 
monitor strategic and operational plans, considers 
the continuing applicability, appropriateness and 
impact of risks, leads the Group’s culture and aids the 
decision-making of the Chief Executive and Chief 
Financial Officer in managing the business in the 
performance of their duties. 

During 2019, we reviewed our decision making forums 
and in 2020 are implementing monthly and weekly 
forums to provide clearer governance allowing the 
Company to strengthen in good decisions, reduce 
risk, and review strategic plans, alongside the Audit  
& Risk Committee and the Nominations & 
Remuneration Committee. Monthly forums will 
include the Executive Committee, Customer 
Board, People & Operations Board, Energy Board 
and Budget & Forecasting and weekly forums are 
Executive and Sales & Operations meetings. 

Board and Directors’  
Performance Evaluation

In the period we transitioned to a new Chair with the 
focus on embedding together with the prospect of 
first evaluation under new Chair.

Operations of the Board

Details of the number of scheduled Board meetings 
and attendance of Directors is set out in the table on 
page 68. The Group’s performance is reviewed at 
these scheduled meetings and the Board is responsible 
for agreeing and reviewing the strategy for the Group, 
for which it maintains both short term (twelve months) 
and longer-term (three to five years) plans.

In addition, it is responsible for matters relating to 
employee recruitment and remuneration, strategy, 
health and safety and other specific subject areas.

Where relevant, members of the Executive team and 
other senior leaders within the business are invited to 
attend Board and Committee discussions. Members  
of the Board also engage with members of the 
Executive team and other senior leaders directly on 
relevant initiatives. 

During the year, the Board and relevant Committees 
convened a number of ad-hoc proceedings to support 
the Group in developing, refining and implementing 
initiatives in support of its strategic ambitions. In 
addition, the Board or relevant Committees held 
regular informal discussions on a variety of topics to 
consider the impacts of macro-economic events, 
developments in Government policy and to provide 
guidance and insight to support the Company in 
delivering its short term and longer term objectives.

The Board conducts a formal review of the Group’s 
strategy at least annually, at which all Board members 
and all of the Executive team are present.

Board packs are generally circulated at least one week 
ahead of scheduled meetings to allow adequate time 
for the Board and/or Committee Members to review 
information and prepare. Where a Director is unable 
to attend a meeting, the materials for the meeting 
are provided to them and subsequent briefings are 
provided as appropriate.

The Chairman and Chief Executive maintain regular 
contact and the Chairman receives a briefing from the 
Chief Executive before each scheduled Board meeting. 
The Chairman provides a briefing to the Non-Executive 
Directors before each scheduled Board meeting to 
align priorities and maximise the Board’s effectiveness 
at meetings. The Chairman also regularly de-briefs 
with the Non-Executive Directors after meetings 
to capture feedback and identify opportunities 
for improvement. The Executive Directors do not 
participate in these discussions.

All Directors have the right to request that any 
concerns they have are recorded in the appropriate 
Committee or Board minutes.

The Board reviews the operational and financial 
performance of the Group for each month against a 
pre-agreed set of performance targets. In addition, 
the Board receives information through a system of 
continuous financial planning which enables it to better 
manage profit and cash flow forecasting, and to inform 
investment decision making. The formal financial plan 

69

Strategic ReportGovernance ReportFinancial StatementsGood Energy Annual Report 2019Governance Report 
Performance of Individual Directors

The individual performance of Executive and Non- 
Executive Directors is reviewed annually.

The Chairman conducts an individual annual appraisal 
with the Executive Directors and each Non-Executive 
Director. The cumulative time commitments of 
Non-Executive Directors are reviewed as part of the 
annual performance evaluation to ensure that no 
Non-Executive Director becomes over-committed 
and is able to devote sufficient time to the Company 
to discharge duties effectively. The Chairman’s 
performance is reviewed by the Non-Executive 
Directors, with input from the Executive Directors and 
members of the Executive Team.

The performance of members of the Executive team 
is discussed at the Nominations & Remuneration 
Committee during the first quarter each year and on 
an ad hoc basis as required. Members of the Executive 
team do not attend that discussion.

Good Energy Bonds

On 21 May 2019, the Company announced that it 
would redeem Good Energy Bonds I in full before 30 
June 2019.

As previously reported, the Company was permitted 
to prepay those investments at any time and following 
the sales of Newton Downs and Brynwhilach solar 
farms into community ownership, the Company 
deemed the purposes for which the first bond was 
raised had been fulfilled. Good Energy Bonds II is  
not affected.  

Annual General Meeting (AGM)

Based on UK Government advice at the time of 
writing, the Board has decided to change the format 
of the AGM.

In light of the current UK Government advice 
and related public health guidance we strongly 
recommend that shareholders refrain from attending 
the 2020 AGM in person, as they will be refused entry. 
The health and wellbeing of our shareholders is of 
paramount importance to us and we are monitoring 
the situation and measures advised by the  
UK Government.

Shareholders are strongly encouraged to appoint the 
Chairman as their proxy in advance, to ensure that 
they can vote and be represented at the 2020 AGM. 
No proxy other than the Chairman will be entitled 
to attend  the meeting  in person. If another proxy is 
appointed, they will therefore be unable to vote. No 
shareholder (other than those designated as attending 
for the purposes of the quorum) will be admitted to 
the meeting. Any shareholders attempting to attend in 
person will be refused entry.

There will still be opportunity for shareholders to  
ask questions.

The AGM notice will be circulated to members through 
their preferred communication methods and will 
also be available to view on the Group’s website at      
group.goodenergy.co.uk.

A poll is conducted on each resolution at all Company 
general meetings. All shareholders have the 
opportunity to cast their votes in respect of proposed 
resolutions by proxy, either electronically or by post. 
Following the AGM, voting outcomes are published and 
are made available on the Group’s website.

People at Good Energy

The Group’s employment policies follow best practice 
based on equal opportunities for all employees, 
irrespective of race, gender, nationality, sexual 
orientation, disability, marital status, religion or age. All 
decisions relating to employment are objective, free 
from bias and based upon work criteria and individual 
merit. The Company operates on the principle that 
a workplace where people’s differences are valued 
creates a more productive, innovative and effective 
organisation. Consultation with employees or their 
representatives has continued at all levels, with the 
aim of ensuring that views are taken into account 
when decisions are made that are likely to affect their 
interests and that all employees are aware of the 
financial and economic performance of the business.

Audit & Risk Management report

Overview

During the period, the Committee:

Good Energy recognises that effective risk 
management is critical to enable it to meet its  
strategic objectives. 

The Company has a clear framework for identifying 
and managing risk, both at an operational and 
strategic level. Its risk identification and mitigation 
processes have been designed to be responsive 
to the changing environment in which it operates. 
The impact of emerging risks on the Company’s 
business model are also considered and used to make 
informed decisions, including as to the delivery and 
evolution of the Group’s strategy.

A summary of the key risks facing the Group is set out 
in the Strategic Report on page 28.

The Board retains overall responsibility for the 
Company’s risk management and internal controls 
framework. While the Board reviews the Company’s 
principal risks and the suitability of the internal 
controls annually, responsibility for reviewing the 
effectiveness of risk management and internal 
controls is delegated to the Audit and Risk Committee 
which reviews this on an annual basis. The system of 
internal controls is designed effectively to manage, 
rather than eliminate, the risk of failure to achieve 
business objectives.

Audit & Risk Committee

The members of the Audit and Risk Management 
Committee are shown on page 67. On 6th February 
2019 the Board welcomed Nemone Wynn-Evans as 
an independent Non-Executive Director. Nemone 
assumed the Chair of the Committee following 
completion of her induction to Good Energy in  
June 2019. 

Emma Tinker and Nemone Wynn-Evans are 
considered to have recent and relevant financial 
experience. The Chief Executive attends meetings of 
the Committee by invitation only together with the 
Chief Financial Officer and Audit & Risk Specialist. 

The primary duty of the Audit and Risk Committee 
is to oversee the accounting and financial reporting 
process, the internal accounting practices, external 
audit arrangements and effectiveness of the Group’s 
risk management and internal control system. Further 
reviews will be undertaken throughout 2020 in light of 
the COVID-19 outbreak.

The Audit and Risk Committee also meets at least 
annually with the Group’s external auditors to review 
and agree the audit services being provided to the 
Group, including any non - audit services. It also 
meets with external auditors, without management 
being present, to discuss the audit process. 

• 

• 

oversaw an upgrade of the enterprise risk 
management framework to improve business 
integration;

oversaw an improvement of financial and 
operational reporting and controls;

•  were involved with the application for derogation 

from the energy price cap;

•  were consulted on the implementation plan for 

the Kraken project; and

•  were consulted on the reporting of one-off errors 

within the full and half year results.

Risk control environment and internal audit

The Company has an established risk and internal 
audit function which was led by the General Counsel 
& Company Secretary throughout the year. For 2020, 
under the new management structure, the risk and 
internal audit function will fall under the remit of the 
Chief Financial Officer.

The internal audit and risk function is responsible 
for Good Energy’s risk management activities, 
and internal audits. As such, its activities include 
ensuring the regular review of internal controls 
relating to key risks, reporting on risk events to the 
Audit & Risk Committee and reviewing and testing 
the effectiveness of internal controls through audit 
reviews. Key Risks are shown on pages 28-31 in the 
Strategic report.

Since completing its groupwide upgrade of the 
control environment in 2015, Good Energy has 
continued to evolve its code of conduct, a ‘Guiding 
Principles’ approach that is appropriate for a fast-
growing business. This ensures everyone who works 
at Good Energy reflects the Company’s ethos when 
working together.

The Guiding Principles provide a framework to 
empower Good Energy employees to make 
informed decisions that are in the best interests 
of the Company and its customers and other 
stakeholders, reflect the environment in which the 
Company operates, mitigate risk, and explain where 
to get advice. The Guiding Principles demonstrate 
the Group’s commitment to working with honesty, 
respect and transparency. They also include 
policies relating to, amongst other things, customer 
service, data handling, health & safety, approvals & 
authorities, procurement, and corporate responsibility.

The Guiding Principles are refreshed at least annually 
and the Group continues to evolve the way in which 
it secures engagement from employees at all levels 
across the organisation.

70

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Strategic ReportGovernance ReportFinancial StatementsGood Energy Annual Report 2019Governance Report 
 
Whistleblowing Policy

The Group’s whistleblowing policy is supported by a 
clear process and includes a secure, independent 
and anonymous third-party helpline, through which 
any person, from employees to casual contract 
workers, may raise concerns about wrong doing, 
poor practices, risks or dangers in relation to the 
Company’s business dealings or activities.

The Whistleblowing Policy is reviewed annually by 
the Audit and Risk Committee. Any whistleblowing 
incidents and their outcomes are reported to the 
Committee. No reports were made during 2019.

The internal audit and risk management function 
aims to build on initiatives such as the Company’s 
Guiding Principles, to enhance the control 
environment. Reporting into the Audit and Risk 
Committee, the function has carried out audit 
activity to provide assurance that key risks are being 
identified and mitigated, and associated controls are 
operating effectively.

Going Concern

The Group is actively monitoring the impact of 
COVID-19 on its business and has put in place a 
number of mitigations to minimise the impact. 
The Group has been working with a variety of 
stakeholders to ensure our UK focused business is 
well placed to respond. The implementation of our 
new customer technology platform is progressing 
as planned which provides us with future flexibility 
to operate and deliver all services to customers. We 
now have our full business of just under 300 people 
successfully working remotely. All core business 
functions including customer care are functioning 
as expected although we are needing to make 
adjustments, such as encouraging substantial  
self-serve on meter reading etc, given those  
third-party face to face operations are being 
substantially curtailed. 

The operation of generation sites has been 
unaffected during the lockdown period. Sites can 
operate without human intervention, and contractors 
have been able to attend site for any required 
maintenance as they are exempt from travel 
restrictions due to utilities being an essential service. 
While it is difficult to forecast the impact of COVID 
19, the Group’s day-to-day operations continue 
without being materially affected. 

Early indications have shown a 10-15% increase 
in demand for domestic electricity and gas with 
domestic customers accounting for approximately 
55% of Good Energy’s supply cash flow. We have 
seen a reduction of approximately 25% in electricity 
demand from our business customers. Business 
customers account for approximately 45% of Good 
Energy’s supply cash flow. We have currently seen 
no deterioration in direct debit or pay on receipt of 
bill cash receipts from customers since the start of 
the COVID-19. However, as the lockdown period 
continues, and an economic downturn commences 
we are expecting an impact on business and 
domestic customers’ ability to pay for energy usage. 

The Group has spent considerable time assessing 
the potential impacts that COVID-19 could have 
on our operations. This assessment has taken in to 
account the current measures being put in place by 
the Group to preserve cash and reduce discretionary 
expenditure, and potential reductions in revenues 
resulting from the economic impact on domestic 
and business customers due to lockdown and an 
expected economic downturn. It also assumes that 
there are no overdraft or additional loan facilities  
in place. 

The Group has long standing and well operated 
trading relationships with a number of 
counterparties, the majority of which contain an 
agreement that the Group’s Tangible Net Worth 
(defined as paid up shareholder cash contributions 
plus retained earnings) should not decrease by more 
than 25% over a 12 month period or fall to below 
a certain level. Tangible Net Worth covenants are 
tested annually on publication of audited financial 
statements. Breach of this financial covenant 
allows counterparties, if they so decide, to request 
additional financial support (which may be in the 
form of a parent company guarantee, letter of credit 
or other financial security). The counterparty may 
terminate the contract if appropriate additional 
financial security is not provided, if requested, 
within a timely manner. The value at risk with 
counterparties based upon current commodity 
contracts and current market prices is estimated at 
approximately £2m.

The group’s borrowings with GCP, amounting to 
£33.8m, contains two covenants being a debt service 
cover ratio and a loan life cover ratio specifically 
associated with the generation assets. Compliance 
with these covenants is based on generation prices 
and volumes, which the Board has concluded are not 
materially affected by COVID-19. 

The Board has considered a Downside Case which 
assumes the reduced energy usage during a 
lockdown period of four months, assumes that 10% of 
domestic customers and 25% of business customers 
make no payments during this period, that 30% of 
these debts are not subsequently collected within a 
twelve-month period and that 50% of bondholders 
elect to redeem their bonds in June 2021. The 
Downside Case indicates that the Company is 
compliant with the counterparty covenant test and 
able to operate for twelve months from the date of 
approval of the Annual Report and Accounts.

Given the uncertainty over the lockdown period 
and collection rates, this has been sensitised under 
a plausible reverse cash stress test such that the 
lockdown period extends to six months, that 30% of 
domestic customers and 40% of business customers 
make no payments during this period, that 50% of 
these debts are not subsequently collected and that 
100% of bondholders elect to redeem their bonds. 
Under this scenario, the Group would have sufficient 
cash to repay the bond in full in June 2021, with nil 
cash balance remaining, and would be compliant 
with its counterparty covenant.  

It is plausible that lockdown periods in the going 
concern period are over a period of longer than six 
months, or the impacts on cash collection is worse 
than the scenarios above. If either of these were the 
case in addition to the reverse cash stress test, the 
Group would breach its counterparty covenant and/
or would have insufficient cash to repay the bond in 
full in June 2021. 

The Directors are confident that further mitigating 
actions could be taken by inception of new banking 
facilities, the sale of generation sites, issuing new 

equity or ensuring a waiver from the counterparty 
covenant breach. However at this point, these plans, 
whilst under contemplation by the Board, are not 
in place and therefore the risk of not being able 
to mitigate the liquidity risk including the breach 
of the counterparty covenant represent material 
uncertainty that may cast doubt over the Group’s 
ability to continue to apply the going concern basis 
of accounting.

Notwithstanding the material uncertainty described 
above, after making enquiries and assessing the 
progress against forecast, projections and status 
of the mitigating actions referred to above, the 
Directors have a reasonable expectation that 
the Group will continue in operation and meets 
its commitments as they fall due over the going 
concern period. Accordingly, the Directors continue 
to adopt the going concern basis in preparing the 
financial statements.

External Audit 

Auditor appointment 

Following a competitive tender process, the Group 
appointed Ernst & Young as auditors during 2017. 
Ernst & Young’s appointment was confirmed by 
members at the 2018 AGM. Ernst & Young LLP 
continue as the Company’s auditors. The Committee 
will consider whether to re-tender the audit after a 
five year period, or earlier if appropriate.

Auditor independence

The Audit and Risk Committee monitors the Group’s 
safeguards against compromising the objectivity and 
independence of the external auditors. It annually 
reviews any non-audit services provided to the Group 
and their cost, and whether the auditors believe 
there are any relationships that may affect their 
independence and obtaining written confirmation 
from the auditors that they are independent.

The Audit and Risk Committee has also reviewed its 
policy for awarding non-audit work.

For the financial year ended 31 December 2019, the 
Committee has conducted its review of the auditors’ 
independence and concluded that no conflict of 
interest exists between Ernst & Young LLP audit and 
non-audit work. The Audit and Risk Committee is  
using Ernst & Young for audit only services.

Audit and non-audit fees

The Audit & Risk Committee reviewed the 
remuneration received by Ernst & Young for non-
audit work conducted during the period as part of 
assessing their independence. For further details 
regarding fees paid, see note 7 to the financial 
statements on page 136.

72

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Strategic ReportGovernance ReportFinancial StatementsGood Energy Annual Report 2019Governance Report 
Nomination & Remuneration report

Overview

Good Energy operates on the principle that a 
workplace where people’s differences are valued 
creates a more productive, innovative and effective 
organisation. The Company also recognises that 
attracting, retaining and incentivising key talent is 
integral to its ability to meet its strategic objectives.

The Board retains overall responsibility for the 
Company’s people and reward strategies.

Diversity and inclusion are beliefs which Good Energy 
are passionate about and continue to promote 
throughout the company. Diversity at Good Energy 
provides different perspectives which are highly 
valued as these differences support the Company in 
achieving its purpose. The Company believe inclusion 
and diversity are consistent with its values and are 
considered in recruitment selection processes, 
opportunities for development and promotion, pay 
and benefits for its people. Diversity, equality & 
inclusion guidance and online training is provided to 
all employees during induction.

Data gathering has begun relating to the ethnicity 
of its people to enable a fuller understanding of the 
representation at Good Energy.

While the Board reviews the suitability of these 
strategies annually, responsibility for reviewing the 
effectiveness of these strategies and underlying  
plans is delegated to the Nominations & 
Remuneration Committee.

The Nominations & Remuneration 
Committee

The members of the Nominations and Remuneration 
Committee are Emma Tinker (Chair), Will Whitehorn, 
Tim Jones and Nemone Wynn-Evans, all of whom are 
independent Non-Executive Directors.

The primary duties of the Nominations & 
Remuneration Committee are to:

• 

• 

• 

• 

review the structure, size and composition of  
the Board and its Committees to ensure that they 
remain appropriate to support the Company’s 
growth and development, and making 
recommendations to the Board;

ensure that there is a formal, rigorous and 
transparent process for the appointment of  
new Directors to the Board;

to consider and develop succession plans 
appropriate for the Group; 

determine the Group’s approach to the 
remuneration of the Executive Directors and 
senior managers of the Group, on behalf of  
the Board;

• 

• 

conduct an annual appraisal of the performance 
of the Executive Directors; and 

assess Company performance against 
performance targets within reward schemes.

No Director may be involved in any decisions as to 
their own remuneration.

The Nominations & Remuneration Committee also 
oversees the group-wide remuneration strategy, 
particularly with respect to diversity, inclusion 
and gender pay. The functions of a Nominations 
Committee were introduced to the pre-existing 
Remuneration Committee during 2016. During  
the period, the Board considered whether these 
functions would be better separated into two 
separate committees and concluded that it  
remained appropriate for the functions to be 
combined within a single committee. The Board  
will review this periodically.

Nominations

The Committee will keep under review the 
composition of the Board, the mix of skills and 
experience of the Directors and the needs of the 
business, having due consideration for the benefits 
of diversity, and support the Group in developing 
appropriate succession plans to meet its  
long-term objectives.

The Board remains focused on promoting diversity 
across the organisation and notes that women and 
men were equally represented at both Board and 
Executive level during the period. 

The Committee is responsible for reviewing the 
time commitments of each Director both prior to 
all appointments and annually, as part of the Board 
Evaluation process, to ensure that all Directors devote 
sufficient time to the Company to discharge their 
duties effectively.

During the period, the Committee:

• 

• 

• 

received and considered proposals to implement 
the role of Chief Financial Officer, including 
reviewing the resulting composition of the Board 
and the availability of a suitable mix of skills, 
experience and expertise; 

oversaw the recruitment, appointment and 
induction of Rupert Sanderson following its 
recommendation that the Board appoint a Chief 
Financial Officer to the Board; and

reviewed overall appropriateness of the new 
Executive management structure in order to 
implement and deliver company strategy.

74
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Good Energy Annual Report 2019

75

Strategic ReportGovernance ReportFinancial StatementsGood Energy Annual Report 2019Governance ReportService agreements, notice periods and 
termination payments

The service agreements for the Executive Directors 
are not for a fixed term and may in normal 
circumstances be terminated on the notice periods 
listed on the following page.

The remuneration of the Chairman of the Company 
and the Non-Executive Directors consists of fees that 
are paid monthly in arrears.

The Chairman and the Non-Executive Directors did 
not participate in any bonus scheme or long-term 
incentive reward schemes, nor did they accrue any 
pension entitlement during the period. Following 
the publication in August 2015 of HMRC’s express 
confirmation of the travel rules that apply to Non- 
Executive Directors, the Company reimburses Non- 
Executive Directors’ travel expenses between home 
and the Company’s Head Office. The key terms of 
the Non-Executives Directors’ appointments are set 
out in the table on the following page.

The Group reviewed Non-Executive Director fees and 
concluded that the existing annual fees and structure 
remain appropriate. See table overleaf. The fee for 
each Non- Executive Director is £25,000, with an 
additional fee for those that chair a committee. The 
fee payable to the Deputy Chair is £40,000 and the 
fee payable to the Chairman is £45,000.

Executive salaries were also benchmarked during the 
year against AIM company data and adjusted where 
necessary to reflect the size of the Company.

Service agreements, notice periods and termination payments

Name

Position

Date of contract Notice period Annual Salary (£)

Executive Directors

Juliet Davenport

Chief Executive

02 August 2007

9 months

218,000

Non-Executive 
Directors

Emma Tinker

02 September 2016

Tim Jones

01 December 2017

Will Whitehorn

26 July 20181

Nemone Wynn-Evans

01 January 2019

30,000

25,000

45,000

32,000

Former Directors

John Maltby

15 October 2012

45,000

Remuneration

Information about the remuneration of the Directors 
of the Company for the year ended 31 December 
2019 is set out in the following section. This report is 
unaudited and has been prepared in accordance 
with the requirements for AIM listed companies set 
out in the Companies Act 2006 and the AIM rules.

The Group’s bonus and share-based incentive 
schemes have been in place since 2016 and remain 
aligned with current best practice. They are designed 
to motivate and incentivise key talent to assist the 
Group in achieving its strategic aims and comprise:

• 

• 

an Annual Bonus Plan that encompasses both 
financial and non-financial annual performance 
targets, details of which are set out on page 79; 
and

a Performance Share Plan for Executive Directors 
and members of the senior management team, 
details of which are set out on page 80.

During the period, the Remuneration Committee 
agreed a non-material alteration to the performance 
criteria, introducing an objective measure which 
considers retention of key talent in place of the 
previous employee engagement criterion. No other 
changes have been made to the operation of these 
schemes during the period.

Remuneration Policy

Details of the Company’s Nominations & 
Remuneration Committee are set out on page 67.

The Nominations & Remuneration Committee  
has designed and adopted a remuneration policy  
to ensure that the Company is able to attract,  
retain and motivate its Executive Directors and  
senior management.

The Group operates in a competitive environment. 
It therefore sets out to provide competitive 
remuneration to all of its employees, appropriate to 
the business environment, geographical location and 
strategic aims of the Company.

The Group aims to align the interests of shareholders 
with those of Executive Directors and senior 
management by giving the latter the opportunity to 
build up a shareholding interest in the Company.

76

77

1. Formal appointment to the Board took effect on 4 July 2018.

Strategic ReportGovernance ReportFinancial StatementsGood Energy Annual Report 2019Governance ReportSalaries/Fees, annual bonus and benefits 

Name

Salary/fee 

Pension

Benefits in Kind 

Annual Bonus 

Total

Total

2019 (£)

2019 (£)

2019 (£)

2019 (£)

2019 (£)

2018 (£)

Executive Directors

Juliet Davenport

222,931

27,580

22,391

95,000

367,902

330,625

Sub-total

222,931

27,580

22,391

95,000

367,902

330,625

Non-Executive Directors

Will Whitehorn2

Emma Tinker

Tim Jones

46,278

31,864

25,109

Nemone Wynn-Evans3

32,719

John Maltby4

Sub-total

33,750

169,720

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

46,278

19,422

31,864

31,911

25,109

25,842

32,719

-

33,750

48,259

169,720

125,434

Overall total

392,651

27,580

22,391

95,0005

537,622

456,0596

2. Pro-rata for the period of directorship. Joined the Board effective  04 July 2018.

3. Pro-rata for the period of directorship. Joined the Board effective 06 February 2019.

4. Pro-rata for the period of directorship. Left the Board effective 13 June 2019.

5. 2018 bonus paid in 2019.

6. 2018 total (including former directors) was £651,521.

78

Annual bonus scheme

Operation of the scheme

In 2018, the Remuneration Committee agreed a 
non-material alteration to the performance criteria 
for the scheme, introducing an objective measure 
which considers retention of key talent in place of the 
previous employee engagement criterion. No other 
changes were made to the operation of the bonus 
scheme during the period. 

All bonuses under the bonus scheme are individually 
capped. A maximum potential bonus of 75% of 
Executive Directors’ salary is payable in relation 
to the Company’s performance against four key 
performance metrics. The performance metrics and 
their relative weightings are shown in the table below.

Maximum bonus will only be payable in the event 
that stretch targets for all four of these performance 
metrics are met. Performance against the targets 
is measured on a sliding scale basis between the 
achievement of threshold, on-target and stretch 
targets, starting with one third of the potential 

bonus being payable where threshold targets are 
met. No bonus will be payable unless the Group’s 
profit before tax meets the threshold targets unless 
the Nominations & Remuneration Committee, in its 
discretion, determines otherwise.

The Nominations & Remuneration Committee  
also retains discretion, under the bonus scheme 
rules, to adjust any payments in line with individual 
performance.

Individual performance targets are set annually  
and reviewed at the end of the relevant financial 
year, and annual targets for each of the four 
Company performance metrics will be set by the 
Nominations and Remuneration Committee.

The Group considers that the targets for 2020 
are commercially sensitive and are not therefore 
disclosed. However, retrospective disclosure of 
performance against targets for the year ending 31 
December 2019 is provided on the following page.

Measure

Strategic objective

Weighting

Group profit before tax

Deliver profit growth

Absolute net promoter score Maintain customer satisfaction ratings

Employee retention7

Attract and retain employees with the right skills, knowledge 
and mind-set to help deliver the Company’s growth plans

Corporate CO2 reduction

Help to reduce carbon emissions

2019 targets and performance

60%

20%

10%

10%

The Group’s performance against targets and actual outturn for the financial year ended 31 December 2019 
are set out in the table below.

Although the Group profit before tax exceeded threshold for 2019, In light of the ongoing COVID-19 pandemic 
the staff bonus is deferred.

Measure

2019 outturn

2018 outturn

2019 performance 
against target

£1.7m

Between threshold and target

Profit before tax8

NPS

£2.1

54

Employee retention

78%

46

68%

Corporate CO2 reduction

ISO 14001 maintained. 
Emissions neutralised 
and reduced by 12% 
per head.

ISO 14001 maintained. 
Emissions neutralised 
and reduced by 10.5% 
per head.

Target

Target

Target

7. This measure considered “employee engagement” in 2017 and was altered by the Committee for 2018. 
8. Calculated on underlying continuing PBT of £2.1m after the £865k non-underlying costs associated to the Kraken customer services investment. 
2018 calculated on underlying continuing PBT of £1.7m excluding the impact of £0.6m reclassification relating to Brynwhilach solar farm.

79

Strategic ReportGovernance ReportFinancial StatementsGood Energy Annual Report 2019Governance Report 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Performance share plan (“PSP”)

Directors’ share options

for achieving stretch targets. No award will vest 
unless Total Shareholder Return is positive over the 
measurement period.

The Nominations & Remuneration Committee may, 
at any time up to and including vesting, reduce 
the vesting level of awards where there has been, 
amongst other things, a material misstatement in 
the accounts, an error in any information on which 
performance targets were based, gross misconduct 
or fraud by the employee.

Performance targets

The performance metrics and their relative 
weightings for the 2019 grant of awards are shown 
in the table below. The Group considers the targets 
themselves to be commercially sensitive and these 
are not therefore disclosed. However, retrospective 
disclosure of performance against targets will  
be provided at the end of the relevant  
measurement period.

Operation of the scheme

The existing scheme was implemented during 
2016 following advice from external remuneration 
consultants and in consultation with the Company’s 
ten largest shareholders. It is designed to enhance 
alignment between Executive Directors and 
shareholders, and better reflect current market 
practice, including the addition of performance 
conditions for the vesting of awards, which are 
described in more detail below, where previously 
there were none.

The usual policy is to grant awards to Executive 
Directors over shares worth up to 50% of salary at 
the time of grant. The maximum limit of an award 
to any individual under the PSP in any financial year 
would be 100% of annual salary, subject to the 
Remuneration Committee’s discretion to increase to 
150% of salary in exceptional circumstances.

Awards granted under the scheme shall normally 
vest three years from the date of grant, subject 
to continued employment and satisfaction of 
performance criteria measured over a three  
year period.

Performance against targets is measured on a  
sliding scale, with 20% of the relevant part of the 
award vesting at threshold level, 50% vesting for 
on-target performance through to 100% vesting 

Measure

Strategic objective

Weighting

Earnings per share

Drive shareholder value

60%

Relative net promoter score (relative to 
‘Big 6’ energy companies)

Maintain higher customer 
satisfaction rating than ‘Big 6’ 
energy firms

20%

Customer CO2 reduction

Ensure long term sustainability 
of our own operation

20%

Details of the Directors’ share options outstanding at 31 December 20199 are shown below.

Name

Date option 
granted

Number of options 
outstanding as at 
31 December 2019

Option 
price

Exercised 
during 
period

Cancelled/ 
surrendered 
during period

Juliet Davenport

01/06/2004

-

£0.75

15,00010

13/02/2012

86,956

13/02/2012

17,390

18/09/2012

189,052

13/07/2013

144,000

22/04/2016

-

10/05/2017

42,363

15/11/2018

122,472

£1.15

£1.15

£0.50

£1.25

£0.05

£0.05

£0.05

-

-

-

-

-

-

-

-

-

-

-

88,496

-

Total

602,233

15,000

88,496

Emma Tinker

Chair of Nominations and 
Remuneration Committee

3 June 2020

80

81

9. Rupert Sanderson joined the Board in January 2020. Options granted 15/11/2018. £58,427 outstanding at 31 December 2019. Option price £0.05. 
10. Exercised in full on 14 January 2019.

Strategic ReportGovernance ReportFinancial StatementsGood Energy Annual Report 2019Governance ReportStatutory and other information

General company information

Good Energy Group PLC is a public limited company 
incorporated in England and Wales.

The Company’s registered office and principal 
place of business is: Monkton Reach, Monkton Hill, 
Chippenham, Wiltshire, SN15 1EE and the registered 
number is 04000623.

Share capital

On 31 December 2019, 16,621,245 ordinary shares of 
5p each were in issue. The Company is listed on the 
Alternative Investment Market (AIM) of the London 
Stock Exchange, is a founding member of the Social 
Stock Exchange (SSE) and its shares have been 
trading on the Social Impact segment of the NEX 
Growth Market since 5 January 2016.

Significant shareholders

of the shares and no known agreements between the 
holders of shares with restrictions on the transfer of 
shares or exercise of voting rights. 

Authority to issue shares

At the AGM in 2019, authority was given to the 
Directors to allot new ordinary shares up to a nominal 
value of £276,192, equivalent to one-third of the 
issued share capital of the Company at that time. The 
Directors were also authorised to allot up to two thirds 
of the total issued share capital of the Company, but 
only in the case of a rights issue.

These authorities are valid until the AGM in 2020,  
and the Directors propose to renew this authority at 
the AGM.

The Board believes this authority will allow 
the Company to retain flexibility to respond to 
circumstances and opportunities as they arise.

At 31 December 2019, the following shareholders 
had notified an interest exceeding 3% of the issued 
ordinary share capital of the Company (excluding 
Directors and their respective families as defined  
in the AIM rules, details of which are set out on  
the next page): 

Deadlines for exercising voting rights

Electronic and paper proxy appointments, and  
voting instructions, must be received by the 
company’s Registrar not less than 48 hours before  
a general meeting. 

Shareholder

Number 
of shares

%

Details relating to the proposed 2019 final dividend 
are set out in the Chairman’s Statement on page 9.

Dividends

Ecotricity Group Limited

4,169,948

25.1%

Directors

Hargreaves Lansdown plc

1,167,014

7.0%

The names of the Directors that held office during the 
financial year are set out on page 58-59.

Martin Edwards

669,827

4.0%

IFRS 16

Share class rights

Ordinary shares

The full share class rights are set out in the Company’s 
Articles of Association which are available to view at 
goodenergygroup.co.uk and summarised below:

Each member has one vote for each ordinary share 
held. Holders of ordinary shares are entitled to: 
receive the Company’s Annual Report and Accounts; 
attend and speak at general meetings of the 
Company; appoint one or more proxies or, if they are 
corporations, corporate representatives; and exercise 
voting rights. Holders of ordinary shares may receive 
a dividend in cash or ordinary shares under the 
Company’s scrip dividend scheme and on liquidation 
may share in the assets of the Company.

Shareholder agreements and consent requirements

There are no known arrangements under which 
financial rights carried by any of the shares in the 
Company are held by a person other than the holder 

Good Energy Group plc has introduced IFRS 16 
Leases for the first time in its financial year to 31 
December 2019.

The Group has chosen to adopt the modified 
retrospective approach of implementing this 
standard, and as such, comparative information in the 
Annual Report for the year ending 31 December 2018 
has not been restated.

The new requirements under IFRS 16 will have a 
significant impact the way in which the Group 
accounts for its lease contracts. 

Additional assets and liabilities will be accounted for 
in the Statement of Financial Position.  Costs in the 
Statement of Comprehensive Income will change 
from a lease expense, replaced by a depreciation 
charge along with a finance cost.  This results in 
increased costs in the earlier years of the lease, which 
will reduce over time as the values of the assets and 
liabilities decrease.

The effects of the implementation of this standard 
are discussed in more detail in notes 2.4 and 16 of this 
Annual Report.  

83

82
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Good Energy Annual Report 2019

Strategic ReportGovernance ReportFinancial StatementsGood Energy Annual Report 2019Governance ReportDirectors’ interests and their interests in the Company’s shares1

The interests (all of which are beneficial unless otherwise stated) of the Directors and their families as defined 
in the AIM Rules in the issued share capital of Good Energy Group plc are:

No. shares  
as at 31  
December 
2019

%age of 
issued share 
capital

No. shares  
as at 31  
December 
2018

%age of 
issued share 
capital

Current Directors

Juliet Davenport2

Rupert Sanderson

Will Whitehorn

Emma Tinker3

Tim Jones 

Nemone Wynn-Evans

627,455

16,770

52,000

1,560

9,489

9,500

3.78

0.10

0.31

0.01

0.06

0.06

627,455

-

28,000

1,523

9,489

-

3.78

-

0.17

0.01

0.06

-

Financial instruments

The Group’s financial instruments include bank  
loans and other borrowings, a corporate bond  
and overdraft.

The principal objective of these instruments is to raise 
funds for general corporate purposes and to manage 
financial risk. Further details of these instruments are 
given in note 26 in the Financial Statements.

Future developments & research

Details of future developments are given in the Chief 
Executive’s Review within the Strategic Review. 
Innovation is key to the future development of the 
Group’s business propositions. The Group does not 
incur material research and development expenditure 
but does undertake selected research, development 
and innovation projects which are often grant-funded.

Referral Arrangements/ Political Donations

The Company has operated and continues to operate 
referral arrangements with certain political parties. It 
considers these to be commercial arrangements, with 
a referral payment made for each customer referred 
to Good Energy. However, the Companies Act 2006 
definitions of the making of political donations or the 
incurring of political expenditure are capable of a 
wide interpretation. In the interests of transparency, 

the Company has  obtained shareholder approval 
for the referral arrangements at its Annual General 
Meetings since 2015 and anticipates requesting that 
authorisation be refreshed at the Annual General 
Meeting in 2020.

Impact on the environment

The Company is committed to reducing its 
environmental impact and the carbon emissions from 
its operations. ISO14001 accreditation was achieved 
during 2017, providing independent confirmation that 
the Group meets international standards for measuring 
and continually improving environmental performance. 
The Company regularly measures its Scope 1 and 
Scope 2 emissions and as many indirect Scope 3 
emissions as possible. Where it is not yet possible to 
avoid or eliminate emissions, these are neutralised 
through international carbon reduction projects. More 
information can be found in the Strategic Report.

Gender Pay

The Board welcomed the introduction in 2017 of 
Gender Pay reporting. The Group has a strong 
commitment to gender balance and equality at all 
levels of the business. The Board is proud to have 
an equal gender balance (female : male) at Board 
level and just over 50% women within the business 
overall. The Group’s mean pay gap for 2019 is 

1. Certain of the Directors hold share options as detailed on pages 81 within the Nominations & Remuneration Report.

2. Juliet Davenport holds 583,179 Ordinary Shares in the Company in her own name. Her husband owns 43,000 Ordinary Shares. One daughter owns 638 Ordinary  
    Shares and Juliet Davenport holds a further 638 Ordinary Shares on behalf of another daughter.

3. Emma Tinker’s holding increased during the year as a result of participation in the scrip dividend.

27%. The gap predominantly arises because the 
Group currently employs more men than women in 
middle management roles, particularly in Science, 
Engineering, Technology and Maths (STEM) related 
functions. The Group’s full Gender Pay Report, which 
also details the actions initiated by the Board to close 
the Group’s gender pay gap, is published on its website. 

The Directors proposed a final dividend for the year  
of 2.6p per share. Due to the ongoing COVID-19 
outbreak the Directors have subsequently proposed 
to defer the payment of this dividend, to provide more 
flexibility in the Group’s response to the pandemic. 
The Directors will continue to monitor the COVID-19 
situation on an ongoing basis and consider the 
payment of the final dividend.

Modern Slavery

Although the Group considers the inherent risk of 
encountering issues of modern slavery within its 
business, supply chains and strategic affiliations to be 
low, it is nonetheless an issue that the Group and the 
Board takes very seriously. The Group’s full statement 
under section 54 of the Modern Slavery Act 2015 for 
the period ended 31 December 2019 is published on  
its website. 

Related Party Transactions

Related party transactions are set out in note 34 in the 
Financial statements.

Disclosure of Information to Auditors

So far as each Director is aware, there is no relevant 
audit information of which the Company’s auditors are 
unaware, and each Director has taken all the steps that 
they ought to have taken as a Director in order to make 
themselves aware of any relevant audit information and 
to establish that the Company’s auditors are aware of 
that information. This confirmation is given, and should 
be interpreted, in accordance with the provisions of 
Section 418 of the Companies Act 2006.

Events after the Balance Sheet date

In March 2020 the outbreak of COVID-19 became a 
global issue. In light of the outbreak’s wide-ranging 
implications, the Group have undertaken a detailed 
going concern review to ensure continued operations 
throughout the period affected, with a particular focus 
on cash flows and business continuity plans. To date, 
the Group has not seen any significant financial impact 
from the COVID-19 outbreak, however it continues to 
monitor the situation closely throughout the coming 
weeks and months. 

The Directors have concluded that the latest 
developments up to the date of signing of these 
financial statements have not provided further 
information about the circumstances existing at 
the reporting date, therefore do not expect any 
adjustments to these financial statements to be  
made as a consequence. 

As a result of the detailed review, the Directors have a 
reasonable expectation that the Group will continue 
in operation and meet its commitments as they fall 
due over the going concern period, subject to material 
uncertainties over liquidity. The detailed going concern 
review can be found in full per the Audit & Risk 
Management Report on pages 72-73.

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in respect of the annual report and the 
financial statements

The Directors submit their Annual Report and 
Financial Statements (Annual Report and Accounts) 
for Good Energy Group plc for the year ended 
31 December 2019. The directors’ report required 
under the Companies Act 2006 comprises this 
Governance & Directors’ Report and the Nominations 
& Remuneration Report.

The Company is required to set out a fair review 
of the Group’s activities and a description of the 
principal risks and uncertainties facing the business 
as detailed in the Strategic Report. This requirement 
includes an analysis of the development and 
performance of the Group’s business during the 
financial year, and the position of the Group at the 
end of the reporting period consistent with its size 
and complexity.

The Directors are responsible for preparing the Annual 
Report and Accounts in accordance with applicable 
law and regulation, including company law which 
requires the Directors to prepare financial statements 
for each financial year. Under company law the 
Directors must not approve the financial statements 
unless they are satisfied that they give a true and fair 
view of the state of affairs of the Group and parent 
company and of the profit or loss of the Group and 
parent company for that period.

In preparing the financial statements, the Directors 
are required to:

• 

• 

select suitable accounting policies and then 
apply them consistently;

state whether applicable International Financial 
Reporting Standards (IFRSs) as adopted by the 
European Union have been followed for the 
Group financial statements and IFRSs as adopted 
by the European Union have been followed for 
the Company financial statements, subject to any 
material departures disclosed and explained in 
the financial statements;

•  make judgements and accounting estimates that 

are reasonable and prudent; and

• 

prepare the financial statements on the going 
concern basis unless it is inappropriate to 
presume that the Group and parent company will 
continue in business.

The Directors have prepared the Group financial 
statements in accordance with (IFRSs) as adopted by 
the European Union and parent company financial 
statements in accordance with International Financial 
Reporting Standards (IFRSs) as adopted by the 
European Union.

The Directors are responsible for keeping adequate 
accounting records that are sufficient to show and 
explain the Group and parent company’s transactions 
and disclose with reasonable accuracy at any 
time the financial position of the Group and parent 
company. These records must also enable them to 
ensure that the financial statements comply with 
the Companies Act 2006 and, as regards the Group 
financial statements, Article 4 of the IAS Regulation.

The Directors are also responsible for the system 
of internal controls, for safeguarding the assets of 
the Group and parent company and for taking 
reasonable steps for the prevention and detection of 
fraud and other irregularities.

The Directors of the ultimate parent company are 
responsible for the maintenance and integrity of the 
ultimate parent company’s website. Legislation in 
the United Kingdom governing the preparation and 
dissemination of financial statements may differ from 
legislation in other jurisdictions.

The Directors consider that the Annual Report 
and Accounts, taken as a whole, is fair, balanced 
and understandable and provides the information 
necessary for shareholders to assess the Group and 
parent company’s position and performance, business 
model and strategy.

Each of the Directors, whose names and functions are 
listed in the Governance & Directors report confirm 
that, to the best of their knowledge:

• 

the parent company financial statements, which 
have been prepared in accordance with IFRSs as 
adopted by the European Union, give a true and 
fair view of the assets, liabilities, financial position 
and profit of the Company

• 

• 

the Group’s consolidated financial statements, 
which have been prepared in accordance with 
IFRSs as adopted by the European Union, give a 
true and fair view of the assets, liabilities, financial 
position and profit of the Group; and 

the Annual Report and Accounts includes a fair 
review of the development and performance of 
the business and the position of the Group and 
parent company, together with a description of 
the principal risks and uncertainties that it faces.

In the case of each Director in office at the date the 
Governance Report is approved:

• 

• 

so far as the Director is aware, there is no relevant 
audit information of which the Group and parent 
company’s auditors are unaware; and

they have taken all the steps that they ought 
to have taken as a Director in order to make 
themselves aware of any relevant audit 
information and to establish that the Group  
and parent company’s auditors are aware of  
that information.

The Annual Report and Accounts, including the 
Strategic Report, Governance & Directors’ Report, 
Remuneration Report and Financial Statements, have 
been prepared and approved by the Board and are 
published in accordance with, and with reliance 
on, applicable English company law. The liabilities 
of Directors in relation to the Annual Report and 
Accounts are subject to the limitations and restrictions 
provided by such law. 

William Whitehorn

Chairman

3 June 2020

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members of Good Energy Group plc

Opinion

In our opinion:

•  Good Energy Group plc’s group financial 

statements and parent company financial 
statements (the “financial statements”) give a 
true and fair view of the state of the group’s 
and of the parent company’s affairs as at 31 
December 2019 and of the group’s profit for the 
year then ended;

• 

• 

• 

the group financial statements have been 
properly prepared in accordance with IFRSs as 
adopted by the European Union; 

the parent company financial statements have 
been properly prepared in accordance with 
IFRSs as adopted by the European Union and as 
applied in accordance with the provisions of the 
Companies Act; and

the financial statements have been prepared 
in accordance with the requirements of the 
Companies Act 2006.

We have audited the financial statements of Good 
Energy Group plc which comprise:

Group

Parent company

Consolidated Statement of Financial Position as at 
31 December 2019

Parent Company Statement of Financial Position as at 
31 December 2019

Consolidated Statement of Comprehensive  
Income for the year then ended

Consolidated Statement of Changes in  
Equity for the year then ended

Parent Company Statement of Changes in  
Equity for the year then ended

Consolidated Statement of Cash Flows  
for the year then ended

Parent Company Statement of Cash Flows  
for the year then ended 

Related notes 1 to 37 to the financial  
statements, including a summary of  
significant accounting policies

Related notes 1 to 37 to the financial  
statements including a summary of significant 
accounting policies

The financial reporting framework that has been applied in their preparation is applicable law and 
International Financial Reporting Standards (IFRSs) as adopted by the European Union and, as regards to 
the parent company financial statements, as applied in accordance with the provisions of the Companies 
Act 2006. 

Basis for opinion  

We conducted our audit in accordance with 
International Standards on Auditing (UK) (ISAs 
(UK)) and applicable law. Our responsibilities 
under those standards are further described in the 
Auditor’s responsibilities for the audit of the financial 
statements section of our report below. We are 
independent of the group and parent company in 
accordance with the ethical requirements that are 
relevant to our audit of the financial statements in  
the UK, including the FRC’s Ethical Standard as 
applied to listed entities, and we have fulfilled our  
other ethical responsibilities in accordance with  
these requirements.

We believe that the audit evidence we have  
obtained is sufficient and appropriate to provide  
a basis for our opinion.

Material Uncertainty Related to Going Concern

We draw attention to note 2.3 to the financial 
statements which indicates that the ability of the 
Group and Company to continue as a going concern 
is subject to material uncertainty. With the current 
outbreak of COVID 19 in the UK, there is uncertainty 
over the length of lockdown periods which cause 
decreases in electricity consumption and the ability 

•  We assessed the Board’s controllable mitigation  
plans and considered the ability of the business  
to operate and repay the bonds in full including  
compliance with Group’s financial covenants.  

  We obtained supporting documentation to  
evaluate the plausibility and achievability of  

  management’s mitigation plans.

•  We compared forecast future cashflows to  

historical data, ensuring variations are in line  
  with our expectations and understanding of  
the business and considered the reliability of  
past forecasts.

•  We performed our own sensitivity analysis on 
   managements forecast cashflows and 
considered the reverse stress tested    

  management model. 

•  We assessed the adequacy of disclosures within  

the Annual Report and Accounts

for customers to pay debts as they fall due. This 
uncertainty means the Group may be unable to 
repay its bondholders when this becomes due on 
June 2021 and may mean the Group breaches its 
counterparty covenant. As stated in note 2.3, these 
events or conditions, along with other matters as set 
forth in note 2.3, have caused a material uncertainty 
that may cast significant doubt on the group and 
company’s ability to continue as a going concern. 
Our opinion is not modified in respect of  
this matter. 

We describe below how our audit has responded to 
the material uncertainty related to going concern:

•  We obtained management’s forecast cash flows  

and covenant calculations covering the period  
from the date of signing to 30 June 2021. We   
tested the clerical accuracy of the cash flows, as  
  well as the calculation of the forecast covenants 
and the headroom in respect of the financial 
covenant compliance. 

•  We audited the assumptions used by the Board of  

Directors in respect of the going concern  
assessment and reverse stress test reflecting    
the potential impact of COVID-19 to determine  
the magnitude of decline in revenue, breaching  
of counterparty trading covenants and  
cashflow that would give rise to an inability to  
repay the bonds in the event the lenders called  
for repayment in June 2021 (after taking  
into consideration the controllable mitigations). 

Overview of our audit approach

Key audit matters

• 

• 

• 

Revenue recognition, specifically the estimated unbilled income

Revenue recognition due to the susceptibility to management override through 
inappropriate, manual entries

Valuation of the expected credit loss provision 

Audit scope

•  We performed an audit of the complete financial information of 3 components 

and audit procedures on specific balances for a further 9 components

• 

The components where we performed full, specific or specified audit 
procedures accounted for 97% of Profit before tax, 100% of Revenue and 95% 
of Total assets.

Materiality

•  Overall group materiality of £1.0m which represents 0.8% of revenues

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Key observations 
communicated to the  
Audit Committee 

Based on the audit procedures 
performed manual entries were 
appropriate, including post 
close adjustments during the 
consolidation process.  

Our journal entry testing 
procedures did not identify 
instances of inappropriate 
management override in the 
recognition of revenue across 
the Group.

Risk

Our response to the risk

We performed walkthroughs of the 
consolidation process at various month 
ends throughout the year, including the 
interim and year end to assess the design 
and implementation of key controls over 
the manual consolidation process. 

Audit procedures specifically designed 
to address the risk of management 
override included using data extracted 
from the accounting system to test 
the appropriateness of journal entries 
impacting revenue, as well as other 
adjustments made in the preparation of 
the financial statements, with a focus on 
selecting and testing manual journals.

For all locations we verified the results 
of the consolidated entities used in the 
manual consolidation by agreeing the 
results included in the consolidation 
directly to the results audited by the  
audit team. 

We selected all consolidation journals 
exceeding 15% of performance 
materiality and obtained evidence to 
verify the validity and accuracy of the 
journals being posted.

Revenue recognition due 
to the susceptibility to 
management override 
through inappropriate 
manual entries. 

Accounting policies (page 
112); and Note 4 of the 
Consolidated Financial 
Statements (page 127).

We consider that all except 
the accrued income of  
Good Energy’s revenue 
transactions reported under 
existing IFRS guidance are 
routine, non-complex, and 
systems driven, with no 
judgement applied over the 
recorded amount.

However, the accounting 
for revenues is susceptible 
to management override 
through the recording of 
manual topside journal 
entries either in the 
underlying ledgers or during 
the consolidation process.

We focused on this area due 
to the manual nature of the 
consolidation process and 
the non-routine judgemental 
nature of some of the 
manual journals posted.

There were no changes in the key audit matters in the current year auditor’s report compared to the prior 
year auditor’s report.

Key audit matters 

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit 
of the financial statements of the current period and include the most significant assessed risks of material 
misstatement (whether or not due to fraud) that we identified. These matters included those which had 
the greatest effect on: the overall audit strategy, the allocation of resources in the audit; and directing the 
efforts of the engagement team. These matters were addressed in the context of our audit of the financial 
statements as a whole, and in our opinion thereon, and we do not provide a separate opinion on these matters.

Risk

Our response to the risk

Key observations 
communicated to the  
Audit Committee 

Revenue recognition, 
specifically the estimated 
unbilled income 

Accounting policies (page 
112); and Note 21 of the 
Consolidated Financial 
Statements (page 154)

The Group’s material 
revenue streams relate to 
the provision of gas and 
electricity services.  

This risk over revenue 
recognition specifically arises 
in income from metered 
services amounting to 
£18.7m (2018: £18.0m), 
which requires an estimation 
of the amount of unbilled 
charges at the year end. 
This is calculated using 
a combination of system 
generated information, 
based on previous customer 
volume usage, together with 
management judgements 
as to the likely impact on 
usage of factors such as 
seasonal variations. Due to 
the accrued income being 
an estimation, the risk of 
management bias is high.

The risk has decreased in 
the current year due to the 
billing system and process 
now being fully operational 
for 2 years.

Our procedures included:

•  We obtained an understanding of 

the process for the supply of gas and 
electric services, meter reading and 
related billing in order to ascertain 
the completeness of adjustments 
to reflect the accrual or deferral of 
revenue.

•  We assessed the design of key 

We did not identify material 
errors in the unbilled income 
report, nor evidence of 
management manipulation of 
revenue within this report. 

We conclude that 
management’s assumptions in 
respect of customer demand are 
within an acceptable range

controls linked to system generated 
information relating to the estimation 
process for measured revenue.

We concluded that the basis 
of calculation of the unbilled 
income accrual is appropriate. 

•  We tested the inputs into the billing 

system, including meter reads, tariffs 
and estimated average consumption.  
This was to ensure that calculated bills 
and the resultant revenues reflected 
accurate contract agreed prices  
and usage.

•  We compared the accrued income  
to bills raised post year end for a 
sample of customers to confirm the 
accuracy of the estimated usage and 
revenue recorded.

•  We corroborated the key assumptions 
made by management in recognising 
revenue, by obtaining internal and 
external data on demand. 

•  We tested whether revenue was 

recognised in the correct period by 
recalculating the accrued income 
based on the last billed date and 
compare that to the amount billed. 

•  We performed analytical procedures 
by comparing revenue balances 
for the year against expectation 
from industry consumption data 
and obtaining support for significant 
variances against that data.

• 

In performing our journal testing, we 
paid increased attention to entries 
impacting revenue focusing on non-
system postings and those raised in 
the last two weeks of the year.

•  We performed full scope audit 

procedures over this risk area in 2 
locations, which covered 100% of  
the risk amount. 

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Strategic ReportGovernance ReportFinancial StatementsGood Energy Annual Report 2019Governance ReportRisk

Our response to the risk

Expected Credit Losses

Our procedures included:

Accounting policies (page 
118); and Note 21 of the 
Financial Statements  
(page 154)

•  We performed a walkthrough of 

the process for calculating the ECL 
provision and assessed the design 
effectiveness of key controls.

Key observations 
communicated to the  
Audit Committee 

We assessed management’s 
judgments and concluded  
that the ECL provision is within 
an acceptable range and 
reflects likelihood of collections  
in future periods.

There is an expected credit 
loss (ECL) provision of £9.2m 
(2018: £5.8m) at the year-
end against gross amounts 
receivable from customers of 
£39.0m (2018: £31.5m).

The simplified approach 
to ECL under IFRS 9 
was calculated using 
management’s judgement 
of the future likely recovery 
rates.

There is a risk that the 
assumptions used by 
management in calculating 
the ECL provision may be 
susceptible to management 
bias and the valuation of 
ECL amounts against trade 
receivables and unbilled 
income may be misstated.  

The risk has increased due 
to the changes on the 
how accrued income are 
calculated and estimated.

•  We tested the integrity of data and 

the report utilised to generate the 
ageing and categorisation of debt 
within the Company’s billing system.

•  We corroborated assumptions made 
by management on collection rates 
and performed sensitivity analysis 
on the impact of these rates on the 
ECL provision. 

•  We formed a view that the 

assumptions made by management 
on collection rates were within our 
expected range by agreeing to 
third party confirmations over the 
rates used and performed sensitivity 
analysis on the impact of these rates 
on the ECL provision.  

•  We assessed the impact of IFRS 

9 on the calculation prepared by 
management and challenged 
provisioning rates based on expected 
credit losses through past history and 
predicted market conditions.

•  We performed analysis against 

debt held at year end compared 
to cash collected post year end 
disaggregated into the categorisation 
of customers used by management in 
the provision calculation to assess the 
reasonableness of provisioning rates. 

•  We tested the appropriateness of 
journal entries and adjustments 
impacting the ECL provision 
particularly those raised close to the 
balance sheet date.

•  We performed full scope audit 

procedures over this risk area in 2 
locations, which covered 100% of the 
risk amount. 

An overview of the scope of our audit

Tailoring the scope

Our assessment of audit risk, our evaluation of 
materiality and our allocation of performance 
materiality determine our audit scope for each 
entity within the Group.  Taken together, this enables 
us to form an opinion on the consolidated financial 
statements. We take into account size, risk profile, the 
organisation of the group and effectiveness of group 
wide controls, changes in the business environment 
and other factors such as recent Internal audit results 
when assessing the level of work to be performed at 
each entity.

In assessing the risk of material misstatement to 
the Group financial statements, and to ensure we 
had adequate quantitative coverage of significant 
accounts in the financial statements, of the 15 
reporting components of the Group, we selected 13 
components covering entities all within the UK, which 
represent the principal business units within  
the Group.

Of the 13 components selected, we performed an 
audit of the complete financial information of 3 
components (“full scope components”) which were 
selected based on their size or risk characteristics. 
For the remaining 10 components (9 “specific scope 
components” and 1 “specified procedures”), we 
performed audit procedures on specific accounts 
within that component that we considered had the 
potential for the greatest impact on the significant 
accounts in the financial statements either because 
of the size of these accounts or their risk profile.   

The net profit of the Group is split between 7 profit 
making entities of £5.6m and 8 (1 nil profit) loss 
making entities of £3.2m.  We performed procedures 

on 2 full scope components, 4 specific scope and 1 
specified procedure which accounted for 100% of 
the profit and procedures on 1 full scope component 
and 5 specific scope components which accounted 
for 98% of the loss-making entities.

The reporting components where we performed 
audit procedures accounted for 100% (2018: 97%) 
of the Group’s Revenue and 95% (2017: 63%) of the 
Group’s Total assets. For the current year, the full 
scope components contributed 93% (2017: 95%) of 
the Group’s Revenue used to calculate materiality, 
and 59% (2018: 58%) of the Group’s Total assets. 
The specific scope components contributed 7% 
(2018: 6%) of the Group’s Revenue used to calculate 
materiality and 36% (2018: 23%) of the Group’s Total 
assets. The audit scope of these components may not 
have included testing of all significant accounts of the 
component but will have contributed to the coverage 
of significant tested for the Group.  The 9 components 
were instructed to perform specific procedures 
over certain aspects of fixed asset verification, WIP 
valuation and current assets held for sale valuation. 

The remaining 2 component represented 0% of the 
Group’s Revenue. For this component, we performed 
other procedures, including analytical review and 
testing of intercompany eliminations to respond to 
any potential risks of material misstatement to the 
Group financial statements.

The charts below illustrate the coverage obtained 
from the work performed by our audit teams.

Revenue

Total 
assets

93% Full scope components

59% Full scope components

7% Specific scope components

36% Specific scope components

0% Other procedures

5% Other procedures

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Strategic ReportGovernance ReportFinancial StatementsGood Energy Annual Report 2019Governance ReportChanges from the prior year 

the likelihood of material misstatement is higher.

No significant changes identified in relation to prior 
year scoping.

Involvement with component teams 

All audit work performed for the purposes of the audit 
was undertaken by the Group audit team.

Our application of materiality 

We apply the concept of materiality in planning 
and performing the audit, in evaluating the effect of 
identified misstatements on the audit and in forming 
our audit opinion.  

Materiality

The magnitude of an omission or misstatement that, 
individually or in the aggregate, could reasonably be 
expected to influence the economic decisions of the  
users of the financial statements. Materiality provides  
a basis for determining the nature and extent of our  
audit procedures.

We determined materiality for the Group to be £1.0m 
million (2018: £0.9 million), which is 0.8% (2018: 
0.8%) of Revenue.  Up until 2016, Good Energy had 
a focus on revenue growth as their main strategic 
objective, during this time their profitability was 
fluctuating significantly.  Although the Group has 
recently changed their focus to sustainable profit 
growth, based on the continued use by the group 
of revenue growth as a KPI and the prominence 
accorded to revenue by analysts in their reports we 
believe that it continues to be appropriate to base our 
determination of materiality on revenue. This is also 
consistent with the prior year audit.

We determined materiality for the Parent Company 
to be £0.3 million (2018: £0.2 million), which is 1.6% 
(2018: 1.6%) of Equity.    

During the course of our audit, we reassessed initial 
materiality and updated it to reflect actual  
Revenue, having based our initial materiality on 
forecast Revenue.

Performance materiality

The application of materiality at the individual account 
or balance level.  It is set at an amount to reduce to an 
appropriately low level the probability that the aggregate 
of uncorrected and undetected misstatements  
exceeds materiality.

On the basis of our risk assessments, together 
with our assessment of the Group’s overall control 
environment, our judgement was that performance 
materiality was 50% (2018: 50%) of our planning 
materiality, namely £0.5m (2018: £0.45m).  We have 
set performance materiality at this percentage as 
our expectation, based on our understanding of the 
Group and the past history of misstatements, is that 

Audit work at component locations for the purpose 
of obtaining audit coverage over significant financial 
statement accounts is undertaken based on a 
percentage of total performance materiality. The 
performance materiality set for each component is 
based on the relative scale and risk of the component 
to the Group as a whole and our assessment of 
the risk of misstatement at that component.  In the 
current year, the range of performance materiality 
allocated to components was £0.1m to £0.4m.

Reporting threshold 

An amount below which identified misstatements are 
considered as being clearly trivial.

We agreed with the Audit Committee that we would 
report to them all uncorrected audit differences in 
excess of £0.05m (2018: £0.05m), which is set at 5% 
of planning materiality, as well as differences below 
that threshold that, in our view, warranted reporting 
on qualitative grounds.  

We evaluate any uncorrected misstatements against 
both the quantitative measures of materiality 
discussed above and in light of other relevant 
qualitative considerations in forming our opinion.

Other information 

The other information comprises the information 
included in the annual report set out on pages 1-87, 
other than the financial statements and our auditor’s 
report thereon. The directors are responsible for the 
other information. 

Our opinion on the financial statements does not 
cover the other information and, except to the extent 
otherwise explicitly stated in this report, we do not 
express any form of assurance conclusion thereon. 

In connection with our audit of the financial 
statements, our responsibility is to read the other 
information and, in doing so, consider whether the 
other information is materially inconsistent with the 
financial statements or our knowledge obtained 
in the audit or otherwise appears to be materially 
misstated. If we identify such material inconsistencies 
or apparent material misstatements, we are 
required to determine whether there is a material 
misstatement in the financial statements or a material 
misstatement of the other information. If, based on 
the work we have performed, we conclude that there 
is a material misstatement of the other information, 
we are required to report that fact.

We have nothing to report in this regard.

Opinions on other matters prescribed by the 
Companies Act 2006

In our opinion, based on the work undertaken in the 
course of the audit:

• 

• 

the information given in the strategic report and 
the directors’ report for the financial year for 
which the financial statements are prepared is 
consistent with the financial statements; and 

the strategic report and directors’ report have 
been prepared in accordance with applicable 
legal requirements.

Matters on which we are required to report  
by exception

In the light of the knowledge and understanding 
of the group and the parent company and its 
environment obtained in the course of the audit, we 
have not identified material misstatements in the 
strategic report or the directors’ report.

We have nothing to report in respect of the following 
matters in relation to which the Companies Act 2006 
requires us to report to you if, in our opinion:

• 

• 

• 

adequate accounting records have not been 
kept by the parent company, or returns adequate 
for our audit have not been received from 
branches not visited by us; or

the parent company financial statements are not 
in agreement with the accounting records and 
returns; or

certain disclosures of directors’ remuneration 
specified by law are not made; or

•  we have not received all the information and 

explanations we require for our audit.

Responsibilities of directors

As explained more fully in the directors’ responsibilities 
statement set out on pages 86-87, the directors 
are responsible for the preparation of the financial 
statements and for being satisfied that they give a 
true and fair view, and for such internal control as 
the directors determine is necessary to enable the 
preparation of financial statements that are free from 
material misstatement, whether due to fraud or error. 

In preparing the financial statements, the directors 
are responsible for assessing the group and parent 
company’s ability to continue as a going concern, 
disclosing, as applicable, matters related to going 
concern and using the going concern basis of 
accounting unless the directors either intend to 
liquidate the group or the parent company or to 
cease operations, or have no realistic alternative but 
to do so.

Auditor’s responsibilities for the audit of the 
financial statements 

Our objectives are to obtain reasonable assurance 
about whether the financial statements as a whole 
are free from material misstatement, whether due 
to fraud or error, and to issue an auditor’s report 
that includes our opinion. Reasonable assurance is a 
high level of assurance, but is not a guarantee that 
an audit conducted in accordance with ISAs (UK) 
will always detect a material misstatement when it 
exists. Misstatements can arise from fraud or error 
and are considered material if, individually or in the 
aggregate, they could reasonably be expected to 
influence the economic decisions of users taken on 
the basis of these financial statements.    

A further description of our responsibilities for the 
audit of the financial statements is located on the 
Financial Reporting Council’s website at https://www.
frc.org.uk/auditorsresponsibilities.  This description 
forms part of our auditor’s report.

Use of our report

This report is made solely to the company’s members, 
as a body, in accordance with Chapter 3 of Part 
16 of the Companies Act 2006.  Our audit work 
has been undertaken so that we might state to the 
company’s members those matters we are required 
to state to them in an auditor’s report and for no 
other purpose.  To the fullest extent permitted by 
law, we do not accept or assume responsibility to 
anyone other than the company and the company’s 
members as a body, for our audit work, for this report, 
or for the opinions we have formed. 

John Howarth  
(Senior statutory auditor)

for and on behalf of Ernst & Young LLP, Statutory 
Auditor

Bristol

3 June  2020

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Strategic ReportGovernance ReportFinancial StatementsGood Energy Annual Report 2019Governance ReportFinancial statements

Consolidated Statement of Comprehensive Income 

Consolidated Statement of Financial Position 

Parent Company Statement of Financial Position 

Consolidated Statement of Changes in Equity 

Parent Company Statement of Changes in Equity 

Consolidated Statement of Cash Flows 

Parent Company Statement of Cash Flows 

Notes to the Financial Statements 

 97

 98

 100

 102

 103

 104

 105

 106

96

Consolidated Statement of Comprehensive Income

For the year ended 31 December 2019

2019
Underlying

Note

2019 
Non-
underlying
items (note 7)

2019

2018

2018

Non-

2018

Underlying

underlying 

items

£000’s

£000’s

£000’s

£000’s

£000’s

£000’s

REVENUE

Cost of sales

GROSS PROFIT

Administrative expenses

OPERATING PROFIT

Finance income

Finance costs

Share of loss of associate

PROFIT BEFORE TAX

Taxation

PROFIT FOR THE YEAR FROM 
CONTINUING OPERATIONS

(Loss) from discontinued 
operations, before tax

Taxation on discontinued 
operations

6

6

7

7

11

12

19

6

13

124,258

(92,601)

31,657

-

-

-

124,258

116,915

(92,601)

(83,466)

31,657

33,449

(25,219)

(865)

(26,084)

(26,800)

6,438

166

(4,439)

(42)

2,123

(206)

(865)

5,573

6,649

-

-

-

166

16

(4,439)

(4,361)

(42)

-

(865)

1,258

2,304

164

(42)

(660)

1,917

(701)

1,216

1,644

6

(930)

13

(32)

-

-

(930)

(687)

(32)

(56)

PROFIT FOR THE PERIOD

955

(701)

254

901

OTHER COMPREHENSIVE INCOME:

Other comprehensive income for 
the year, net of tax

TOTAL COMPREHENSIVE 
INCOME FOR THE YEAR  
ATTRIBUTABLE TO OWNERS OF 
THE PARENT COMPANY

-

-

-

-

955

(701)

254

901

Earnings per share              Basic

                                                                                                            Diluted

Earnings per share 
(continuing operations)

Basic

14

14

14

5.9p

5.7p

(4.3p)

(4.2p)

1.6p

1.5p

5.6p

5.5p

11.8p

(4.3p)

7.5p

10.2p

Diluted

14

11.4p

(4.2p)

7.2p

10.0p

The notes on pages 106 to 168 form part of these financial statements.

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

116,915

(83,466)

33,449

(26,800)

6,649

16

(4,361)

-

2,304

(660)

1,644

(687)

(56)

901

-

901

5.6p

5.5p

10.2p

10.0p

97

Strategic ReportGovernance ReportFinancial StatementsGood Energy Annual Report 2019Financial statements 
 
Consolidated Statement of Financial Position

As at 31 December 2019

Company registered no: 04000623

Note

2019

£000’s

2018

£000’s

Non-current assets

Property, plant and equipment

Right of use assets

Intangible assets

Restricted deposit accounts

Equity investment in associate

Other interests in associate

Total non- current assets

Current assets

Inventories

Trade and other receivables

Restricted deposit accounts

Cash and cash equivalents

Disposal groups held for sale

Total current assets

TOTAL ASSETS

Equity and liabilities

Capital and reserves

Called up share capital 

Share premium account

Employee Benefit Trust shares

Retained earnings

Total equity attributable to members of the Parent 
Company

15

16

17

3

19

19

20

21

3

22

23

24

24

24

9,941

29,430

474

13,667

-

53,512

8,580

29,796

-

15,662

6,649

60,687

116,364

118,790

832

12,790

(549)

5,707

829

12,719

(810)

6,088

18,780

18,826

46,326

50,351

6,483

4,454

4,548

426

615

-

3,586

4,166

-

-

Non- current liabilities

Deferred taxation

Borrowings

Provisions for liabilities

Long term financial liabilties

Total non- current liabilities

Current liabilities

62,852

58,103

Borrowings and other financial liabilities

Trade and other payables

Short term financial liabilities

Total current liabilities

Total liabilities

25

26

28

19

26

29

19

903

56,744

1,294

39

927

54,464

1,446

-

58,980

56,837

3,057

35,487

60

38,604

97,584

6,263

36,864

-

43,127

99,964

TOTAL EQUITY AND LIABILITIES

116,364

118,790

The financial statements on pages 97 to 168 were approved by the Board of Directors on 3 June 2020 and 
signed on its behalf by: 

Juliet Davenport

Chief Executive 
3 June 2020

The notes on pages 106 to 168 form part of these financial statements.

98

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Strategic ReportGovernance ReportFinancial StatementsGood Energy Annual Report 2019Financial statements 
Parent Company Statement of Financial Position

As at 31 December 2019

Company registered no: 04000623

Non-current assets

Property, plant and equipment

Right of use assets

Intangible assets

Deferred taxation

Equity investment in associate

Other investment in associate

Investments

Total non- current assets

Current assets

Trade and other receivables

Amounts due from other group companies 

Deferred taxation

Cash and cash equivalents

Total current assets

TOTAL ASSETS

Equity and Liabilities

Capital and reserves

Share capital 

Share premium account

Employee Benefit Trust shares

Retained Earnings

Total Equity

Note

19

19

18

21

22

24

24

24

2019

£000’s

-

47

2

232

426

615

29,160

30,482

98

3,500

-

5,603

9,201

39,683

832

12,790

(549)

1,671

14,744

2018

£000’s

241

-

6

-

-

-

35,247

35,494

920

5,000

32

309

6,261

41,755

829

12,719

(804)

3,862

16,606

Non- current liabilities

Long term financial liabilities

Borrowings

Total non- current liabilities

Current liabilities

Borrowings and other financial liabilities

Trade and other payables

Short term financial liabilities

Total current liabilities

Total liabilities

TOTAL EQUITY AND LIABILITIES

19

26

26

29

19

39

16,790

16,829

7,802

248

60

8,110

24,939

39,683

-

17,275

17,275

7,534

340

-

7,874

25,149

41,755

The Parent Company’s loss for the financial year was £1,554,978 (2018: gain of £305,059). The financial 
statements on pages 97 to 168 were approved by the Board of Directors on 3 June 2020 and signed on its 
behalf by:

Juliet Davenport

Chief Executive 
3 June 2020

The notes on pages 106 to 168 form part of these financial statements.

100

101

Strategic ReportGovernance ReportFinancial StatementsGood Energy Annual Report 2019Financial statements 
 
 
Consolidated Statement of Changes in Equity

Parent Company Statement of Changes in Equity

For the year ended 31 December 2019

For the year ended 31 December 2019

Note

Called 
up share  
capital

Share 
premium 
account

EBT shares

Retained
earnings

Total 
equity

£000’s

£000’s

£000’s

£000’s

£000’s

Note

Share  
capital

Share 
premium 
account

EBT 
shares

Retained
earnings

Total 
equity

£000’s

£000’s

£000’s

£000’s

£000’s

826

12,652

(946)

5,553

18,085

At 1 January 2018

826

12,652

(946)

3,858

16,390

At 1 January 2018

Profit for the year

Other comprehensive income for the year

Total comprehensive income for the year

Share based payments

Tax charge relating to share  
option scheme

Issue of ordinary shares

Exercise of options

Dividend paid

32

25

24

32

30

Total contributions by and distributions to 
owners of the parent, recognised directly 
in equity

-

-

-

-

-

3

-

-

3

-

-

-

-

-

67

-

-

67

-

-

-

-

-

-

136

-

901

-

901

358

901

-

901

358

(65)

(65)

-

(127)

70

9

(532)

(532)

136

(366)

(160)

At 31 December 2018

829

12,719

(810)

6,088

18,826

Profit for the year and total 
comprehensive income

Share based payments

Issue of ordinary shares

Exercise of options

Dividend paid

At 31 December 2018

At 1 January 2019

Loss for the year and total 
comprehensive income

Share based payments

Exercise of options

Dividend paid

-

-

3

-

-

-

-

67

-

-

-

-

-

142

-

305

358

-

(127)

305

358

70

15

(532)

(532)

829

12,719

(804)

3,862

16,606

829

12,719

(804)

3,862

16,606

-

-

-

3

-

-

-

71

-

-

255

-

(1,555)

(1,555)

81

(133)

81

122

(584)

(510)

32

24

32

30

32

32

30

At 1 January 2019

Profit for the year

Other comprehensive income for the year

Total comprehensive income for the year

Share based payments

Exercise of options

Dividend paid

32

32

30

Total contributions by and distributions to 
owners of the parent, recognised directly 
in equity

829

12,719

(810)

6,088

18,826

At 31 December 2019

832

12,790

(549)

1,671

14,744

The notes on pages 106 to 168 form part of these financial statements.

-

-

-

-

-

3

3

-

-

-

-

-

71

71

-

-

-

-

261

-

254

-

254

81

(132)

254

-

254

81

129

(584)

(510)

261

(635)

(300)

At 31 December 2019

832

12,790

(549)

5,707

18,780

The notes on pages 106 to 168 form part of these financial statements.

102

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Strategic ReportGovernance ReportFinancial StatementsGood Energy Annual Report 2019Financial statementsConsolidated Statement of Cash Flows

Parent Company Statement of Cash Flows

For the year ended 31 December 2019

For the year ended 31 December 2019

Note

Cash flows from operating activities

Cash generated from operations

31

Finance income

Finance cost

Income tax received

2019

£000’s

8,146

59

2018

£000’s

18,069

16

(4,090)

(4,156)

-

66

Cash flows from operating activities

Cash used in operations

31

(2,025)

(3,641)

Note

2019

£000’s

2018

£000’s

Finance income

Finance cost

Corporation tax

2

(789)

-

-

(1,137)

(32)

Net cash flows generated from operating activities

4,115

13,995

Net cash flows used in operating activities

(2,812)

(4,810)

Cash flows from investing activities

Purchase of property, plant and equipment

Purchase of intangible fixed assets

Disposal of assets

Deposits into restricted accounts

Equity investment in associate

Other investment in associate

Net cash flows generated/(used) from/(in)  
investing activities

Cash flows from financing activities

Payments of dividends

Proceeds from borrowings

Repayment of borrowings

Capital repayments of leases

Proceeds from issue of shares

Proceeds from sale of share options

17

5

19

19

30

(112)

(1,834)

5,037

(857)

(277)

(600)

1,357

(510)

-

(6,311)

(769)

-

123

(326)

(1,287)

-

(946)

-

-

(2,559)

(462)

-

(8,655)

(447)

70

-

Net cash flows used in financing activities

(7,467)

(9,494)

Net (decrease)/increase in cash and cash 
equivalents

Cash and cash equivalents at beginning of year

Cash and cash equivalents at end of year

(1,995)

1,942

15,662

13,667

13,720

15,662

Cash flows from investing activities

Purchase of property, plant and equipment

Purchase of intangible fixed assets

Disposal of assets

Equity investment in associate

Other investment in associate

Net cash flows generated/(used) from/(in)  
investing activities

Cash flows from financing activities

Payment of dividends

Cash dividend received

Repayment of borrowings

Proceeds from intercompany loans

Repayments of intercompany loans

Capital repayments of leases liabilities

Proceeds from the exercise of share options

Net cash generated from financing activities

Net increase/(decrease) in cash and cash 
equivalents

Cash and cash equivalents at beginning of year

Cash and cash equivalents at end of year

5

19

19

30

-

-

5,423

(277)

(600)

4,546

(510)

5,000

(3,625)

2,983

-

(411)

123

3,560

5,294

309

5,603

-

(6)

-

-

-

(6)

(462)

-

(4,635)

10,386

(355)

(447)

70

4,557

(259)

568

309

The notes on pages 106 to 168 form part of these financial statements.

The notes on pages 106 to 168 form part of these financial statements.

104

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Strategic ReportGovernance ReportFinancial StatementsGood Energy Annual Report 2019Financial statements 
Notes to the Financial Statements

Notes to the Financial Statements

1. General Information

2. Summary of Significant Accounting Policies (continued)

Good Energy Group PLC ("the Company") is listed on the Alternative Investment Market of the London Stock 
Exchange, is incorporated in England and Wales and domiciled in the United Kingdom.  The Group's shares are 
publicly traded. The registered office is located at Monkton Reach, Monkton Hill, Chippenham, Wiltshire, SN15 
1EE, United Kingdom.

The ultimate parent of the Group is Good Energy Group PLC. There is no ultimate controlling party of  
the Group.

The principal activities of Good Energy Group PLC are those of a holding and management company to the 
Group and a lender to, and seller of, generation development sites.

The principal activities of its subsidiaries include the purchase, generation and sale of electricity from 
renewable sources, as well as the sale of gas and services relating to micro-renewable generation.

The purpose of the Annual Report and Financial Statements is to provide information to members of the 
Company and its subsidiaries (together "the Group"). It contains certain forward looking statements relating 
to the operations, performance and financial condition of the Group. By their nature, these statements involve 
uncertainty since future events and circumstances can differ from those anticipated. Nothing in the Annual 
Report and Financial Statements should be construed as a profit forecast.

These financial statements are presented in pounds sterling, which is the functional currency and 
presentational currency of the Group, as this is the currency of the primary environment in which the Group 
operates. All values are rounded to the nearest thousand (£000), except where otherwise indicated.

The principal accounting policies applied in the preparation of these consolidated financial statements are set 
out below. These policies have been consistently applied to all the years presented, unless otherwise stated.

2. Summary of Significant Accounting Policies

2.1 Basis of preparation of financial statements

These financial statements have been prepared in accordance with International Financial Reporting 
Standards (IFRS) as adopted by the European Union and IFRS Interpretations Committee (IFRIC) and with 
those parts of the Companies Act 2006 applicable to companies reporting under IFRS. 

The financial statements have been prepared on a going concern basis and under the historical cost 
convention or historic cost modified by revaluation of financial assets and financial liabilities held at fair value 
through profit or loss. 

The preparation of financial statements in conformity with IFRS requires the use of estimates and assumptions 
that affect the reported amounts of assets and liabilities at the date of the financial statements and the 
reported amounts of revenues and expenses during the financial year. 

Although these estimates are based on management’s reasonable knowledge of the amount, event or actions, 
actual results ultimately may differ from those estimates. The critical accounting judgements, estimates and 
assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets 
and liabilities within the next financial year are discussed in note 4, and in the following accounting policy 
notes: revenue recognition (2.5), property, plant and equipment (2.6), leases (2.7), inventories (2.11) and  
credit risk (3.1.3). 

2.2 Basis of consolidation

The consolidated financial statements comprise the financial statements of the Group and its subsidiaries as 
at 31 December 2019. Control is achieved when the Group is exposed, or has rights, to variable returns from 
its involvement with the investee and has the ability to affect those returns through its power over the investee. 
Specifically, the Group controls an investee if, and only if, the Group has:

• 

• 

• 

Power over the investee (i.e. existing rights that give it the current ability to direct the relevant activities of 
the investee).

Exposure, or rights, to variable returns from its involvement with the investee.

The ability to use its power over the investee to affect its returns.

Generally, there is a presumption that a majority of voting rights result in control. To support this presumption, 
and when the Group has less than a majority of the voting or similar rights of an investee, the Group considers 
all relevant facts and circumstances in assessing whether it has power over an investee, including:

• 

• 

• 

The contractual arrangement with the other vote holders of the investee.

Rights arising from other contractual arrangements.

The Group’s voting rights and potential voting rights.

The Group reassesses whether or not it controls an investee if facts and circumstances indicate that there are 
changes to one or more of the three elements of control. Consolidation of a subsidiary begins when the Group 
obtains control over the subsidiary and ceases when the Group loses control of the subsidiary. 

Assets, liabilities, income and expenses of a subsidiary acquired or disposed of during the year are included in 
the consolidated financial statements from the date the Group gains control until the date the Group ceases 
to control the subsidiary.

Profit or loss and each component of other comprehensive income (OCI) are attributed to the equity holders 
of the Parent of the Group and to the non-controlling interests, even if this results in the non-controlling 
interests having a deficit balance. When necessary, adjustments are made to the financial statements of 
subsidiaries to bring their accounting policies into line with the Group’s accounting policies. 

All intra-group assets and liabilities, equity, income, expenses and cash flows relating to transactions between 
members of the Group are eliminated in full on consolidation. 

A change in the ownership interest of a subsidiary, without a loss of control, is accounted for as an  
equity transaction. 

If the Group loses control over a subsidiary, it derecognises the related assets (including goodwill), liabilities, 
non-controlling interest and other components of equity while any resultant gain or loss is recognised in profit 
or loss. Any investment retained is recognised at fair value. 

2.3  Going concern 

The financial statements have been prepared on the going concern basis, with material uncertainty, as 
the Directors have assessed that there is a reasonable expectation that the Group will be able to continue 
in operation and meet its commitments as they fall due over the going concern period. However, with the 
current outbreak of COVID 19 in the UK, there is uncertainty over lockdown periods and economic conditions 
which cause decreases in electricity consumption and decreases the ability for customers to pay debts as 
they fall due. This uncertainty means the Group may be unable to fully repay its bondholders if this becomes 
due on June 2021 and may mean the Group breaches its counterparty covenant. 

The Group is actively monitoring the impact of COVID-19 on its business and has put in place a number of 
mitigations to minimise the impact. The Group has been working with a variety of stakeholders to ensure 
our UK focused business is well placed to respond. The implementation of our new customer technology 
platform is progressing as planned which provides us with future flexibility to operate and deliver all services 
to customers. We now have our full business of just under 300 people successfully working remotely. All core 
business functions including customer care are functioning as expected although we are needing to make 
adjustments, such as encouraging substantial self-serve on meter reading etc, given those third-party face to 
face operations are being substantially curtailed. 

106

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Notes to the Financial Statements

2. Summary of Significant Accounting Policies (continued) 

2.4 Change in accounting policies and disclosures

The Group applied IFRS 16 Leases for the first time. The nature and effect of the changes as a result of 
adoption of these new accounting standards are described below. 

Several other amendments and interpretations apply for the first time in 2019, but are not considered to have 
a material impact on the consolidated financial statements of the Group. The Group has not early adopted 
any standards, interpretations or amendments that have been issued but are not yet effective. 

IFRS 16 Leases

IFRS 16 Leases supersedes IAS 17 Leases, along with three Interpretations: IFRIC 4 Determining whether an 
Arrangement contains a Lease, SIC 15 Operating Leases – Incentives, and SIC 27 Evaluating the Substance of 
Transactions Involving the Legal Form of a Lease.

The standard sets out the principles for the recognition, measurement, presentation and disclosure of leases.  
As a lessee, the adoption of this standard requires the Group to recognise a right-of-use asset and a related 
lease liability on the Statement of Financial Position. The Group has no leasing activities as a lessor. The 
standard provides specific transition requirements and practical expedients, which have been applied by the 
Group as detailed below.

The Group adopted IFRS 16 using the modified retrospective approach, with the date of initial application of 
1 January 2019. Under this approach, the standard is applied retrospectively, with any cumulative effect of 
initially adopting IFRS 16 being recognised within equity as an adjustment to the opening balance of retained 
earnings for the current period.  

For the Group however, there was no impact on opening retained earnings, as the right-of-use assets in 
respect of newly recognised leases under IFRS 16 were recognised at an amount equal to the lease liabilities, 
adjusted for any accrued or prepaid lease payments. For existing leases, the net book values as at 1 January 
2019 were reclassed from property, plant and equipment to right-of-use assets on transition to IFRS 16. 
Comparatives have not been restated as permitted under the specific transition provisions within the standard.

Upon adoption, the Group applied a single recognition and measurement approach for all leases, with the 
exception of those identified as low-value, or as having a remaining lease term of less than 12 months from the 
date of initial application. This approach will continue to be applied in respect of all subsequent leases.

Please refer to note 2.7.2 for the accounting policy for leases beginning from 1 January 2019.

Additionally, the Group elected to use the transition practical expedient available to not reassess whether 
a contract is, or contains, a lease as at 1 January 2019. Therefore, the Group has applied the standard to 
contracts that were previously identified as leases under IAS 17 and IFRIC 4 as at 1 January 2019.

2. Summary of Significant Accounting Policies (continued)

2.3  Going concern (continued)

The operation of generation sites has been unaffected during the lockdown period. Sites can operate without 
human intervention, and contractors have been able to attend site for any required maintenance as they 
are exempt from travel restrictions due to utilities being an essential service. While it is difficult to forecast the 
impact of COVID 19, the Group’s day-to-day operations continue without being materially affected. 

Early indications have shown a 10-15% increase in demand for domestic electricity and gas with domestic 
customers accounting for approximately 55% of Good Energy’s supply cash flow. We have seen a reduction 
of approximately 25% in electricity demand from our business customers. Business customers account for 
approximately 45% of Good Energy’s supply cash flow. We have currently seen no deterioration in direct 
debit or pay on receipt of bill cash receipts from customers since the start of the COVID-19. However, as the 
lockdown period continues, and an economic downturn commences we are expecting an impact on business 
and domestic customers’ ability to pay for energy usage. 

The Group has spent considerable time assessing the potential impacts that COVID-19 could have on our 
operations. This assessment has taken in to account the current measures being put in place by the Group to 
preserve cash and reduce discretionary expenditure, and potential reductions in revenues resulting from the 
economic impact on domestic and business customers due to lockdown and an expected economic downturn. 
It also assumes that there are no overdraft or additional loan facilities in place. 

The Group has long standing and well operated trading relationships with a number of counterparties, the 
majority of which contain an agreement that the Group’s Tangible Net Worth (defined as paid up shareholder 
cash contributions plus retained earnings) should not decrease by more than 25% over a 12 month period 
or fall to below a certain level. Tangible Net Worth covenants are tested annually on publication of audited 
financial statements. Breach of this financial covenant allows counterparties, if they so decide, to request 
additional financial support (which may be in the form of a parent company guarantee, letter of credit or other 
financial security). The counterparty may terminate the contract if appropriate additional financial security 
is not provided, if requested, within a timely manner. The value at risk with counterparties based upon current 
commodity contracts and current market prices is estimated at approximately £2m.

The group’s borrowings with GCP, amounting to £33.8m, contains two covenants being a debt service cover 
ratio and a loan life cover ratio specifically associated with the generation assets. Compliance with these 
covenants is based on generation prices and volumes, which the Board has concluded are not materially 
affected by COVID-19. 

The Board has considered a Downside Case which assumes the reduced energy usage during a lockdown 
period of four months, assumes that 10% of domestic customers and 25% of business customers make no 
payments during this period, that 30% of these debts are not subsequently collected within a twelve-month 
period and that 50% of bondholders elect to redeem their bonds in June 2021. The Downside Case indicates 
that the Company is compliant with the counterparty covenant test and able to operate for twelve months 
from the date of approval of the Annual Report and Accounts.

Given the uncertainty over the lockdown period and collection rates, this has been sensitised under a plausible 
reverse cash stress test such that the lockdown period extends to six months, that 30% of domestic customers 
and 40% of business customers make no payments during this period, that 50% of these debts are not 
subsequently collected and that 100% of bondholders elect to redeem their bonds. Under this scenario, the 
Group would have sufficient cash to repay the bond in full in June 2021, with nil cash balance remaining, and 
would be compliant with its counterparty covenant.  

It is plausible that lockdown periods in the going concern period are over a period of longer than six months, or 
the impacts on cash collection is worse than the scenarios above. If either of these were the case in addition 
to the reverse cash stress test scenario, the Group would breach its counterparty covenant and/or would have 
insufficient cash to repay the bond in full in June 2021. 

The Directors are confident that further mitigating actions could be taken by inception of new banking facilities, 
the sale of generation sites, issuing new equity or ensuring a waiver from the counterparty covenant breach. 
However at this point, these plans, whilst under contemplation by the Board, are not in place and therefore the 
risk of not being able to mitigate the liquidity risk including the breach of the counterparty covenant represent 
material uncertainty that may cast doubt over the Group’s ability to continue to apply the going concern basis 
of accounting.

Notwithstanding the material uncertainty described above, after making enquiries and assessing the progress 
against forecast, projections and status of the mitigating actions referred to above, the Directors have a 
reasonable expectation that the Group will continue in operation and meets its commitments as they fall 
due over the going concern period. Accordingly, the Directors continue to adopt the going concern basis in 
preparing the financial statements.

108

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Notes to the Financial Statements

2. Summary of Significant Accounting Policies (continued) 

2. Summary of Significant Accounting Policies (continued) 

2.4 Change in accounting policies and disclosures (continued)

The effect of adoption of IFRS 16 as at 1 January 2019  is as follows:

• 

Right-of-use assets with a net book value of £7,636,000 were recognised and presented separately in the 
Statement of Financial Position. This comprises:

(a) 

lease assets recognised previously under finance leases with a net book value of £241,000 reclassified  
from property, plant and equipment;

(b) 

lease assets recognised previously under finance leases with a net book value of £511,000 reclassified  
from property, intangible assets, and

(c)  decommissioning provisions related to the right-of-use assets with a net book value of £1,200,000, also  

reclassified from property, plant and equipment.

•  Newly recognised right-of-use assets on transition to IFRS 16 of £5,684,000.

•  Additional lease liabilities of £5,684,000 were recognised within borrowings.

Lease liabilities in respect of finance leases existing prior to the implementation of IFRS 16 amounted to 
£126,000 as at 1 January 2019.

For the year ended 31 December 2019:

• 

• 

• 

The depreciation expense increased due to the depreciation/amortisation of additional assets recognised 
(being the increase in right-of-use assets, net of the decrease in property, plant and equipment). This 
resulted in increases in cost of sales and administrative expenses of £202,000 and £388,000 respectively.

The rent expense included within administration expenses relating to previous operating leases decreased 
by £729,000.

Finance costs increased by £370,000, relating to the interest expense on additional lease liabilities 
recognised.

•  Cash outflows from operating activities decreased by £359,000 relating to lease payments in respect of 

previous operating leases. Cash outflows from financing activities increased by the same amount as a 
result, relating to the principal element of lease payments related to these new leases recognised under 
IFRS 16 as at 1 January 2019.

The Group has lease contracts for the access to, and use of, land on which its generation assets are located, 
office buildings, other equipment (including printers, laptops and coffee and water machines) and other IT 
equipment. Prior to the adoption of IFRS 16, the Group classified each of these leases (as a lessee) as either a 
finance lease or an operating lease. 

Please refer to note 2.7.1 for the accounting policy for leases prior to 1 January 2019.

For leases previously classified as finance leases, the Group did not change the initial carrying value of the 
assets and liabilities previously recognised at the date of initial application. 

Consequently, the carrying values of the right-of-use assets and lease liabilities as at 1 January 2019 equal the 
carrying values immediately before this date, as recognised under IAS 17. The requirements of IFRS 16 were 
therefore applied to these leases from 1 January 2019.

2.4 Change in accounting policies and disclosures (continued)

• 

For those leases not identified as low value or short-term, the Group recognised right-of-use assets and 
lease liabilities. The right-of-use assets were recognised at an amount equal to the lease liability, adjusted 
for any prepaid or accrued lease payments that existed at the date of initial application.

The lease liabilities were recognised based on the present value of the lease payments which remain unpaid 
at the date of initial application, discounted using the incremental borrowing rate at that same date.

In applying IFRS 16 for the first time, the Group elected to use the following practical expedients as permitted 
by the standard:

• 

• 

Use of a single discount rate to a portfolio of leases with reasonably similar characteristics.

Reliance upon its historical assessment of whether leases are onerous immediately before the date of 
initial application, eliminating the need to perform an impairment review under IAS 36 Impairment of 
Assets, on the right-of-use assets recognised.

•  Application of the short-term lease exemptions to leases with a lease term ending within 12 months of the 

date of initial application.

• 

• 

Exclusion of initial direct costs from the measurement of the right-of-use assets at the date of  
initial application.

Use of hindsight in determining the lease term, when considering options to extend or terminate the lease.

On transition to IFRS 16, the weighted average incremental borrowing rate applied to lease liabilities 
recognised was 6.51%, as a result of a range of incremental borrowing rates used from between 4.75%  
and 7.15%.  

The lease liabilities as at 1 January 2019 can be reconciled to the operating lease commitments as at 31 
December 2018 as follows:

Operating lease commitments as at 31 December 2018

Commitments relating to short-term leases

Commitments relating to leases of low-value assets

Lease commitments in respect of generation site sold during the year

Reassessments of lease terms, and RPI increases on transition to IFRS 16

Minimum lease payments on finance lease liabilities (notional amount) as at 31 
December 2018

Gross lease liabilities as at 1 January 2019

£000’s

8,874

-

(3)

(895)

(96)

7,880

126

8,006

3,695

(5,891)

5,810

For leases previously accounted for as operating leases, the following have been applied by the Group:

Effect of changes in lease payments and terms

• 

For leases identified as low value, or as short-term (i.e. having a remaining lease term of less than 12 
months from the date of initial application), the Group has elected to apply the recognition exemption  
and practical expedient to not recognise right-of-use assets. Instead, the lease expense will be 
accounted for on a straight-line basis over the remaining lease term and recognised in the Statement of 
Comprehensive Income.

Effects of discounting

Net lease liabilities as at 1 January 2019

The operating lease commitments at 31 December 2018 did not include the effect of minimum increases in 
lease payments. The lease payments have been corrected in the adoption of the new standard to reflect the

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2. Summary of Significant Accounting Policies (continued) 

2.4 Change in accounting policies and disclosures (continued) 

contractual minimum uplift in annual lease payments. Additionally, in the year the lease terms of the Group’s 
two offices were reassessed for the plans to relocate our offices, these leases terms have therefore been 
updated from those used in the prior year calculation of operating lease commitments.

The disclosures in respect of leases can be found per note 16.

2.5 Revenue recognition 

The Group is in the business of providing supplies of electricity and gas, the generation of power, the sale of 
generation development sites, as well as Feed-in-Tariff (FiT) administration services. Revenue from contracts 
with customers is recognised when control of the goods or services is transferred to the customer at an 
amount that reflects the consideration to which the Group expects to be entitled in exchange for those goods 
or services. The Group has generally concluded that it is the principal in its revenue arrangements, except for 
the FiT administration services below, because it typically controls the goods or services before transferring to  
the customer. 

The disclosures of significant accounting judgements, estimates and assumptions relating to revenue from 
contracts with customers are provided in notes 4.1.1 and 4.2.1. 

A contract liability is the obligation to transfer goods or services to a customer for which the Group has 
received consideration (or an amount of consideration is due) from the customer. 

If a customer pays consideration before the Group transfers goods or services to the customer, a contract 
liability is recognised when the payment is made or when the payment is due (whichever is earlier). Contract 
liabilities are recognised as revenue when the Group performs under the contract. The Group recognises 
contract liabilities when customers are in a credit position.

2.5.1 Power supply

Revenue for the supply of electricity is accrued based on industry data flows and National Grid data. Revenue 
calculated from energy sales includes an estimate of the quantity in units of electricity or gas supplied to 
customers by profile class in the 12 months preceding the end of the period, and an estimate of the average 
sales price per unit, and standing charge.

15% of the total revenue figure is estimated, with a fixed transaction price and estimated unit consumption. 
The estimate is made using historical consumption patterns, industry estimated consumption rates, and takes 
into consideration industry reconciliation processes, upon which the Group takes a prudent position until final 
reconciliation data is available from the industry 14 months after the supply date. 

Unbilled revenue is superseded when customer meter reads are received; at which point estimates are 
adjusted to actual usage. Transaction price is explicitly stated per unit and per day. Unbilled revenue is 
estimated using the most likely outcome approach.  

For gas, revenue is accrued based on information received from the Group’s gas shipper, Contract Natural 
Gas Limited, which includes details of all the sites held, their estimated annual quantities of gas used adjusted 
by a pre-determined weather correction factor. This information is subsequently adjusted and invoiced based 
on customer and industry meter reads. Transaction price is explicitly stated per unit and per day. 

Revenue is recognised over time as the electricity or gas is delivered to the customer. The transaction price 
is clearly stated, there are no separate performance obligations to which a portion of the transaction price 
needs to be allocated, and there is no variable consideration. Discounts are given to 100% of customers who 
meet certain criteria, and a provision is built up monthly to account for these, offsetting against revenue over 
time as the discount is incurred, which is in line with IFRS 15 Revenue from Contracts with Customers.

For electricity and gas supply, payment is collected either as a direct debit or paid on receipt of bill in arrears. 
Overdue amounts are reviewed regularly for impairment and provision made as necessary. No refunds, returns 
or warranties are applicable. 

Notes to the Financial Statements

2. Summary of Significant Accounting Policies (continued) 

2.5 Revenue recognition (continued) 

2.5.2 Feed-in-Tariff (FiT) revenue

Some of the generation sites receive FiT subsidy revenue from OFGEM. The FiT scheme (introduced in April 
2010) is a government scheme designed to promote the uptake of renewable generation technologies. FiT 
payments are received quarterly for the electricity that the generating asset has generated and exported in 
the period, based on meter readings supplied. This is a single performance obligation (to generate renewable 
electricity) and the transaction price is explicitly set out per unit of electricity generated. The performance 
obligation is satisfied immediately when the power is generated. Payment is received from OFGEM 
approximately 45 days after the end of the period of generation. No refunds, returns or warranties  
are applicable.

2.5.3 Feed-in-Tariff (FiT) administration services

The Group provides FiT administration services to micro-generators who are signed up to the FiT scheme. 
For FiT services, revenue is earned from OFGEM for administering the scheme, which is deemed to be the 
transaction price. For FiT services, revenue is recognised in two parts: there is an initial fee paid by OFGEM for 
taking on a generator, and then an ongoing amount that is received annually for provision of FiT services. 

The initial fee is spread over the period from when the customer signs up with Good Energy until the following 
April, when the FiT compliance year ends for a new customer, and the ongoing fee that is received is spread 
over the 12 month compliance period. No refunds, returns or warranties are applicable.

2.5.4 Renewable Obligation Certificates (ROCs) revenue recognition

ROCs are awarded to the Group from OFGEM based on generation of power. These ROCs are sold on receipt 
of certificates from OFGEM allowing transfer of title. ROC revenue is deemed to be subsidy revenue rather 
than revenue from contracts with customers. 

The amount of revenue recognised on sale is in accordance with a contractual agreement where the pricing 
is based on OFGEM’s minimum ROC value (the buy-out) and a prudent estimate of the re-cycle element of 
the final value of a ROC once all energy suppliers have complied or paid the penalty for non-compliance with 
the renewables obligation (the recycle). A final adjustment to ROC revenue and profit is recognised  
once OFGEM have announced the final out-turn ROC price, but this is not accounted for in advance of the 
receipt of the final out-turn price as the transaction price is not measurable.  The amount receivable is a 
contingent asset. 

The performance obligation is satisfied when the power is generated as this ensures the certificates are 
generated by OFGEM. There is a three-month delay from generation to invoice, and payment is made 5 days 
after receipt of the invoice. No refunds, returns or warranties are applicable.

2.5.5 Power generation revenue

Revenue is generated when the wind or solar asset produced power that is sold to Good Energy Limited 
through a Power Purchase Agreement at an arms length fixed price per MWh, which is the transaction 
price. The performance obligation is satisfied at a point in time; immediately when the power is generated. 
Payment is made no more than one month after the delivery month of the power ends. No refunds, returns or 
warranties are applicable.

2.5.6 Generation development site revenue recognition

Revenue is recognised in the date that control is passed, based on the sale and purchase agreement 
pertaining to each site sold.

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2. Summary of Significant Accounting Policies (continued) 

2. Summary of Significant Accounting Policies (continued) 

2.6 Property, plant and equipment 

2.7 Leases (the Group as a lessee) (continued)

Property, plant and equipment is stated at cost, net of accumulated depreciation and accumulated 
impairment losses. Cost includes the original purchase price of the asset and any costs attributable to bringing 
the asset to its working condition for its intended use. 

The Group recognises part of an asset when that cost is incurred, if the recognition criteria are satisfied. The 
carrying amount of the replaced part is derecognised. All other repaid and maintenance costs are charged to 
profit or loss in the period in which they are incurred.

Depreciation is calculated on a straight-line basis over the estimated useful life of the asset, less any estimated 
residual value, on the following bases: 

Fixtures, fittings and equipment 

between 3 and 5 years

Leasehold improvements  

over the life of the lease

Generation  assets  

between 20 and 29 years

Assets under construction  

not depreciated

Depreciation of property, plant and equipment is included in the Consolidated Statement of Comprehensive 
Income in those expense categories consistent with the function of the asset.

An item of property, plant and equipment is derecognised upon disposal (i.e. at the date on which the 
recipient obtains control), or when no future economic benefits are expected from its use or disposal. Any gain 
or loss arising on derecognition (being the difference between the carrying amount of the asset and the net 
disposal proceeds) is included in profit or loss, upon derecognition.

2.6.1 Impairment of property, plant and equipment (including right-of-use assets)

The useful economic lives of assets and their residual values are reviewed on an annual basis and revised 
where considered appropriate.  

At each reporting date, property, plant and equipment is reviewed for impairment if events or changes in 
circumstances indicate that the carrying amount may not be recoverable. Any impairment in carrying value is 
charged to the Statement of Comprehensive Income in those expense categories consistent with the function 
of the impaired asset, and is recognised in the period in which it occurs. 

2.7 Leases (the Group as a lessee)

2.7.1 Leases prior to 1 January 2019

Assets financed by leasing agreements that give rights approximating to ownership (finance leases) are 
capitalised at their fair value and depreciation or amortisation is provided over the lower of the useful life and 
term of the lease. The capital elements of future obligations under finance leases are included as liabilities in 
the Statement of Financial Position and the current year’s interest element, having been allocated to financial 
periods to give a constant periodic rate of charge on the outstanding liability, is charged to the Statement of 
Comprehensive Income.

Rentals applicable to operating leases where substantially all of the benefits and risks of ownership remain with 
the lessor are charged to the Statement of Comprehensive Income on a straight-line basis over the term of 
the lease.

2.7.2 Leases with effect from 1 January 2019

For any new contracts entered into on or after 1 January 2019, the Group performs an assessment at the 
inception of a contract to determine whether the contract is, or contains, a lease. A lease is defined as “a 
contract, or part of a contract, that conveys the right to control the use of an identified asset for a period of 
time in exchange for consideration”.

The Group applies a single recognition and measurement approach for all leases, with the exception of those 
which are short-term, or which comprise low-value assets. The Group recognises lease liabilities to make lease 
payments and right-of-use assets representing the right to use the underlying assets.

(a) 

Right-of-use assets

At the lease commencement date (i.e. the date on which the underlying asset is made available for use), the 
Group recognises a right-of-use asset on the Statement of Financial Position. Right-of-use assets are measured 
at cost, less any accumulated depreciation and impairment losses, and adjusted for any remeasurement of 
lease liabilities.

The cost of the right-of-use asset comprises:

• 

• 

• 

• 

the initial measurement of the lease liability,

any initial direct costs incurred by the Group,

an estimate of any costs required to dismantle or remove the asset at the end of the lease, and

any lease payments made in advance of the lease commencement date, net of any incentives received.

Right-of-use assets are depreciated on a straight-line basis from the lease commencement date to the earlier 
of the end of the estimated useful life of the right-of-use assets and the end of the lease term. If ownership 
of the leased asset transfers to the Group at the end of the lease term, or the cost reflects the exercise of a 
purchase option, depreciation is calculated using the estimated useful life of the asset.

The Group classifies its right-of-use assets in a manner consistent with that of its property, plant and 
equipment, which includes the application of the same estimated useful life bases - please see note 2.6 for 
details. 

The Group also assesses the right-of-use assets for impairment, when such indicators exist. Please refer to note  
2.6.1 for the accounting policy in respect of impairment.

(b) 

Lease liabilities

At the commencement date of the lease, the Group recognises lease liabilities measured at the present value 
of the lease payments to be made over the lease term. Lease payments included in the measurement of the 
lease liability include:

• 

• 

• 

fixed payments (including in-substance fixed payments) less any incentives receivable,

variable lease payments that depend on an index or rate, and

amounts expected to be paid under residual value guarantees.

The lease payments also include the exercise price of a purchase option that is reasonably certain to be 
exercised by the Group, along with payments of penalties for termination of the lease if the lease term reflects 
the Group exercising the option to terminate. Variable lease payments that do not depend on an index or rate 
are recognised as expenses in the period in which the event of condition that triggers the payment occurs. 

In calculating the present value of lease payments, the Group uses its incremental borrowing rate at the 
lease commencement date if the rate implicit in the lease is not readily determinable. Subsequent to initial 
measurement, the amount of lease liabilities is increased to reflect the accretion of interest and reduced to 
reflect lease payments made.

The carrying amount of lease liabilities is remeasured if there is a modification, a change in the lease term, a 
change in the lease payments (e.g. changes to future payments resulting from a change in an index or rate 
used to determine the lease payments) or a change in the assessment of an option to purchase the  
underlying asset.

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2. Summary of Significant Accounting Policies (continued) 

2. Summary of Significant Accounting Policies (continued) 

2.7 Leases (the Group as a lessee) (continued)

In the Statement of Financial Position, the Group's lease liabilities are included within borrowings (please refer 
to note 26).

(c) 

Short-term leases and leases of low value assets

The Group has elected to apply the recognition exemption in respect of short-term leases (i.e. those which 
have a lease term of 12 months from the lease commencement date, and do not contain a purchase option), 
as well as the recognition exemption applicable to leases of assets that are considered to be low value.  

Instead of recognising a right-of-use asset and lease liability, lease payments in relation to these are 
recognised as an expense in the Statement of Comprehensive Income, on a straight-line basis over the  
lease term.

2.8 Goodwill, intangible assets and amortisation 

Goodwill is measured as the difference between:

• 

the aggregate of: 

(i)   the value of consideration transferred (generally at fair value),

(ii)   the amount of any non-controlling interest, and

(iii)   the in a business combination achieved in stages, the acquisition date fair value of the acquirer's  

previously held equity interest in the acquiree, and

• 

the net of the acquisition-date amounts of the identifiable assets acquired and the liabilities assumed.

2.8.1 Definite life intangible assets 

Definite life intangible assets comprise software licences and website development costs, which meet the 
criteria of IAS 38 Intangible Assets, and are carried at cost less accumulated amortisation and impairment 
losses. Cost comprises purchase price from third parties as well as directly attributable internally generated 
development costs, where relevant.

2.8.2 Indefinite life intangible assets 

Indefinite life intangible assets comprise goodwill and the power supply licence. The power supply licence is 
held as an indefinite life intangible asset according to the criteria of IAS 38 Intangible Assets, and is carried at 
cost less accumulated impairment losses. Cost comprises purchase price from third parties as well as directly 
attributable internally generated development costs, where relevant.

2.8.3 Amortisation

Amortisation on definite life intangible assets is charged to the Consolidated Statement of Comprehensive 
Income (included within administrative expenses) on a straight-line basis over the estimated useful life of the 
intangible asset. The estimated useful lives for intangible assets with definite lives are as follows:

Software licenses  

between 3 and 10 years

Website development costs  

between 2 and 5 years 

Assets under the course of development   

not amortised

An intangible asset is derecognised upon disposal (i.e. at the date on which the recipient obtains control), 
or when no future economic benefits are expected from its use or disposal. Any gain or loss arising on 
derecognition (being the difference between the carrying amount of the asset and the net disposal proceeds) 
is included in profit or loss, upon derecognition.

2.8 Goodwill, intangible assets and amortisation (continued)

2.8.4 Impairment of intangible assets

The Directors regularly review intangible assets for impairment and provision is made if necessary. Assets 
with indefinite useful lives are not subject to amortisation, therefore are tested annually for impairment. Assets 
that are subject to amortisation are reviewed for impairment whenever events or changes in circumstance 
indicate that the carrying amount may not be recoverable. 

An impairment loss is recognised for the amount by which the asset's carrying amount exceeds its recoverable 
amount. The recoverable amount is the higher of an asset's fair value less costs to sell, and value in use. For 
the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately 
identifiable cash flows (cash-generating units). Non-financial assets other than goodwill that suffered an 
impairment are reviewed for possible reversal of the impairment at the end of each reporting period. Any 
impairment in carrying value is charged to the Statement of Comprehensive Income within administrative 
expenses and is recognised in the period in which it occurs.

2.9 Investments in associates

An associate is an entity over which the Group has significant influence. Significant influence is defined as "the 
power to participate in the financial and operating policy decisions of the investee, but is not control or joint 
control of those policies".

The considerations made in determining significant influence are similar to those necessary to determine 
control over subsidiaries. Generally, there is a presumption that a holding of 20% or more of the voting power 
of the investee results in significant influence. 

To support this presumption - and when the Group has less than a 20% holding - the Group considers all 
relevant facts and circumstances in assessing whether it has significant influence, including:

• 

• 

• 

Representation on the Board of Directors or equivalent governing body of the investee.

Participation in policy making processes.

The interchange of managerial personnel. 

The Group reassesses whether or not there is significant influence over an investee if facts and circumstances 
indicate that there are one or more changes to the above.

The Group's investments in associates are accounted for using the equity method. Under this method, the 
investment in the associate is initially recognised at cost. Subsequent movements in the carrying value of 
the investment are accounted for by realising the Group's share of the associate's profit or loss since the 
acquisition date, as well as any fair value movements in the associate's net assets.

Gains or losses from the associate's operating activities are recognised in the Consolidated Statement of 
Comprehensive Income, outside of operating profit. Any changes in OCI of the associate is presented as part 
of the Group's OCI. 

Goodwill relating to the associate is included in the carrying value of the investment, and is not separately 
tested for impairment.  Rather, the entire carrying amount of the investment is tested for impairment.

2.9.1 Impairment of investments in associates

The Group recognises an impairment loss if, and only if, there is a triggering event giving rise to objective 
evidence that the associate is impaired, and that the triggering event has an impact on the future estimated 
cash flows from the net investment that can be reliably estimated. Where such evidence exists, the Group 
calculates the amount of the impairment as the difference between the recoverable amount of the 
investment (being the higher of its value in use and its fair value less costs to sell) and its carrying value.

Any impairment is recognised within the "Share of Profit of Associate" line in the Consolidated Statement of 
Comprehensive Income.

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2. Summary of Significant Accounting Policies (continued) 

2. Summary of Significant Accounting Policies (continued) 

2.10 Investments in subsidiaries

The Parent Company holds investments in subsidiary companies and these are accounted for at cost less 
impairment in the Parent Company financial statements only.

2.11 Inventories 

2.11.1 Renewable Obligation Certificates (ROCs)

Under the provisions of the Utilities Act 2000, all electricity suppliers are required to procure a set percentage of 
their supplies from accredited renewable electricity generators. This obligation can be fulfilled by the purchase 
and surrender of ROCs originally issued to generators, or by making payments to OFGEM who then recycle the 
payments to purchasers of ROCs. Notwithstanding that Good Energy Limited, a subsidiary company, supplies 
electricity sourced entirely from renewable generation over a 12 month period, its percentage obligation to 
submit ROCs is set by OFGEM.  The cost obligation is recognised as electricity is supplied and charged as a  
cost of sale in the Consolidated Statement of Comprehensive Income. Any gains or losses on disposal of  
ROCs which are in excess of the Group’s compliance obligations are included as an adjustment to the 
compliance cost included within cost of sales. ROCs are valued at the lower of purchase cost and estimated 
realisable value.

2.11.2 Carbon Offset Instruments

Carbon Offset Instruments are used by the Group to offset emissions generated by gas supply, as part of 
the Group's green gas offering. These instruments are recognised as inventory at the lower of cost and net 
realisable value.

2.12 Financial instruments

2.12 Financial instruments (continued)

2.12.1 Financial assets at amortised cost (continued)

For trade receivables, which are reported net, such provisions are recorded in a separate allowance 
account with the loss being recognised within administrative expenses in the Consolidated Statement of 
Comprehensive Income. On confirmation that the trade receivable will not be collectable, the gross carrying 
value of the asset is written off against the associated provision.

Cash and cash equivalents comprise cash on hand and on demand deposits, and other short-term, highly 
liquid investments that are readily convertible to a known amount of cash and are subject to an insignificant 
risk of changes in value.

Restricted deposits are held by financing providers to cover debt service and maintenance expenses on 
generation sites to which the funding relates.

Short-term security deposits are held by trading exchanges to cover short-term electricity trades.

2.12.2 Financial assets and financial liabilities at fair value through profit or loss (FVTPL) and equity instruments

Financial instruments at fair value through profit or loss comprise financial assets consisting of secured 
convertible loan stock, and financial liabilities consisting of contingent consideration.

Both financial assets and financial liabilities at FVTPL are initially recognised at fair value in the Statement of 
Financial Position. Any fair value gains and losses on subsequent remeasurement are recognised directly in 
profit or loss.

Financial liabilities and equity instruments are classified according to the substance of the contractual 
arrangements entered into. 

The Group uses certain financial instruments in its operating and investing activities that are deemed 
appropriate for its strategy and circumstances.

An equity instrument is any contract that evidences a residual interest in the assets of the Group after 
deducting all of its liabilities. 

Financial instruments recognised on the Consolidated Statement of Financial Position include: cash and cash 
equivalents, trade receivables, trade payables, borrowings, and financial assets and financial liabilities at fair 
value through profit and loss. 

Financial assets and liabilities are recognised on the Consolidated Statement of Financial Position when the 
Group has become a party to the contractual provisions of the instrument.  

2.12.1 Financial assets at amortised cost

The Group’s financial assets at amortised cost comprise trade and other receivables and cash and cash 
equivalents in the Consolidated Statement of Financial Position. These assets are non-derivative financial 
assets with fixed or determinable payments that are not quoted in an active market, and are solely payments 
of principal and interest. They arise principally through the provision of goods and services to customers 
(e.g. trade receivables), but also incorporate other types of contractual monetary asset. They are initially 
recognised at fair value and are subsequently carried at amortised cost using the effective interest rate 
method, less allowances for expected credit losses (ECLs). These are held in a business model which intends to 
hold the financial assets to collect the contractual cash flows rather than through sale. Trade receivables are 
shown inclusive of unbilled amounts to customers.

The Group recognises an allowance for ECLs for all financial assets measured at amortised cost. ECLs are 
based on the difference between the contractual cash flows due in accordance with the contract and all the 
cash flows that the Group expects to receive. 

For trade receivables and contract assets, the Group applies a simplified approach in calculating ECLs. 
Therefore, the Group does not track changes in credit risk, but instead recognises a loss allowance based on 
lifetime ECLs at each reporting date. The Group has established a provision matrix that is based on its  
historical credit loss experience, adjusted for forward-looking factors specific to the debtors and the  
economic environment.

Details of the fair value estimation attributable to financial instruments at FVTPL can be found per note 3.3.

2.12.3 Trade and other payables

Trade payables are obligations to pay for goods or services that have been acquired in the course of ordinary 
business from suppliers.  Accounts payable are classified as current liabilities if payment is due within one year 
or less.  If not, they are presented as non-current liabilities. Trade payables are recognised initially at fair value 
and subsequently held at amortised cost.

2.12.4 Borrowings

The Group expenses borrowing costs over the term of the loan facility.  Where borrowing costs are 
attributable to the acquisition, construction or production of a qualifying asset, such costs are capitalised as 
part of the specific asset. Details of the Group’s borrowings are included in note 26.

2.13 Disposal groups held for sale

Disposal groups are classified as held for sale when their carrying amount is to be recovered principally 
through a sale transaction and the sale is highly probable. Disposal groups classified as held for sale are stated 
at the lower of carrying amount and fair value less costs to sell. They are not depreciated or amortised.

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2. Summary of Significant Accounting Policies (continued) 

2. Summary of Significant Accounting Policies (continued) 

2.14 Current and deferred taxation 

2.16 Share-based payments

The tax charge or credit included in the Consolidated Statement of Comprehensive Income for the period 
comprises current and deferred tax. Current and deferred tax is charged or credited to the Consolidated 
Statement of Comprehensive Income, except when it relates to items charged or credited directly to equity, in 
which case the current or deferred tax is also recognised within equity.

Current tax is the expected tax payable or receivable based on the taxable profit for the period. Taxable profit 
differs from net profit as reported in the Statement of Comprehensive Income as it excludes items of income 
or expense that are taxable or deductible in other years, and it further excludes permanent differences (i.e. 
items that are never taxable or deductible). 

Current income tax assets and liabilities are measured at the amount expected to be recovered from or 
paid to the taxation authorities. The tax rates and tax laws used to compute these amounts are those that 
are enacted or substantively enacted at the reporting date in the countries where the Group operates and 
generates taxable income. 

Management periodically evaluates positions taken in the tax returns with respect to situations in which 
applicable tax regulations are subject to interpretation and establishes provisions where appropriate.

Deferred tax is the expected tax payable or recoverable on temporary differences which arise between the 
carrying amount of assets and liabilities in the financial statements, and the corresponding tax bases used 
in the computation of taxable profit, and is provided for using the liability method. Deferred tax liabilities are 
generally recognised for all taxable temporary differences, and deferred tax assets are recognised to the 
extent that it is probable that taxable profits will be available against which deductible temporary differences 
can be utilised.  

Such assets and liabilities are not recognised if the temporary difference arises from goodwill or from the 
initial recognition (other than in a business combination) of other assets and liabilities in a transaction which 
affects neither the tax profit nor the accounting profit.  Deferred tax liabilities are recognised for taxable 
temporary differences arising in investments in subsidiaries except where the Group is able to control the 
reversal of the temporary difference and it is probable that the temporary difference will not reverse in the 
foreseeable future.

The carrying amount of deferred tax assets is reviewed at the end of each financial period and reduced to 
the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the 
asset to be recovered. Deferred tax is calculated based on tax rates and tax laws that are expected to apply 
in the period when the asset is realised or the liability is settled. 

Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax 
assets against current tax liabilities and when they relate to income taxes levied by the same taxation 
authority. The Group intends to settle its current tax assets and current tax liabilities on a net basis.

2.15 Decommissioning costs

Liabilities for decommissioning costs are recognised when the Group has an obligation to dismantle 
and remove the generation assets and restore the land on which it is located. Liabilities may arise upon 
construction of such facilities, upon acquisition or through a subsequent change in legislation or regulations. 
The amount recognised is the estimated present value of expenditure determined in accordance with local 
conditions and requirements. A corresponding tangible item of property, plant and equipment to the provision 
is also created. 

Any changes in the present value of the estimated expenditure is added to or deducted from the cost of the 
assets to which it relates. The adjusted depreciated amount is then depreciated prospectively over its useful 
economic life. The unwinding of the discount on the decommissioning provision is included in the Consolidated 
Statement of Comprehensive Income as a finance cost. The estimated future costs of decommissioning are 
reviewed annually and adjusted as appropriate. 

The Group applies IFRS 2 to share-based payments. The Group operates a share-based payment 
compensation plan, under which the entity grants key employees the option to purchase shares in the 
Company at a specified price maintained for a certain duration.

The Group operates an equity-settled, share-based compensation plan, under which the entity receives 
services from employees as consideration for equity instruments (options) of the Group. The fair value of the 
employee services received in exchange for the grant of the options is recognised as an expense. The total 
amount to be expensed is determined by reference to the fair value of the options granted:

• 

• 

• 

including any market performance conditions (e.g. an entity’s share price);

excluding the impact of any service and non-market performance vesting conditions (e.g. profitability, 
sales growth targets and remaining an employee of the entity over a specified time period), and

including the impact of any non-vesting conditions (e.g. the requirement for employees to save).

Non-market performance and service conditions are included in assumptions about the number of options 
that are expected to vest. The total expense is recognised over the vesting period, which is the period over 
which all of the specified vesting conditions are to be satisfied.

At the end of each financial period, the Group revises its estimates of the number of options that are expected 
to vest based on the non-market vesting conditions. It recognises the impact of the revision to original 
estimates, if any, in the Consolidated Statement of Comprehensive Income, with a corresponding adjustment  
to equity.

When the options are exercised, and the Group issues new shares to meet that obligation, the proceeds 
received net of any directly attributable transaction costs are credited to share capital (nominal value) and 
share premium.

2.17 Share capital

Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new ordinary 
shares or options are shown in equity as a deduction, net of tax, from the proceeds.

2.18 Pensions

The Group operates a defined contribution pension scheme. Under this scheme the Group pays contributions 
to publicly or privately administered pension insurance plans on a mandatory, contractual or voluntary basis. 
The Group has no further payment obligations once the contributions have been paid. The contributions are 
recognised as an employee benefit expense when they are due. The pension charge for the year represents 
the amounts payable by the Group in respect of the year.

2.19 Segmental reporting

Operating segments are reported in a manner consistent with the internal reporting provided to the chief 
operating decision maker. The chief operating decision maker has been identified as the Board of Directors. 
The Board of Directors review the Group’s internal reporting in order to assess performance and allocate 
resources. 

2.20 Finance income and finance costs

Finance income is received in respect of cash deposits and is recognised in the Statement of Comprehensive 
Income using the effective interest method. Finance costs comprise interest on external debt, finance lease 
interest costs and the amortisation of loan issue costs.  Finance costs are charged to the Statement of 
Comprehensive Income over the term of the debt using the effective interest method. Issue costs are initially 
recognised as a reduction in the proceeds of the associated capital instrument.

2.21 Dividend distribution

Dividend distribution to the Parent Company’s shareholders is recognised as a liability in the Group’s financial 
statements in the period in which the dividends are approved by the Parent Company’s shareholders. 

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Notes to the Financial Statements

3. Financial and Capital Risk Management

3. Financial and Capital Risk Management (continued) 

3.1 Financial risk factors 

The Group’s activities expose it to a variety of financial risks: liquidity risk, market risk (including currency risk, 
cash flow and fair value interest rate risk, and commodity price risk) and credit risk.  The Group’s overall risk 
management programme focuses on the unpredictability of financial markets and seeks to minimise potential 
adverse effects on the Group’s financial performance.  

3.1.1 Liquidity risk  

Liquidity risk is the risk that an entity will encounter difficulty in raising funds to meet cash flow commitments 
associated with financial instruments. The Group has cash resources available to it and prepares - in the 
operating entities of the Group - forecasts for the forthcoming year. In the Directors' opinion, these forecasts 
indicate that the Group will have sufficient resources to fund the continuation of trade. 

The Group monitors cash flow forecasts on a 'rolling forecast' basis to ensure it has sufficient cash to meet 
operational needs while maintaining enough headroom on its undrawn committed borrowing facilities at all 
times so as not to breach borrowing limits or covenants.

A maturity analysis of financial instruments based on contractual undiscounted cash flows is provided below:

Consolidated
31 December 2019

Less than  
1 year

Between 
 1 and 2 years

Between  
2 and 5 years

Over 5 years

Corporate bond

Borrowings

Lease liabilities

Trade and other payables

Total

£000’s

797

4,891

753

35,487

41,928

£000’s

17,722

4,694

626

-

£000’s

£000’s

-

14,571

1,073

-

-

37,109

8,457

-

23,042

15,644

45,566

Consolidated 
31 December 2018

Less than  
1 year

Between  
1 and 2 years

Between  
2 and 5 years

Over 5 years

Corporate bond

Borrowings

Trade and other payables

Total

£000’s

4,180

5,164

37,084

46,428

£000’s

832

4,893

-

5,725

£000’s

17,491

14,300

-

£000’s

-

41,321

-

31,791

41,321

3.1 Financial risk factors (continued)

3.1.1 Liquidity risk (continued)

Parent
31 December 2019

Less than  
1 year

Between 
 1 and 2 years

Between  
2 and 5 years

Over 5 years

Corporate bond

Borrowings

Lease liabilities

Loans from group companies

Trade and other payables

Total

£000’s

797

49

29

7,330

248

8,453

£000’s

17,722

-

27

-

-

17,749

£000’s

£000’s

-

-

7

-

-

7

-

-

-

-

-

-

Parent 
31 December 2018

Less than  
1 year

Between  
1 and 2 years

Between  
2 and 5 years

Over 5 years

£000’s

£000’s

Corporate bond

Borrowings

Loans from group companies

Trade and other payables

Total

4,180

425

3,344

340

8,289

832

79

-

-

911

£000’s

17,491

34

-

-

17,525

£000’s

-

-

-

-

-

Prior to the implementation of IFRS 16 Leases (with a date of initial application of 1 January 2019), lease 
liabilities relating to existing finance leases were included within borrowings (see note 26). 

IFRS 16 requires that the maturity analysis of lease liabilities are disclosed separately from the maturity 
analyses of other financial liabilities. Due to the modified retrospective approach of implementation as 
adopted by the Group, comparatives have not been restated as permitted under the specific provisions within 
the standard. Further details around the implementation of IFRS 16 can be found per note 2.4.

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Notes to the Financial Statements

3. Financial and Capital Risk Management (continued) 

3. Financial and Capital Risk Management (continued) 

3.1 Financial risk factors (continued)

3.1.2  Market Risk 

3.1.2a Currency risk 

The Group is exposed to foreign exchange risk arising from certain generation asset maintenance contracts 
which are payable in euros.  Management have set up a policy, that when it is deemed appropriate, the Group 
will forward buy euros against these contracts to reduce foreign exchange exposure. As at 31 December 
2019, no euros (2018: no euros) were purchased forward. The annual exposure to sterling euro exchange rate 
movements is currently £4,600 per one percent movement in the exchange rate.

3.1.2b Cash flow and fair value interest rate risk 

The financial risk is the risk to the Group’s earnings that arises from fluctuations in interest rates and the 
degree of volatility of these rates. For short-term bank overdraft facilities, the Group does not use derivative 
instruments to reduce its exposure to interest rate fluctuations as the policy of the Group is not to rely on short-
term borrowing facilities for any significant duration. The Directors use interest rate swaps if they consider their 
exposure to interest rate risk to be material. For long term borrowings, the Group may use interest rate swaps 
to fix the interest rate payable on these material balances in order to mitigate the risk of any fluctuations in 
interest rates. 

3.2 Capital risk management  

The Group’s objectives when managing capital are to safeguard the Group’s ability to continue as a going 
concern in order to provide returns to shareholders, and to maintain an optimal capital structure. 

The Group monitors capital on the basis of the gearing ratio calculated as net debt divided by total capital. 
Net debt is calculated as total borrowings (including 'current and non-current borrowings' as shown in the 
Consolidated Statement of Financial Position) less cash and cash equivalents.  Total capital is calculated as 
'equity' as shown in the Consolidated Statement of Financial Position, plus net debt.  The capital structure of 
the Group is as follows: 

Total borrowings

Less: cash in restricted deposit accounts (non-
current)

Note

26

2019

£000’s

59,801

2018

£000’s

60,727

(4,548)

(4,166)

Less: cash in restricted deposit accounts (current)

(474)

-

3.1.2c  Commodity price risk 

Less: cash and cash equivalents

22

(13,667)

(15,662)

The Group’s operations result in exposure to fluctuations in energy prices. Management monitors energy prices 
and analyses supply and demand volumes to manage exposure to these risks. The Group typically buys power 
forwards in order to mitigate some of the risk of commodity price fluctuations.

If the wholesale market moves significantly upwards or downwards, the price risk to the Group will depend 
upon a number of factors including the excess or deficiency of power being supplied by renewable power 
purchase contracts in place at the time. The Group may be required to pass on the price risk to customers. 
Retail prices can be amended with 30 days’ advance notification to customers. The Group closely  
monitors movements in the wholesale market and assesses trends, so it is ready to take necessary action  
when required.

Vertical integration of the Group helps further mitigate exposure to changes in power prices.  

3.1.3  Credit risk  

The Group’s exposure to credit risk arises from its receivables from customers. At 31 December 2019 and 31 
December 2018, the Group’s trade and other receivables were classed as due within one year, details of which 
are included in note 21. The Group’s policy is to undertake credit checks where appropriate on new customers 
and to provide for expected credit losses (ECLs) based on estimated irrecoverable amounts determined by 
reference to specific circumstances and past default experience. Credit risk is also in part mitigated by the 
policy to offer direct debit as a preferred method of payment for customers. At the end of the reporting period 
the Directors have provided for specific expected credit losses and believe that there is no further credit risk. 

Credit risk also arises from cash and cash equivalents, and deposits with banks and financial institutions. 
The Directors monitor the credit quality of the institutions used when considering which banks and financial 
institutions funds should be placed with.

The ECL model has been calculated in line with requirements under IFRS 9. The Group’s trade receivables  
have no significant financing component, so the Group has used the simplified method for providing for these 
under IFRS 9. Therefore, the impairment loss is measured at lifetime ECL. Trade debtors have been segmented 
into categories of customer type and age, meaning the debt is split into categories with similar expected 
credit losses. 

An impairment analysis is performed at each reporting date using a provision matrix to measure the expected 
credit losses. The calculation reflects the probability-weighted outcome, the time value of money, and 
reasonable and supportable information that is available at the reporting date about past events, current 
conditions and forecasts of future economic conditions.

Net debt

Total equity

Total capital

Gearing ratio

41,112

18,780

59,892

68.6%

40,899

18,826

59,725

68.5%

During 2019 the Group’s strategy (unchanged from 2017) was to seek debt funding at appropriate margins 
from lenders against long term power generation assets.  These assets have highly predictable revenue 
streams and are considered stable for long-term borrowing.  In future, in order to maintain or adjust its capital 
structure,  the Group may restructure its debt, issue new shares or sell assets.

The Group's borrowings are subject to maintaining covenants as defined by the debt funders. Throughout the 
year ended 31 December 2019 the Group complied with all external borrowing covenants and management 
monitors the continued compliance with these covenants on a monthly or quarterly basis.

3.3 Fair value estimation

The Group measures certain financial instruments at fair value, at each reporting date. Fair value is defined 
as "the price that would be received to sell an asset, or paid to transfer a liability, in an orderly transaction 
between market participants at the measurement date". The fair value measurement assumes that the 
transaction to sell the asset or to transfer the liability takes place either:

• 

• 

in the principal market for the asset or liability; or

in the absence of a principal market, in the most advantageous market available for the asset or liability, 
which must be accessible by the Group.

All financial assets and financial liabilities subject to measurement at fair value and disclosed within these 
financial statements are categorised within the fair value hierarchy, the levels of which are defined as follows:

• 

• 

• 

Level 1 - Quoted prices (unadjusted) in active markets for identical assets or liabilities.

Level 2 - Inputs other than quoted prices included within Level 1 that are observable for the asset or 
liability, either directly (i.e., as prices) or indirectly (i.e., derived from prices).

Level 3 - Inputs for the asset or liability that are not based on observable market data (i.e., unobservable 
inputs).

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Notes to the Financial Statements

Notes to the Financial Statements

3. Financial and Capital Risk Management (continued) 

4. Critical Accounting Judgements and Estimates

3.3 Fair value estimation (continued)

If one or more of the significant inputs is not based on observable market data, the instrument is included 
within Level 3.

As part of our overall financial review, we continue to monitor the fair value of all of our investments through 
both an understanding of the wider environment in addition to the underlying economics of all assets across  
the business. 

The table below presents the Group’s financial assets that are measured at fair value, by valuation method at 
31 December 2019.  

2019

Assets

Fair value through profit or  
loss financial assets

Other interests in associates

Total financial assets

2019

Liabilities

Fair value through profit or  
loss financial liabilities

Contingent consideration

Total financial liabilities

Level 1 

£000’s

Level 2

£000’s

Level 3

£000’s

Total

£000’s

-

-

-

-

615

615

Level 1 

£000’s

Level 2

£000’s

Level 3

£000’s

615

615

Total

£000’s

-

-

-

-

99

99

99

99

During the year, the Group recognised £614,920 of secured convertible loan stock granted to Next Green Cars 
Ltd, as well as contingent consideration of £99,000, as part of its investment in this business.  Both the financial 
asset and financial liability have been defined as Level 3.  Further details of this transaction are disclosed per 
note 19.

The financial assets are valued using the discounted cash flow methodology. This method involves the 
projection of cash flows received from the loan of interest and principal repayment. A discount rate derived 
from the Group's borrowing costs is applied to the cash flow series to establish the present value of the asset. 
Additionally given that this asset contains a convertible option, the Group has compared the discounted 
cash flow derived fair value with the value of the asset if converted to ensure that the valuation presented is 
true and fair. The specific timings and amounts of cash flows from the loan if not converted are contractual. 
Significant increases to the Group's cost of borrowing would result in a lower fair value of this asset.

The financial liabilities are valued based on the expected contractual cash outflow that would become 
payable upon satisfaction of the milestones set out in note 19, and the likelihood of cash outflows made with 
reference to the financial and product outlook of the Group's associate, Next Green Cars Ltd.

Following the initial recognition of the financial instruments above, there were no subsequent changes in, or 
transfers to or from, Level 3 instruments for the year ended 31 December 2019.

In the process of applying the Group’s accounting policies, management has to make judgements and 
estimates that have a significant effect on the amounts recognised in the financial statements. These 
judgements and estimates are evaluated continually and are based on historical experience and other factors, 
including expectations of future events. 

Given the nature of the estimates and judgements made, it is not appropriate to provide sensitivity analyses, 
unless explicitly stated otherwise. Actual results may differ from the initial judgement or estimate, and any 
subsequent changes are accounted for at a time when updated information becomes available.

The most critical of these accounting judgements and estimates are detailed below. 

4.1 Judgements

4.1.1 Judgements over revenue from contracts with customers

The Group applied the following judgements that affect the determination of the amount and timing of 
revenue from contracts with customers: 

(a) 

Identifying performance obligations in contracts

Good Energy’s revenues from contracts with customers include unit charges and standing charges for the 
supply of electricity and gas, operational generation site revenue, and FiT administration fees. Most of these 
performance obligations are easily identifiable and are separable. 

For FiT administration revenue from customers who are new to the FiT scheme, Good Energy is required 
to both register and administer that customer for a year, and there is a higher administration payment 
from OFGEM as a result. Registering a customer to the FiT scheme and administering their account are not 
separable performance obligations, as there is no fee for registering and not administering the customer.  

(b)  

Determining the timing and satisfaction of the services

Revenue for these services is to be recognised over time, because the customer simultaneously receives and 
consumes the benefits provided by the Group.

 (c) 

Principal versus agent considerations

Contracts are entered into with customers to supply electricity and gas, which is a service delivered over time 
(as the customer consumes the electricity or gas), in which the Group is the principal.

FiT administration contracts are entered into with the customer, to supply administration services on behalf of 
OFGEM. The Group acts as an agent for OFGEM, not a principal, because the Group is not entitled to revenue 
from the customers’ FiT sites, only the administration fee.

Payment normally takes place after performance by the Group; NHH customers with 15-day payment terms 
and HH customers with 30-day payment terms. Some customers pay by monthly direct debit and the Group 
aims to recover billed amounts every 3 months.  

4.1.2 Leases: determining if a contract contains a lease 

Under IFRS 16, a contract contains a lease if it conveys the right to control the use of an identified asset for a 
period of time, in exchange for consideration.

The Group assesses whether it has the right to obtain substantially all of the economic benefits from use of the 
identified asset, as well as the right to direct the use of that asset.

The Group also determines the lease term as the non-cancellable term of the lease, together with any periods 
covered by an option to extend the lease if it is reasonably certain to be exercised, or any periods covered by 
an option to terminate the lease if it is reasonably certain not to be exercised.

The majority of the Group’s lease arrangements concern the sites on which its generation assets are located. 
These arrangements require additional consideration in respect of various lease costs associated with the sites, 
being primarily base rent, substation rent and easements/access rights.

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Notes to the Financial Statements

4. Critical Accounting Judgements and Estimates (continued)

4. Critical Accounting Judgements and Estimates (continued)

4.1 Judgements (continued)

4.1.2 Leases: determining if a contract contains a lease (continued)

Access rights in particular refer to land easements or rights to use, access or cross the land of another entity or 
individual, for a specified purpose. The lease arrangements give the Group the right to use the land but do not 
give the Group exclusivity of use or right to control.

In assessing whether these land easements and access rights form part of the relevant leases, management 
have determined the following;

• 

• 

• 

The land easements and access rights are physically distinct identified assets, which enable to Group to 
access the land and wind/solar farms, for the specific purposes of power generation, and maintenance 
of the generation equipment. These land easements and access rights are active for the duration of the 
lease term, meaning that they are deemed specific, not perpetual, in nature.

The Group receives substantially all of the economic benefits from the use of those easements and access 
right, for the specific purposes of power generation and maintenance of the generation equipment.

The leases state that the landlord must not breach the Group's right as a tenant to access the land. The 
Group instructs maintenance, repair and replacement work to be completed on the generation assets by 
third parties, which requires the Group to have the right to direct the use of the identified assets - being 
the land easements and access rights.

4.2 Estimates (continued)

4.2.2 Provision for expected credit losses of trade and intercompany receivables, and contract assets 
(continued)

The assessment of the correlation between historical observed default rates, forecast economic conditions 
and ECLs is a significant estimate. The amount of ECLs is sensitive to changes in circumstances and of 
forecasted economic conditions. The Group’s historical credit loss experience and forecast of economic 
conditions may also not be representative of customers’ actual default in the future. 

The assessments undertaken in recognising provisions have been made in accordance with IFRS 9. A provision 
for impairment of trade receivables is established based on an expected credit loss model. Information about 
the ECLs on the Group’s trade receivables is disclosed in note 21. 

The Parent Company also holds material receivable balances with its subsidiaries, for which the expected 
credit loss model is also used in establishing a provision for impairment, in accordance with IFRS 9. Information 
about the Parent Company loans to Group undertakings can be found per note 18.

4.2.3 Power purchase costs 

Power purchase costs can typically take 14 months from the date of supply to be finalised due to the 
processes that the energy market has to complete in order to finalise generation and consumption data for 
any one particular month. Therefore, there is an element of power purchase costs that needs to be estimated 
based on a combination of in-house and industry data that is available at any particular point in time.

On the basis of the above, management have concluded that these land easements and access rights 
therefore be treated as part of the underlying lease.

4.2.4 Inventories

The Group carries Renewable Obligation Certificates (ROCs) as inventory in its Consolidated Statement of 
Financial Position. These are valued at the lower of cost or estimated realisable value. Gains or losses made 
on ROCs which are subsequently sold, are only recognised in the Statement of Comprehensive Income when 
they crystallise.

The final out-turn value of a ROC is only published by OFGEM in October following the compliance year (April 
to March) which may require a final adjustment to gains or losses on the sale or purchase of ROCs previously 
recognised in the Consolidated Statement of Comprehensive Income.

4.2 Estimates

4.2.1 Estimates over revenue from contracts with customers

Revenue calculated from energy sales includes an industry estimate of the quantity in units of electricity or 
gas supplied to the Group's customers during the 12 months preceding the end of the reporting period. It also 
includes an estimate in the form of the average sales price per unit, and standing charge.

15% of the total revenue figure is estimated, with a fixed transaction price and estimated unit consumption. 

The estimate is made using historical consumption patterns, industry estimated consumption rates, and 
seasonality data available, and takes into consideration industry reconciliation processes, upon which the 
Group takes a prudent position until final reconciliation data is available from the industry 14 months after the 
supply date. 

The Group has identified that the amount of accrued income subject to estimation uncertainty is 
approximately £1.1m.

4.2.2 Provision for expected credit losses of trade and intercompany receivables, and contract assets

The Group uses a provision matrix to calculate expected credit losses (ECLs) for trade receivables. The 
provision rates are based on days past due for groupings of various customer segments that have similar loss 
patterns (e.g. by customer type, payment type). 

The provision matrix is initially based on the Group’s historic observed default rates, calibrated to adjust the 
historic credit loss experience with forward-looking information. For instance, if forecast economic conditions 
are expected to deteriorate over the next year which can lead to an increased number of defaults, the 
historical default rates are adjusted. At every reporting date, the historical observed default rates are updated 
and changes in the forward-looking estimates are analysed. 

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Notes to the Financial Statements 

5. Discontinued Operations

6. Segmental Analysis

The Group has Generation Development activities which are discontinued, and efforts have been made 
during the year to realise value from this portfolio, in part through sales to external parties who will continue 
to develop the sites. The results of this segment are shown in the segmental analysis of the Consolidated 
Statement of Comprehensive Income, per note 6.

The major classes of assets of the Generation Development segment which were classified as disposal groups 
held for sale as at 31 December 2018 (as per note 23) were either sold during the year, or were written down 
to £nil, as described below.

On 3 May 2019, a subsidiary of the Group - Good Energy Brynwhilach Solar Park Limited - was sold, following 
the successful completion of the sale agreement. The sale realised a net gain of £362,934. The Group 
recognised an impairment loss on a residential property, prior to that property being sold during the year. The 
impairment recognised prior to sale amounted to £199,982 with the sale itself realising a net loss of £48,000.

During the year, the Group recognised impairment losses in respect of a wind development project and the 
Mapperton transformer, of £1,293,733 and £299.875 respectively, thereby fully writing both of these assets 
down to £nil.  Please refer to note 23 for additional information.

There is a £32,008 tax charge (2018: £56,013 tax charge) related to the discontinued operations for the year.

The net cash flows of the discontinued operations in the year are as follows:

2019

£000’s

(859)

343

233

(283)

2019

£000’s

(5.9p)

(5.7p)

2018

£000’s

(397)

151

607

361

2018

£000’s

(4.6p)

(4.6p)

Operating

Investing

Financing

Net cash inflow

Loss per share: discontinued operations

Basic

Diluted

130

The chief operating decision-maker has been identified as the Board of Directors (the ‘Board’). The Board 
reviews the Group’s internal reporting in order to assess performance and allocate resources. Management 
has determined the operating segments based on these reports. The Board considers the business from  
a business class perspective, with each of the main trading subsidiaries accounting for each of the  
business classes. 

The main segments are:-

• 

• 

Supply Companies (including electricity supply, FiT administration and gas supply),

Electricity Generation companies (including wind and solar generation companies),

•  Generation Development (29 early stage development companies),

• 

Holding companies, being the activity of Good Energy Group PLC.

No operating segments have been aggregated to form the above reportable operating segments.

The Board assesses the performance of the operating segments based primarily on summary financial 
information, extracts of which are reproduced below. An analysis of profit and loss, assets and liabilities and 
additions to non-current asset, by class of business, with a reconciliation of segmental analysis to reported 
results follows.

Transfer prices between operating segments are on an arm’s length basis in a manner similar to transactions 
with third parties.

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Notes to the Financial Statements

Notes to the Financial Statements

6. Segmental Analysis (continued)

6. Segmental Analysis (continued)

Year ended 
31 December 
2019

Electricity 
Supply

FIT 
Admin-
istration

Gas 
Supply

Total supply 
companies

Electricity 
Generation

Holding 
companies/
consolidation 
adjustments

Total - 
continuing 
operations

Generation 
Development 
(discontinued)

Total 

Year ended 
31 December 
2018

Electricity 
Supply

FIT 
Admin-
istration

Gas 
Supply

Total  supply 
companies 

Electricity 
Generation 

Holidng 
companies/
consolidation 
adjustments

Total - 
continuing 
operations

Generation 
Development  
(discontinued)

Total  

£000’s

£000’s

£000’s

£000’s

£000’s

£000’s

£000’s

£000’s

£000’s

£000’s

£000’s

£000’s

£000’s

£000’s

£000’s

£000’s

£000’s

£000’s

Total revenue

 89,981 

 5,247 

 26,335 

 121,563 

 8,779 

 (6,084)

 124,258 

 91 

124,349

Expenditure

Expenditure

Cost of sales

(60,190)

(873) (18,575)

(79,638)

(3,828)

-

(83,466)

(72)

(83,538)

Revenue

Revenue from 
contracts 
with 
customers

FiT/ROC 
subsidy 
revenue

Inter-segment 
revenue

 89,981 

 5,247 

 26,335 

 121,563 

 1,697 

 -   

 123,260 

 91 

-

-

-

-

-

-

-

-

 998 

-

 998 

 6,084 

 (6,084)

-

-

-

123,351 

 998 

-

Cost of sales

(69,382)

(462) (18,835)

(88,679)

(3,922)

-

(92,601)

(1,246)

(93,847)

Inter-segment 
cost of sales

(6,084)

-

-

(6,084)

-

6,084

-

-

-

Gross profit

 14,515 

 4,785 

 7,500 

 26,800

 4,857

 -   

 31,657 

 (1,155)

 30,502 

 (21,589)

 (426)

 (2,780)

 (24,795)

 225 

 (24,570)

 (1,091)

 -   

 (198)

 (1,289)

 -   

 (1,289)

 4,120

 4,431

 (2,978)

 5,573 

 (930)

 4,643 

 27 

 (3,377)

 (923)

 (4,273)

 -

 (4,273)

 -   

 -   

 (42)

 (42)

 -   

 (42)

 4,147 

 1,054 

 (3,943)

 1,258 

 (930)

 328 

 54,410 

 63,633 

 (2,184)

 115,859 

 505 

116,364 

 43,981

 65,176 

 (23,808)

 85,349 

 12,235 

 97,584 

 10,429 

 (1,543)

 21,624 

 30,510 

 (11,730)

 18,780 

 2,923 

 5,090 

 1,041 

 9,054 

 -   

 9,054 

Administrative 
expenses

Depreciation 
& amortisation

Operating 
profit/(loss)

Net finance 
income/
(costs) 

Share of Loss 
of Associate

Profit/(loss) 
before tax

Segments assets & liabilities

Segment 
assets

Segment 
liabilities

Net assets/
(liabilities)

Additions to 
non- current 
assets

132

Revenue

Revenue from 
contracts 
with
customers

FiT/ROC 
subsidy 
revenue

Inter-segment
revenue

Inter-segment 
cost of sales

Gross Profit/
(loss)

Administrative 
expenses

Tidal lagoon 
write-off

Depreciation 
& amortisation

Operating 
profit/(loss)

Net finance
income/
(costs)

Profit/(loss) 
before tax

Segments assets & liabilities

Segment 
assets

Segment 
liabilities

Net assets/
(liabilities)

Additions to
non- current 
assets

80,121

4,856

27,998

112,975

195

-

-

-

-

-

-

-

-

3,745

4,369

(4,369)

-

Total Revenue

80,121

4,856

27,998

112,975

8,309

(4,369)

116,915

-

-

113,170

3,745

9

-

-

9

113,179

3,745

-

116,924

(4,369)

-

-

(4,369)

-

4,369

-

-

-

15,562

3,983

9,423

28,968

4,481

-

33,449

(63)

33,386

(22,172)

(315)

(3,087)

(25,574)

(124)

(25,698)

-

(1,081)

-

-

500

500

(500)

-

(645)

(1,726)

-

(1,726)

5,715

4,166

(3,232)

6,649

(687)

5,962

12

(3,574)

(783)

(4,345)

-

(4,345)

5,727

592

(4,015)

2,304

(687)

1,617

63,898

99,253

(52,095)

111,056

7,734

118,790

51,116

104,897

(73,546)

82,467

17,497

99,964

12,782

(5,644)

21,451

28,589

(9,763)

18,826

1,577

34

6

1,617

(4)

1,613

All turnover arose within the United Kingdom. 

Consolidation adjustments relate to inter-company sales of generated electricity and the elimination of  
inter-company balances.

133

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Notes to the Financial Statements

Notes to the Financial Statements

7. Operating Profit and Administrative Expenses

7. Operating Profit and Administrative Expenses (continued)

Note

15

17

16

2019

£000’s

2,700

171

1,154

-

100

99

28

227

-

-

2018

£000’s

2,948

858

-

880

60

96

48

204

-

-

14,034

13,622

3,050

1,019

2,974

3,674

-

1,285

139

-

(316)

25,859

25,219

865

(225)

25,859

3,869

2,006

3,268

3,576

(1,027)

1,232

378

500

-

27,424

26,800

-

624

27,424

The operating profit is stated after charging:

Depreciation of property, plant and equipment

Amortisation of intangible assets

Depreciation of right of use assets

Lease rentals

Auditors’ remuneration

Audit of parent and consolidated financial statements

Audit of subsidiaries

Fees in relation to overruns of prior year audit

Subtotal (audit)

Other services 

Subtotal (non-audit)

The administrative expenses comprise the following:

Staff costs

Rent and office costs

Marketing costs

Professional fees and bank charges

Expected credit loss provision

Write back of unclaimed overpayments

Depreciation and amortisation

WIP writedown

Write down of investment in Tidal Lagoon

(Gain)/loss on disposals

Total

Split between:

Continuing administrative expenses

Non-underlying costs

Discontinued 

Total

134

Non-underlying costs in the year relate to our investment in a new customer services technology platform with 
Kraken Technologies Ltd. These costs comprise of a restructuring provision of £351,401 as part of our operating 
model transformation and the costs of the Kraken system implementation of £513,690. Capitalised expenditure 
on the Kraken system implementation in the year totalled £663,596; these are additions to intangible assets as 
assets under the course of development.

8. Parent Company Statement of Comprehensive Income

As permitted by Section 408 of the Companies Act 2006, the Statement of Comprehensive Income of the 
Parent Company is not presented as part of these financial statements. The Parent Company profit or loss for 
the year (after taxation) is disclosed at the foot of the Parent Company Statement of Financial Position.

9. Staff Costs

Staff costs, including Directors’ remuneration, were as follows:

Wages and salaries

Social security costs

Share based payments

Other pension costs

Total staff costs 

Capitalised staff costs

Total expensed staff costs

2019

£000’s

11,666

1,159

81

529

13,435

(356)

13,079

2018

£000’s

9,520

1,019

358

459

11,356

(202)

11,154

Details of share based payments can be found in note 32.

The average monthly number of employees, including the Directors, during the year was as follows:

Operations

Business services

Total management and administration

2019

Number

121

185

306

The total numbers of employees, including the Directors, at the year end were as follows:

Operations

Business services

Total management and administration

2019

Number

107

177

284

2018

Number

110

186

296

2018

Number

119

184

303

135

Strategic ReportGovernance ReportFinancial StatementsGood Energy Annual Report 2019Financial statements 
Notes to the Financial Statements

Notes to the Financial Statements

10. Directors' and Key Management Remuneration

12. Finance Costs

Directors’ and Key Management emoluments

Short term employee benefits

Post employment benefits

Share based payments

Total

2019

£000’s

1,304

96

81

1,481

2018

£000’s

1,373

107

358

1,838

Key Management are considered to be the Directors of Good Energy Group PLC and the executive team. The 
emoluments relating to these teams are included in the table above.

During the year retirement benefits were accruing to 2 Directors of the Group (2018: 3) in respect of money 
purchase pension schemes.

On bank loans and overdrafts

On corporate bond

Other interest payable

Interest on lease liabilities

Amortisation of debt issue costs

Total

In respect of the highest paid Director, the Group paid remuneration of £339,186 (2018: £323,336), including 
contributions to money purchase pension schemes of £27,580 (2018: £27,170).

13. Taxation

Individual remuneration for the Directors is set by the Remuneration Committee of the Board which consists 
entirely of Non-Executive Directors. Appropriate Keyman Insurance policies are in place.

During the year, 90,000 share options were exercised by current or former Directors and Key Management 
(2018: 100,350). The aggregate amount of gains made by current Directors or Key Management on the 
exercise of share options was £4,875 (2018: £121,476).

Details of the Directors’ remuneration as required by AIM rule 19 are given in the table in the Directors’ 
remuneration report on page 75 and are included in this note by cross reference.

11. Finance Income

Bank and other interest receivables

Fair value gains 

Total finance income

2019

£000’s

80

86

166

2018

£000’s

16

-

16

Analysis of tax charge for the year

Current tax

Current tax 

Adjustments in respect of prior years

Total current tax (see below)

Deferred tax

Origination and reversal of temporary differences

Adjustments in respect of prior years

Total deferred tax (see note 25)

Tax on profit on ordinary activities

2019

£000’s

2,956

908

8

374

193

4,439

2019

£000’s

10

18

28

93

(47)

46

74

2018

£000’s

3,051

1,092

26

-

192

4,361

2018

£000’s

-

-

-

505

211

716

716

Adjustments in respect of prior year deferred tax amounts are from differences relating to capital allowances 
claimed.

Income tax expense reported in the statement of 
profit and loss - continuing operations

Income tax attributable to discontinued operations

Total tax charge for the year

2019

£000’s

42

32

74

2018

£000’s

660

56

716

137

136

Strategic ReportGovernance ReportFinancial StatementsGood Energy Annual Report 2019Financial statements 
Notes to the Financial Statements

Notes to the Financial Statements

13. Taxation (continued) 

Factors affecting the tax charge for the year

The tax assessed for the year is higher (2018: higher) than the standard rate of corporation tax in the UK of 
19.00% (2018: 19.00%). The differences are explained as follows:

Accounting profit before tax from continuing 
operations

Loss before tax from discontinued operations

Accounting profit before income tax

Profit before tax multiplied by the standard rate of 
corporation tax in the UK of 19.00% (2018: 19.00%)

Tax effects of:

Expenses not deductible for tax purposes

Share of loss in associate

Non-taxable gain on sale of investment

Effects of changes in tax rate

Restricted interest costs deduction

Share-based payment adjustment

Prior year adjustments

Deferred tax on losses not recognised

Recognition of deferred tax on losses previously 
unrecognised

Deferred tax on interest costs recognised

Total tax charge for the year

Factors that may affect future tax charges

2019

£000’s

1,258

(930)

328

62

323

8

(79)

(15)

-

(148)

(29)

-

(48)

-

74

2018

£000’s

2,304

(687)

1,617

307

235

-

-

(46)

(85)

-

211

132

-

(38)

716

13. Taxation (continued) 

Corporation tax payable/(recoverable) as per Consolidated Statement of Financial Position 

Parent Company

Consolidated

2019

2018

2019

2018

£000’s

£000’s

£000’s

£000’s

UK Corporation Tax on profits for the year

-

-

10

-

14. Earnings/(Loss) per Share

Basic

Basic earnings/(loss) per share is calculated by dividing the profit/(loss) attributable to owners of the 
Company by the weighted average number of ordinary shares during the year after excluding 293,270 
(2018: 403,270) shares held by Clarke Willmott Trust Corporation Limited in trust for the Good Energy Group 
Employee Benefit Trust.

Profit/(loss) attributable to owners of the Company 
(£000’s)

Basic weighted average number of ordinary shares 
(000’s)

Basic earnings/(loss) per share

Continuing operations

Profit/(loss) attributable to owners of the Company 
(£000’s)

Basic weighted average number of ordinary shares 
(000’s)

Basic earnings/(loss) per share

Consolidated

Consolidated

2019

254

16,294

1.6p

2019

1,216

16,294

7.5p

2018

901

16,109

5.6p

2018

1,644

16,109

10.2p

Changes to the UK corporation tax rates were substantively enacted as part of the Finance Act 2016 (on 15 
September 2016), which included a reduction to the main rate of corporation tax to 17% from 1 April 2020.

Diluted

As the changes have been substantively enacted at the reporting date, their effects are included within these 
financial statements. Accordingly, deferred tax balances have been calculated using a rate of 17%.

The Chancellor's Spring Budget on 11 March 2020 announced that the UK corporation tax rate is to remain 
at 19% effective from 1 April 2020. This was enacted on 11 March 2020. The deferred tax balances have not 
been updated to reflect this and the overall impact of this rate change on the closing deferred tax liability 
would be an increase of £106,000.

Diluted earnings per share is calculated by adjusting the weighted average number of ordinary shares to 
assume conversion of all potentially dilutive ordinary shares.  Potentially dilutive ordinary shares arise from 
awards made under the Group’s share-based incentive plans. Where the vesting of these awards is contingent 
on satisfying a service or performance condition, the number of potentially dilutive ordinary shares is 
calculated based on the status of the condition at the end of the period. Potentially dilutive ordinary shares 
are actually dilutive only when the average market price of the Company’s ordinary shares during the period 
exceeds their exercise price (options) or issue price (other awards).  

138

139

Strategic ReportGovernance ReportFinancial StatementsGood Energy Annual Report 2019Financial statements 
Notes to the Financial Statements

Notes to the Financial Statements

14. Earnings/(Loss) per Share (continued)

15. Property, Plant and Equipment

The greater any such excess, the greater the dilutive effect. The average market price of the Company’s 
ordinary shares during the year was 138p (2018: 126p). The dilutive effect of share-based incentives was 
513,596 (2018: 289,262). The dilutive effect of share-based incentives for continuing operations was 513,596 
shares (2018: 289,262 shares).

Consolidated
Year ended 31 December 2019

Leasehold 
improvements

Furniture,
fittings & 
equipment

Generation 
assets

Total

£000’s

£000’s

£000’s

£000’s

Profit/(loss) attributable to owners of the  
Company (£000’s)

Weighted average number of diluted ordinary 
shares (000’s)

Diluted earnings/(loss) per share

Continuing operations

Profit/(loss) attributable to owners of the Company 
(£000’s)

Weighted average number of diluted ordinary 
shares (000’s)

Diluted earnings/(loss) per share

Consolidated

Consolidated

2019

254

16,807

1.5p

2019

1,216

16,807

7.2p

2018

901

16,399

5.5p

2018

1,664

16,807

10.0p

Cost

At 1 January 2019

Reclasses to right-of-use assets under IFRS 16

Additions

Disposals

677

-

-

-

1,800

(545)

62

-

62,081

64,558

(1,250)

(1,795)

50

(160)

112

(160)

At 31 December 2019

677

1,317

60,721

62,715

Accumulated depreciation

At 1 January 2019

(479)

(1,406)

(12,322)

(14,207)

Reclasses to right-of-use assets under IFRS 16

Charge for the year

Disposals

-

(64)

-

304

(154)

-

50

354

(2,482)

(2,700)

164

164

At 31 December 2019

(543)

(1,256)

(14,590)

(16,389)

Net book value

At 1 January 2019

At 31 December 2019

198

134

394

61

49,759

46,131

50,351

46,326

140

141

Strategic ReportGovernance ReportFinancial StatementsGood Energy Annual Report 2019Financial statementsNotes to the Financial Statements

Notes to the Financial Statements

15. Property, Plant and Equipment (continued) 

16. Right of Use Assets and Leases

Consolidated
Year ended 31 December 2018

Leasehold 
improvements

Furniture, 
fittings & 
equipment

Generation 
assets

Total

£000’s

£000’s

£000’s

£000’s

Cost

At 1 January 2018

Assets held for sale

Additions

Disposals

At 31 December 2018

Accumulated depreciation

At 1 January 2018

Assets held for sale

Charge for the year

Disposals

532

-

145

-

677

1,649

62,051

64,232

-

151

-

(4)

34

-

(4)

330

-

1,800

62,081

64,558

(394)

(1,126)

(9,739)

(11,259)

-

(85)

-

-

-

-

(280)

(2,583)

(2,948)

-

-

-

At 31 December 2018

(479)

(1,406)

(12,322)

(14,207)

Net book value

At 1 January 2018

At 31 December 2018

138

198

523

394

52,312

49,759

52,973

50,351

The generation assets relate to electricity generating assets (wind turbines, solar panels and ancillaries).  
These assets are held within the Company’s subsidiaries: Good Energy Delabole Wind Farm Limited; Good 
Energy Hampole Wind Farm Limited; Good Energy Woolbridge Solar Park Limited; Good Energy Creathorne 
Solar Park Limited, Good Energy Rook Wood Solar Park Limited, Good Energy Carloggas Solar Park Limited, 
Good Energy Lower End Solar Park Limited and Good Energy Cross Roads Solar Park Limited.

These assets have been pledged as security against bank and other loan liabilities.  

Assets reclassified to assets held for sale are disclosed in note 23. 

The tangible assets disclosed above do not include right-of-use assets held under finance leases, as a result 
of the implementation of IFRS 16 Leases from 1 January 2019. Details of the right-of-use assets and their 
associated lease liabilities are disclosed in note 16.

142

The Group has lease contracts for the access to, and use of, land on which its generation assets are located, 
office buildings, other equipment and software licences.

Leases of land (inclusive of access rights) typically have lease terms of between 20 and 30 years, office 
buildings of between 4 to 6 years, whilst other equipment and software licences have lease terms of between 
3 and 10 years. The Group's obligations under its leases are secured by the lessor's title to the leased assets.

The Group also has certain leases of printers, laptops, and coffee and water machines, with low value 
underlying assets. The Group has applied the recognition exemption in respect of these leases.

Each lease generally imposes a restriction from subleasing the underlying assets to another party, therefore 
the right-of-use assets can only be used by the Group.

The lease payments within all of the Group's lease agreements (with the exception of short-term leases, leases 
of low value underlying assets, and those leases containing a variable lease payment component) are linked to 
annual charges in the Retail Price Index.

The Group has several leases subject to variable lease payments which do not depend on an index or 
rate. These relate to the Group's generation assets, where the lease payments are based on the actual 
performance of the asset (which in turn is dependent upon the weather). These payments are not, in 
substance, fixed, and therefore are excluded from the initial measurement of the lease liability and  
right-of-use asset.

The Group classifies its right-of-use assets in a manner consistent with that of its property, plant and 
equipment.  The carrying values of the right-of-use assets, together with the depreciation charge split by  
class of underlying asset, are shown below:

Consolidated
Year ended 31 December 2019

Land, land 
easements and 
buildings

Furniture, fittings 
and equipment

Generation 
assets

Total

£000s

£000s

£000’s

£000’s

Cost

At 1 January 2019

Adjustments on transition to 
IFRS 16

At 31 December 2019

Accumulated depreciation

At 1 January 2019

Adjustments on transition to 
IFRS 16

Charge for the year

At 31 December 2019

Net book value

At 1 January 2019

At 31 December 2019

-

5,684

5,684

-

-

(590)

(590)

-

5,094

-

1,393

1,393

-

(640)

(514)

(1,154)

-

239

-

1,250

1,250

-

(50)

(50)

(100)

-

1,150

-

8,327

8,327

-

(690)

(1,154)

(1,844)

-

6,483

143

Strategic ReportGovernance ReportFinancial StatementsGood Energy Annual Report 2019Financial statements 
Notes to the Financial Statements

Notes to the Financial Statements

16. Right of Use Assets and Leases (continued)

16. Right of Use Assets and Leases (continued)

Set out below are the carrying amounts of lease liabilities (included within borrowings) and the movements 
during the period: 

At 1 January 2019

Additions

Accretion of interest

Payments

At 31 December 2019

Current (see note 26)

Non-current (see note 26)

Total

The maturity analysis of lease liabilities is disclosed in note 26.

The following are the amounts recognised in the Statement of Comprehensive Income:

Depreciation of right-of-use assets (included within cost-of-sales 
and administration expenses)

Interest expense on lease liabilities

Expense relating to leases of low-value assets (included within 
administration expenses)

Variable lease payments (included within administration expenses)

Total amount recognised in the Statement of Comprehensive Income

During the year, the Group had the following:

• 

Total cash outflows for leases of £908,094;

•  No additions to right-of-use assets or liabilities;

£000s

126

5,684

373

(799)

5,384

711

4,673

5,384

£000s

1,154

385

54

55

1,648

•  No transactions giving rise to gains or losses arising from sale and leaseback transactions;

•  No amounts relating to short-term leases.

The Group has lease contracts for the land on which its generation assets sit. Included within these lease 
arrangements are variable lease payments, which are based on the actual performance of each site (which 
itself is dependent upon the weather).

Each lease arrangement contains a base rent payment, reflective of the minimum rental payments within the 
contract. This rental obligation is guaranteed to the landlord. Additional rental payments included are based on 
the revenue generated by each site.

If a site performs particularly well, the landlord will receive a top-up payment - known as 'revenue rent' - 
which is calculated at a percentage of the revenue generated and is considered a variable lease payment. 
These amounts are not considered to be material.

The Group also has lease contracts concerning office buildings which include extension and termination 
options. 

Materially, for all leases, management do not expect to exercise any options to extend the lease term and 
expect to not exercise any options to terminate the lease.

At the Statement of Financial Position date, the Group had no lease commitments in respect of leases 
committed to, but not yet commenced. The Group has not yet entered into any lease agreements in respect 
of the construction of new premises.

17. Intangible Assets

Consolidated
Year ended 31 December 
2019

Power 
supply 
licence

Software 
licences

Website 
development 
costs

Goodwill

Assets under 
the course of 
development

Total

£000’s

£000’s

£000’s

£000’s

£000’s

£000’s

Cost

At 1 January 2019

180

5,604

149

1,446

1,110

8,489

Reclasses to right-of-use 
assets under IFRS 16

Additions

Impairment

-

-

-

(847)

1,711

-

-

-

-

-

-

-

At 31 December 2019

180

6,468

149

1,446

Accumulated 
amortisation

At 1 January 2019

Reclasses to right-of-use 
assets under IFRS 16

Charge for the year

At 31 December 2019

-

-

-

-

(4,903)

336

(73)

(4,640)

Net book value

At 1 January 2019

At 31 December 2019

180

180

701

1,828

-

-

(98)

(98)

149

51

-

-

-

-

-

123

(284)

949

-

-

-

-

(847)

1,834

(284)

9,192

(4,903)

336

(171)

(4,738)

1,446

1,446

1,110

949

3,586

4,454

144

145

Strategic ReportGovernance ReportFinancial StatementsGood Energy Annual Report 2019Financial statementsNotes to the Financial Statements

Notes to the Financial Statements

17. Intangible Assets (continued)

17. Intangible Assets (continued)

Consolidated
Year ended 31 December 
2018

Power 
supply 
licence

Software 
licences

Website 
development 
costs

Goodwill

Assets under 
the course of 
development

Total

£000’s

£000’s

£000’s

£000’s

£000’s

£000’s

Cost

At 1 January 2018

180

Additions

Disposals

Impairment

-

-

-

5,460

144

-

-

At 31 December 2018

180

5,604

152

6

(9)

-

149

Accumulated amortisation

At 1 January 2018

Charge for the year

Disposals

At 31 December 2018

-

-

-

-

(4,036)

(9)

(867)

-

(4,903)

-

9

-

1,446

-

-

-

1,446

-

-

-

-

351

1,137

-

(378)

1,110

-

-

-

-

7,589

1,287

(9)

(378)

8,489

(4,045)

(867)

9

(4,903)

Net book value

At 1 January 2018

At 31 December 2018

180

180

1,424

701

143

149

1,446

1,446

351

1,110

3,544

3,586

Assets under the course of development relate largely to the implementation of a new domestic customer 
billing system (Kraken). All amortisation amounts are included within administration expenses.

Goodwill of £1,446,453 (2018: £1,446,453) comprises: £1,060,996 (2018: £1,060,996) arising from the original 
acquisition of Good Energy Limited, and £385,457 (2018: £385,457) from the original acquisition of the wind 
farm at Delabole. 

The carrying values of indefinite life assets included in intangible assets are: goodwill of £1,446,453  
(2018: £1,446,453), and a power supply licence of £180,000 (2018: £180,000) which relates to the subsidiary, 
Good Energy Limited. In arriving at the conclusion that these assets have an indefinite life, management have 
observed that the power supply licence is awarded until any breach of conditions stipulated by OFGEM. The 
treatment of goodwill is aligned with relevant accounting standards. An impairment review is undertaken 
annually or more frequently. 

The result of this review was that no impairment is required in respect of the carrying values of the indefinite 
life assets. The key assumptions for value in use are as follows:

Value in use assumptions

Gross margin*

Growth rate beyond five year plan

Pre-tax discount rate

2019

20%-30%

3%

8%

2018

20%-30%

3%

8%

*Annual margins have been modelled in the five year cashflow at varying levels.

Sensitivity analysis has been performed on the impairment review. It has been noted that an increase in the 
discount rate by 100% would not result in an impairment of the goodwill. Management believe any increase in 
discount rates above 10% to be remote and therefore the Directors believe there to be significant headroom.

18. Investments and Subsidiaries

Parent Company
Year ended 31 December 2019

Shares in Group
undertakings

Loans to Group 
undertakings

£000’s

£000’s

Cost and net book value

At 1 January 2019

Additions

Provisions

Repayments

4,646

-

-

-

At 31 December 2019

4,646

30,602

14,882

(2,102)

(18,868)

24,514

Total

£000’s

35,248

14,882

(2,102)

(18,868)

29,160

Parent Company 
Year ended 31 December 2018

Shares in Group 
undertakings

Loans to Group 
undertakings 

Total

£000’s

£000’s

£000’s

Cost and net book value

At 1 January 2018

Additions

Provisions

Repayments

4,646

-

-

-

At 31 December 2018

4,646

37,048

3,082

(500)

(9,028)

30,602

41,694

3,082

(500)

(9,028)

35,248

Loans to Group undertakings are repayable by 31 December 2035. Interest rates charged on these loans 
range from 0.00% to 8.85%.

146

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Notes to the Financial Statements

Notes to the Financial Statements

18. Investments and Subsidiaries (continued) 

18. Investments and Subsidiaries (continued) 

The Group had the following subsidiaries at 31 December 2019 (all of which have the same registered address 
as Good Energy Group PLC, which can be found within the Directors and Corporate Resources section on the 
final page of this report):

Country of 
incorporation and 
place of business

Proportion of ordinary 
shares directly held by 
Parent Company

UK

UK

UK

UK

UK

UK

UK

UK

UK

UK

UK

UK

UK

UK

UK

100%

100%

100%

100%

100%

100%

100%

100%

100%

100%

100%

100%

100%

85%

100%

Nature of business

Supply of renewably 
sourced electricity and FIT 
administration

Supply of gas

An investor in potential new 
generation sites

Holding company for a 
generating asset sub group

Holding company 
for generating assets 
subsidiaries

Generation of electric 
power by wind turbine 
machinery

Generation of electric 
power by solar panels

Generation of electric 
power by solar panels

Generation of electric 
power by solar panels

Generation of electric 
power by solar panels

Generation of electric 
power by solar panels

Generation of electric 
power by solar panels

Generation of electric 
power by wind turbine 
machinery

Development of an energy 
generating asset

Development of an energy 
generating asset

Name

Good Energy Limited

Good Energy Gas Limited

Good Energy Generation 
Limited

Good Energy Generation 
Holding Company No.1 
Limited

Good Energy Generation 
Assets No.1 Limited*

Good Energy Hampole 
Windfarm Limited*

Good Energy Woolbridge 
Solar Park (010) Limited*

Good Energy Creathorne 
Farm Solar Park (003) 
Limited*

Good Energy Rook Wood 
Solar Park (057) Limited*

Good Energy Carloggas 
Solar Park (009) Limited*

Good Energy Lower End 
Farm Solar Park (026) 
Limited*

Good Energy Cross Road 
Plantation Solar Park (028) 
Limited*

Good Energy Delabole 
Windfarm Limited

Good Energy Cedar 
Windfarm Limited*

Good Energy Lanyon Solar 
Park (011) Limited

148

Good Energy Mapperton 
Solar Park (007) Limited

Good Energy Tidal Limited

Good Energy Development 
(No.1) Limited

Good Energy Development 
(No.3) Limited

Good Energy Development 
(No.4) Limited

Good Energy Development 
(No.5) Limited 

Good Energy Development 
(No.6) Limited

Good Energy Development 
(No.7) Limited

Good Energy Development 
(No.8) Limited

Good Energy Development 
(No.9) Limited

Good Energy Development 
(No.10) Limited

Good Energy Development 
(No.12) Limited

Good Energy Development 
(No.14) Limited

Good Energy Development 
(No.15) Limited

Good Energy Development 
(No.16) Limited

Good Energy Development 
(No.17) Limited

Llangyfelach Community 
Solar Farm C.I.C

Worminster Down Somerset 
Community Solar Farm C.I.C

Good Energy Development 
(No.20) Limited

Good Energy Development 
(No.21) Limited

Good Energy Development 
(No.22) Limited

UK

UK

UK

UK

UK

UK

UK

UK

UK

UK

UK

UK

UK

UK

UK

UK

UK

UK

UK

UK

UK

100%

100%

100%

100%

100%

100%

100%

100%

100%

100%

100%

100%

100%

100%

100%

100%

100%

100%

100%

100%

100%

Development of an energy 
generating asset

Investment holding 
company

Development of an energy 
generating asset

Development of an energy 
generating asset

Development of an energy 
generating asset

Development of an energy 
generating asset

Development of an energy 
generating asset

Development of an energy 
generating asset

Development of an energy 
generating asset

Development of an energy 
generating asset

Development of an energy 
generating asset

Development of an energy 
generating asset

Development of an energy 
generating asset

Development of an energy 
generating asset

Development of an energy 
generating asset

Development of an energy 
generating asset

Development of an energy 
generating asset

Development of an energy 
generating asset

Development of an energy 
generating asset

Development of an energy 
generating asset

Development of an energy 
generating asset

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Notes to the Financial Statements

18. Investments and Subsidiaries (continued) 

19. Interests in Equity Associates

Good Energy Development 
(No.24) Limited

Good Energy Development 
(No.25) Limited

Good Energy Development 
(No.26) Limited

Good Energy Development 
(No.27) Limited

Good Energy Development 
(No.28) Limited

Good Energy Development 
(No.29) Limited

Good Energy Development 
(No.30) Limited

Homegrown Energy Ltd

UK

UK

UK

UK

UK

UK

UK

UK

100%

100%

100%

100%

100%

100%

100%

100%

Development of an energy 
generating asset

Development of an energy 
generating asset

Development of an energy 
generating asset

Development of an energy 
generating asset

Development of an energy 
generating asset

Development of an energy 
generating asset

Development of an energy 
generating asset

Dormant 

*Entities indirectly owned by Good Energy Group PLC. 

The subsidiaries above have all been included in the consolidated financial statements. A subsidiary of the 
Group - Good Energy Brynwhilach Solar Park Limited - was sold during the year.  Further details around this 
are disclosed per note 5. 

Impairment

The Group performed an impairment test in December 2019. The Group considers the relationship between 
its market capitalisation and its book value, as well as forward looking estimates of cash flows, when reviewing 
for indicators of impairment. As at 31 December 2019, the market capitalisation of the Group was significantly 
higher than the book value of its equity. Management concluded from these reviews that no indicators of 
impairment existed.

The recoverable amount of the intercompany loan receivable balance in the Parent Company has been 
determined based on an assessment of forward looking estimates of cash flows and a probability of default. 
The projected cash flows have been adjusted to allow for normalised business (i.e. no new business activity 
costs or revenue are included), and are considering a prudent case. The pre-tax discount rate applied to cash 
flow projections is 8.0%, and cash flows beyond the three-year period are extrapolated using a 3.0% growth 
rate. It was concluded that the future cash flows do exceed the value of the intercompany loan receivable, 
and therefore no expected credit loss provision is required. 

Key assumptions used in impairment calculations and sensitivity to changes in assumptions

The calculation of value in use is most sensitive to the following assumptions:

•  Discount rate

•  Growth rates used to extrapolate cash flows beyond the forecast period

Discount rate – the discount rate represents the current market assessment of the risks specific to the Group, 
taking into consideration the time value of money. The discount rate is derived from the Group’s weighted 
average cost of capital (WACC). The WACC takes into account both debt and equity. A rise in the pre-tax 
discount rate to 11.65% would result in impairment. 

Growth rate estimates – rates are based on management’s prudent estimates of expected growth. A decrease 
in the growth rate estimate to 0% would still leave significant headroom, and would not trigger an indication  
of impairment.

In the year, the Group acquired a 12.9% interest in Next Green Cars Ltd ("NGCL"), which develops Zap-Map, 
the UK's leading charging point platform allowing electric vehicle (EV) drivers to plan routes, identify charge 
points, checking their availability and share power. It also develops the nextgreencar platform, the UK's 
number one green car website. 

NGCL is a private entity, incorporated and operating in the UK, that is not listed on any public exchange.

19.1 Summary of interests in equity associates

Notes

18.2

18.3

18.4

18.4

2019

£000's

2018

£000’s

426

615

39

60

-

-

-

-

Non-current assets

Equity investment in associate

Other interests in associates

Non-current Liabilities

LT Financial Liabilities

Current Liabilities

ST Financial Liabilities

19.2 Investment in associate

As part of the investment in NGCL, the Group appointed a Director to the board. This grants 33% of the board’s 
voting rights and constitutes significant influence to direct the relevant activities of NGCL. As such, NGCL is 
accounted for as an associate using the equity method in the consolidated financial statements.

Current assets

Non current assets

Current liabilities

Non current liabilities

Equity

Group's share in equity - 

Goodwill

Group's carrying amount of the investment

2019

£000's

338

91

(153)

(600)

(324)

(42)

468

426

2018

£000’s

53

60

(110)

-

3

-

-

-

150

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Notes to the Financial Statements

19. Interests in Equity Associates (continued)

19. Interests in Equity Associates (continued)

Revenue from contracts with customers

Loss for the year

Total comprehensive loss

Group's share of loss for the year

2019

£000's

347

(328)

(328)

(42)

2018

£000’s

208

(57)

(57)

-

The associate had no contingent liabilities or capitial commitments as at 31 December 2019 or as at 31 
December 2018. No dividends were paid by the associate in the period.

19.3 Other interests in associate

19.4 Other financial liabilities

Financial liabilities at fair value through profit and loss

Contingent consideration at initial recognition

Fair value gain

Contingent consideration at 31 December

Total current

Total non-current

2019

£000's

171

(72)

99

60

39

2018

£000’s

-

-

-

-

-

Financial assets at fair value through profit and loss

Secured convertible loan notes

615

-

As part of the purchase of share in NGCL a contingent consideration has been agreed. Contingent 
consideration is payable dependent on the satisfaction of product milestones in July 2020 and stretching 
financial milestone targets in December 2021. The maximum possible deferred consideration is £0.72m.

2019

£000's

2018

£000’s

The carrying amount of these liabilities is equivalent to the fair value.

Contingent consideration

Secured convertible loan notes 

At 31 December 2019 the Group held £600,000 of the authorised £800,000 secured convertible loan notes in 
NGCL. This consists of the first two draw down tranches of the loan. After the final tranche of £200,000 has 
been drawn down in Q1 2020, the Group will have the option to convert the entirety of the secured loan notes 
into a total shareholding of 50.1% together with the already held shareholding. 

These secured convertible loan notes are convertible at the option of the Group until 31 December 2021. If the 
convertible loan note is not exercised by Good Energy, it becomes repayable half yearly in arrears on 30 June 
and 31 December by NGCL, over the following five years until 31 December 2026, accruing interest annually 
at 8.0%.

Secured convertible loan notes

Carrying amount

Fair value

£000's

615

£000’s

615

The fair value has been calculated using the discounted cash flow method over the contractual cashflows.

20. Inventories

Renewable Obligation Certificates

Emission Certificates

Generation Development sites

Total

Parent Company

Consolidated

2019

2018

2019

2018

£000’s

£000’s

£000’s

£000’s

-

-

-

-

-

-

-

-

9,506

8,434

435

-

146

-

9,941

8,580

As at 31 December 2019 there were Renewable Obligation Certificates (ROCs) of £6,263,879 (2018: 
£5,199,973) included in the above amount that were unissued for generation that had already taken place 
and therefore these ROCs were not available for sale before the end of the financial year. The cost of 
inventories recognised as an expense, including the impairment value, and included in 'cost of sales' amounted 
to £12.5m (2018: £10.9m).

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Notes to the Financial Statements

Notes to the Financial Statements

21. Trade and Other Receivables

21. Trade and Other Receivables (continued)

Gross trade receivables and unbilled receivables

Provision for impairment/non-payment of trade 
receivables

Net trade receivables and unbilled receivables

Prepayments and other debtors

Other taxation

Total

Parent Company

Consolidated

2019

2018

2019

2018

£000’s

£000’s

£000’s

£000’s

8

-

8

55

35

98

817

33,724

31,349

-

(7,345)

(5,922)

817

26,379

25,427

94

9

2,951

100

4,087

282

920

29,430

29,796

Where a customer account is in credit this is included in contract liabilities (see note 29 Trade and  
Other Payables). 

The Group has identified that the amount of accrued income subject to estimation uncertainty is 
approximately £1.1m.

The Group has a provision in place to set aside an allowance to cover potential impairment and non-
payment of trade receivables. An expected credit loss provision has been calculated on trade receivables in 
accordance with IFRS 9 Financial Instruments. Some trade receivables are with customers who do not have 
externally available credit ratings.

The movements on the provision for impairment and non-payment of trade receivables is shown below:

Movement on the provision for impairment and 
non-payment of trade receivables

Balance at 1 January

Increase in allowance for impairment/non-payment

Impairment/non-payment losses recognised

Balance at 31 December

2019

£000’s

5,922

3,674

(2,251)

7,345

2018

£000’s

4,535

3,576

(2,189)

5,922

Trade receivables  
31 December 2019

Contract 
assets 

Current

<30 days

Days past due

30-60 
days

61-90 
days

>91 days

Total

£000's

£000's

£000's

£000's

£000's

£000's

£000's

Expected credit  
loss rate

Estimated total gross 
carrying amount at 
default

Expected credit  
loss rate

-

-

-

5.5%

5.5%

12.4%

19.9%

70.9%

15,703

6,230

2,518

1,475

7,798

33,724

864

343

313

294

5,531

7,345

Trade receivables  
31 December 2018

Contract 
assets 

Current

<30 days

Days past due

30-60 
days

61-90 
days

>91 days

Total

£000's

£000's

£000's

£000's

£000's

£000's

£000's

Expected credit  
loss rate

Estimated total gross 
carrying amount at 
default

Expected credit  
loss rate

-

-

-

3%

5%

8%

19%

53%

14,473

4,105

2,280

1,453

9,038

31,349

480

190

173

275

4,804

5,922

All trade receivables are designated as financial assets measured at amortised cost.

22. Cash and Cash Equivalents 

Cash at bank and in hand

Short-term bank deposits

Security deposits

Total

Parent Company

Consolidated

2019

2018

2019

2018

£000’s

£000’s

£000’s

£000’s

5,603

309

-

-

-

-

9,476

952

3,239

8,040

3,081

4,541

5,603

309

13,667

15,662

As part of the bank loan agreements, the lenders require a minimum cash balance to be held in separate 
reserve accounts, these balances are disclosed as "restricted deposit accounts" in non-current assets on the 
Statement of Financial Position. Included within cash at bank and in hand for both the Parent Company and 
the Group is £340,038 (2018: £215,579) in respect of monies held by the Good Energy Employee Benefits Trust. 
The credit quality of cash and cash equivalents can be assessed by reference to external credit ratings  
as follows:

AA

AA-

A+

A

B

BBB+

Total

Parent Company

Consolidated

2019

2018

2019

2018

£000’s

£000’s

£000’s

£000’s

-

-

5,509

-

94

-

-

215

-

-

94

-

95

-

-

215

10,032

10,501

1,000

397

2,143

1,000

406

3,540

5,603

309

13,667

15,662

Cash and cash equivalents are all financial assets designated as financial assets at amortised cost.

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Notes to the Financial Statements

23. Disposal Groups Held for Sale 

Property, plant and equipment

Total assets

Carrying value

Consolidated 2019

Consolidated 2018

£000’s

-

-

-

£000’s

6,649

6,649

6,649

The property, plant and equipments assets held for sale at 31 December 2018 relate to the subsidiary Good 
Energy Brynwhilach Solar Park Limited; the sale agreement was completed and this company was sold in the 
year. They also related to a wind development project, residential property and a transformer. The residential 
property was sold in the year, however despite active marketing a buyer was not found for the transformer 
and wind development project. The assets' have been written down to a £nil value this year, have ceased to 
be classified as held for sale, and therefore transferred to fixed assets. The transformer continues to be actively 
marketed for sale, and if a buyer is found will reverse the impairment recognised as appropriate.

24. Share Capital and Share Premium

25. Deferred Taxation

The provision for deferred taxation is made up as follows:

Consolidated

At 1 January

Charged to the Consolidated Statement of 
Comprehensive Income

Elimination on disposal of subsidiaries

Charged to equity

At 31 December

Deferred tax assets

Parent Company & Consolidated

Number of 
shares issued and 
fully paid 

Share  Capital 

Share Premium 
Account

At 1 January 2018

16,517,160

Proceeds from shares issued

54,361

At 31 December 2018

16,571,521

Proceeds from shares issued

49,724

At 31 December 2019

16,621,245

£000’s

826

3

829

3

832

£000’s

12,652

67

12,719

71

Total

£000’s

13,478

70

13,548

74

On short term timing differences

Losses

Interest deductible

Total

Deferred tax liabilities

12,790

13,622

On accelerated capital allowances

2019

£000’s

927

46

(70)

-

903

2019

£000’s

181

976

-

1,157

2019

£000’s

2,060

2018

£000’s

145

717

-

65

927

2018

£000’s

65

860

11

936

2018

£000’s

1,863

The ordinary shares are the only class of shares in the Company. Holders of ordinary shares are entitled to vote 
at general meetings of the Company and receive dividends as declared. The Articles of Association of the 
Company do not contain any restrictions on the transfer of shares or on voting rights.

In 2019, the Company issued 49,724 ordinary shares of 5p each for total consideration of £74,414 resulting in a 
share premium of £71,928. This relates to two scrip dividend issues in lieu of full year and interim dividend cash 
payments of 34,641 and 15,083 shares respectively (2018: 35,845 and 18,516 shares respectively).   

Clarke Willmott Trust Corporation Limited holds in trust 293,270 (2018: 403,270) ordinary shares of the 
Company for the present and the future beneficiaries of the Good Energy Group Employee Share Option 
Scheme.  These are deducted from equity as the Employee Benefit Trust shares shown in the Consolidated 
and Parent Company Statements of Changes in Equity. During the year the Trust disposed of 110,000 (2018: 
59,969) shares as a result of options exercised and acquired nil (2018: nil) shares.

A final dividend of 2.6p per share was proposed (2018: 2.5p).  However, the Board has recommended 
deferring the full year final dividend considering the ongoing COVID-19 pandemic and prudent  
cashflow management. 

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Notes to the Financial Statements

Notes to the Financial Statements

25. Deferred Taxation (continued)

26. Borrowings and Other Financial Liabilities

Accelerated 
capital 
allowances

Short-term 
timing 
differences

Losses

Interest 
deductible 

Total

£000’s

£000’s

£000’s

£000’s

£000’s

Deferred tax assets/(liabilities)

At 1 January 2018

(2,079)

123

1,811

Credited/(charged) to the income 
statement

Elimination on disposal  
of subsidiaries

Charged to equity

At 31 December 2018

Credited/(charged) to the income 
statement

Elimination on disposal 
of subsidiaries

(Charged) to equity

216

-

-

(1,863)

(267)

70

-

7

-

(65)

65

116

-

-

(951)

-

-

860

116

-

-

At 31 December 2019

(2,060)

181

976

-

11

-

-

11

(145)

(717)

-

(65)

(927)

(11)

(46)

-

-

-

70

-

(903)

Deferred tax on losses incurred pre 1 April 2017 has only been recognised to the extent that the relevant 
companies which incurred the losses have sufficient deferred tax liabilities available for offset. Should deferred 
tax be recognised on all such losses, the deferred tax asset and profit after tax would increase by £25,361.

Current:

Bank and other borrowings

Bond

Loans from Group companies

Lease liabilities

Total

Parent Company

Consolidated

2019

2018

2019

2018

£000’s

£000’s

£000’s

£000’s

50

395

7,330

27

411

3,595

3,528

-

1,951

395

-

711

2,668

3,595

-

-

7,802

7,534

3,057

6,263

Parent Company

Consolidated

2019

2018

2019

2018

£000’s

£000’s

£000’s

£000’s

Non current:

Bank and other borrowings

-

108

35,314

37,297

Bond

Lease liabilities

Total

16,757

17,167

16,757

17,167

33

-

4,673

-

16,790

17,275

56,744

54,464

The Group has undrawn bank overdraft facilities of £10,000,000 (2018 : £10,000,000) as at 31 December 2019.  
This facility is secured by guarantees from Good Energy Limited, Good Energy Gas Limited and other Group 
entities.

At 31 December 2019, £5,449,283 (2018: £6,193,641) of the bank loans relate to the Parent Company’s 
subsidiary, Good Energy Delabole Wind Farm Limited and is secured by a mortgage debenture on that 
company dated 16 January 2010 incorporating a fixed and floating charge over all current and future assets 
of that subsidiary. The facility will be repaid from future cash flows arising from the wind farm of this company. 
On 7 January 2011, the loan balance was transferred from the build phase to the repayment phase, with 
repayments of capital and interest scheduled bi-annually over 15 years.

As part of the facility Good Energy Delabole Wind Farm Limited entered into a floating rate to fixed rate 
interest swap. They were entered into at the same time and in contemplation of one another, have the same 
counter-party, relate to the same risk and amortise concurrently. Given these circumstances and the fact that 
there is no economic need or substantive business purpose for structuring the transactions separately that 
could not also have been accomplished in a single transaction, these instruments are treated as one fixed rate 
loan instrument. The fixed rate interest is payable at an annual rate of 7.15%. 

158

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Strategic ReportGovernance ReportFinancial StatementsGood Energy Annual Report 2019Financial statementsNotes to the Financial Statements

Notes to the Financial Statements

26. Borrowings and Other Financial Liabilities (continued) 

26. Borrowings and Other Financial Liabilities (continued) 

At 31 December 2019, £33,882,698 (2018: £34,990,240) of the bank loans relate to the Parent Company’s 
subsidiary, Good Energy Generation Assets No. 1 Limited.  The loan is secured by a mortgage debenture 
on that company and its subsidiaries dated 17 December 2014, incorporating charges over the shares of 
that company and those of its subsidiaries.  The facility will be repaid from future cash flows arising from the 
subsidiaries of that company with repayments of capital and interest scheduled quarterly over a period of 18 
years commencing 17 December 2014. Interest is payable at 6.85% and the outstanding principal balance is 
partially exposed if annual RPI inflation exceeds 3%. Costs incurred in raising finance were £2,754,299 (2018: 
£2,754,299) and are being amortised over the life of the loan.  

Parent Company

31 December 2019

Inter-
company
loan

Bond

Bank and 
other 
borrowings

Lease 
liabilities

Total

£000’s

£000’s

£000’s

£000’s

£000’s

Due less than 1 year

7,330

395

Due between 1 and 5 years

-

16,757

Total

7,330

17,152

50

-

50

27

33

60

Parent Company

31 December 2018

Inter-
company
loan

Bond

Bank and 
other 
borrowings
(restated*)

Finance 
lease
(restated*)

£000’s

£000’s

£000’s

£000’s

£000’s

Due less than 1 year

3,529

3,595

Due between 1 and 5 years

-

17,167

Total

3,529

20,762

345

50

395

65

58

123

7,534

17,275

24,809

*The 2018 Parent Company bank and other borrowings and finance leases amounts have been restated as 
the finance leases values were incorrectly presented as bank and other borrowings and vice versa. This has 
been corrected above.

7,802

16,790

24,592

Total

Consolidated

31 December 2019

Due less than 1 year

Due between 1 and 5 years

Due more than 5 years

Total

Consolidated

31 December 2018

Due less than 1 year

Due between 1 and 5 years

Due more than 5 years

Total

Bank and 
other 
borrowings

Bond

Lease 
liabilities

Total

£000’s

£000’s

£000’s

£000’s

1,951

9,115

26,199

37,265

Bank and 
other 
borrowings

395

16,757

-

17,152

Bond

711

1,381

3,292

5,384

Finance 
lease

3,057

27,253

29,491

59,801

Total

£000’s

£000’s

£000’s

£000’s

2,668

8,456

28,841

39,965

3,595

17,167

-

20,762

-

-

-

-

6,263

25,623

28,841

60,727

The fair values of borrowings have been calculated taking into account the interest rate risk inherent in the 
loans and the bond.  The fair value estimates and carrying values of borrowings (excluding issue costs) in 
place at 31 December 2019 are: 

2019

Fair
value

2019

Carrying 
value

2018

Fair
value

2018

Carrying 
value

£000s

£000s

£000s

£000s

Good Energy Delabole Wind farm Ltd

5,565

5,546

6,378

6,352

Good Energy Generation Assets No. 1 Limited 

34,683

33,883

35,463

34,990

Corporate bond

17,309

16,785

20,353

20,409

Borrowings are designated as other financial liabilities held at amortised cost.

160

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Notes to the Financial Statements

Notes to the Financial Statements

27. Changes in Liabilities Arising from Financing Activities

29. Trade and Other Payables

1 January 
2019

Recognition 
of right of use  
obligations

Cash flows

Other

31 December 
2019

£000's

£000's

£000's

£000's

£000's

Current interest-bearing loans and 
borrowings (excluding items listed 
below)

Non-current interest-bearing loans 
and borrowings (excluding items listed 
below)

Current lease obligations

Non-current lease obligations

5,852

54,356

411

108

Total liabilities from financing activities

60,727

-

-

685

4,999

5,684

(6,311)

2,805

2,346

-

(2,285)

52,071

(769)

384

711

-

(434)

4,673

(7,080)

470

59,801

The 'Other' column includes the effect of reclassification of the non-current portion of interest-bearing loans  
and borrowings, including obligations under leases to current due to the passage of time, and the effect of 
accrued but not yet paid interest on interest-bearing loans and borrowings. The Group classifies interest paid 
as cash flows from operating activities.

Parent Company

Consolidated

2019

£000's

68

180

-

-

-

2018

£000's

196

144

-

-

-

248

340

2019

£000's

1,277

28,751

1,297

18

4,144

35,487

2018

£000's

802

31,028

1,512

-

3,522

36,864

Trade payables

Accruals 

Social security and other taxes

Other payables

Contract liabilities

Total

Trade payables, accruals and other payables are designated as other financial liabilities held at  
amortised cost.

All of the contract liabilities in 2018 as shown above were recognised as revenue in 2019.

30. Dividends Paid

28. Provisions for Liabilities

Amounts recognised as distributions to shareholders in the year (based on the number of shares in issue at the 
record date) are as follows:  

A provision has been recognised for decommissioning costs associated with wind farms and solar parks owned 
and operated by the Group. The value of the provision below wholly relates to the decommissioning provision. 
The decommissioning provision is based on MWh or number of turbines for the respective generating sites. 

Consolidated

1 January

Additions to provisions

Disposals

Charged to profit or loss

31 December

2019

£000s

1,446

-

(174)

22

1,294

2018

£000s

1,250

174

-

22

1,446

Final dividend for prior year of 2.50p per share 
(2018: 2.30p)

Interim dividend for current year of 1.10p per share 
(2018: 1.00p)

Sub-total

Dividends waived

Total

2019

£000’s

414

183

597

(13)

584

2018

£000’s

380

166

546

(14)

532

Dividends waived represent dividends that would accrue on shares held by the Good Energy Group Employee 
Benefits Trust were they not held by the Trust.

A final dividend of 2.60p per share was proposed on 16 March 2020. However, the Board has recommended 
deferring the full year final dividend considering the ongoing COVID-19 pandemic and prudent cashflow 
management.

Of the total dividend distributed for the year, £74,414 (2018: £69,621) was paid in the form of scrip dividends 
with the balance of £510,398 (2018: £461,714) settled in cash.

162

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Notes to the Financial Statements

Notes to the Financial Statements

31. Cash Generated from Operations 

32. Share-Based Payments 

Reconciliation of net income to net cash provided by operating activities:

Parent Company

Consolidated

2019

2018

2019

2018

£000’s

£000’s

£000’s

£000’s

Profit/(loss) before tax from continuing operations

(1,755)

Loss before tax from discontinuing operations

-

Profit/(loss) before income tax

(1,755)

305

-

305

1,258

(937)

321

2,304

(687)

1,617

Adjustments for:

Depreciation

Amortisation

Gain on assets disposals

Tidal Lagoon impairment

Fair value adjustment of contingent consideration

Net gain on financial assets at FVTPL

Provision against investments in and loans  
to subsidiaries

Share based payments

Share of loss of associate

194

3

(765)

-

(72)

(15)

2,102

-

42

Dividend income from subsidiaries

(3,500)

(5,000)

150

3,467

2,948

-

-

500

-

-

-

358

-

487

1,435

-

(72)

(15)

-

81

42

-

858

-

500

-

-

-

358

-

-

In order to retain the services of key employees and to incentivise their performance, the Parent Company 
operates the Good Energy Employee Share Option Scheme under which certain employees of the Group 
are granted options to acquire Ordinary 5p shares at future dates. Costs in respect of these options of 
£81,271 (2018: £357,633) are recognised in the Consolidated Statement of Comprehensive Income. As at 31 
December 2019, the following options had been issued:

Number of options

Weighted average
exercise price

Total exercise
consideration

2019

2018

2019

2018
(Restated*)

2019

2018
(Restated*)

(Number)

(Number)

(£)

(£)

£000’s

£000’s

Outstanding at beginning  
of year

1,627,271 

1,368,347

 0.81 

 0.96 

1,321

1,318

Granted

Exercised

-

505,168

 -   

(110,000)

(58,369)

 1.11 

Cancelled/surrendered

(261,978)

(187,875)

 0.67 

 0.05 

 0.26 

 0.04 

-

(122)

(177)

 25 

(15)

(7)

Outstanding at the end  
of year

 1,255,293  1,627,271

 0.81 

 0.81 

1,022 

1,321

*In the prior year, the correction of the number of share options brought forward were incorrectly overstated 
by 40,000 and the total exercise consideration was not adjusted. This has been recalculated and the opening 
total exercise consideration has been corrected from £1,681,000 to the correct figure of £1,318,243. 

In order to partially fulfil the options granted, 293,270 (2018: 403,270) shares representing approximately 
23% (2018: 25%) of the options outstanding have already been issued and held by Clarke Willmott Trust 
Corporation Limited as the Trustee of the Good Energy Group Employee Benefits Trust. Dividends have been 
waived on these shares.

Finance costs/(income) -  net

1,011

783

4,244

4,345

Changes in working capital (excluding the effects 
of acquisition and exchange differences on 
consolidation)

Inventories

Trade and other receivables

Trade and other payables

-

822

(92)

-

(1,012)

(743)

366

6

(1,198)

346

2,682

4,415

Cash (outflow)/inflow from operations

(2,025)

(3,641)

8,146

18,069

164

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Strategic ReportGovernance ReportFinancial StatementsGood Energy Annual Report 2019Financial statements 
Notes to the Financial Statements

Notes to the Financial Statements

32.  Share-Based Payments (continued)

34.  Related Party Transactions

The options expire at various dates up to November 2028.  Share options outstanding at the end of the year 
have the following expiry date and exercise price:

Grant-vest

Expiry year

Exercise price in £ per
share options

Share options 
(thousands)

2004-2007

2012-2015

2012-2015

2013-2016

2015-2017

2015-2017

2015-2018

2015-2018

2016-2019

2017-2020

2018-2021

2019

2025

2025

2026

2027

2027

2028

2028

2029

2030

2031

 0.75 

 0.50 

 1.15 

 1.25 

 -   

 2.29 

 2.25 

 2.27 

 0.05 

 0.05 

 0.05 

2019

 -   

 189 

 104 

 169 

 22 

 200 

 50 

 -   

 10 

 87 

 424 

1,255

2018

 15 

 189 

 179* 

 189* 

 22 

 200 

 100 

 24 

 117 

 87 

 505 

1,627

*in the prior year accounts these the number of share options for these two tranches were incorrectly 
reported as 162,000 and 206,000. These have been corrected to reflect the actual number of shares in the 
tranches at that time. 

There were no share options granted in the current year. 

See note 10 for the total expense recognised in the Income Statement for share options granted to Directors 
and employees.

33.  Pensions

The Group operates a defined contribution pension scheme. The assets of the scheme are held separately 
from those of the Group in an independently administered fund. The pension cost represents contributions 
payable by the Group to the fund and amounted to £528,781 (2018: £458,538).

Contributions totalling £41,250 (2018: £57,630) were payable to the fund at the end of the financial year and 
are included in other payables.

The Group has no further pension liability either realised or contingent and in line with the Group’s 
environmental position all employer contributions are invested within a suitable fund.

During the prior period, the Group entered into an arm’s length agreement with Martin Edwards for the 
provision of consultancy services related to the evaluation of emerging renewable energy technologies and 
related products and services. The agreement commenced on 1 June 2018 and can be terminated by either 
party on 1 months notice. The contracted annual value of the consultancy services is £18,000. Martin Edwards 
is a Non-Executive Director of Good Energy Limited, and a former director of Good Energy Group PLC.

As at 31st December 2019, Tidal Lagoon Power Ltd owed the Group £21,791 in respect of electricity supplied 
to its head office. The electricity was supplied by the Group in the ordinary course of its business and on arm’s 
length rates and terms. The CEO of Tidal Lagoon Power Ltd is Mark Shorrock, the husband of Juliet Davenport.  
£20,488 of this debt has been provided for through the Group's expected credit loss provision.

35.  Subsequent Events

In March 2020 the outbreak of COVID-19 became a global issue. To date, the Group has not seen any 
significant financial impact from the COVID-19 outbreak, however it continues to monitor the situation closely 
throughout the coming weeks and months.

In light of the outbreak’s wide-ranging implications, the Group have undertaken a detailed going concern 
review to ensure continued operations throughout the period affected, with a particular focus on cash flows 
and business continuity plans.

The extent of this period of closure and the impact on the economy after lockdown are uncertain, but 
downside scenario forecasting indicates impacts on customer energy usage and cash collection rates as 
compared to the Board’s expectations prior to development of the Covid-19 pandemic. Despite the potential 
impact on results, the Directors do not currently expect an impairment of goodwill, other intangibles, property, 
plant and equipment and right of use assets, as there was significant headroom when an impairment test was 
undertaken at the year end.

The Directors proposed a final dividend for the year of 2.6p per share. Due to the ongoing COVID-19 outbreak 
the Directors have subsequently proposed to defer the payment of this dividend, to provide more flexibility in 
the Group’s response to the pandemic. The Directors will continue to monitor the COVID-19 situation on an 
ongoing basis and consider the payment of the final dividend.

On the 30th March 2020, the third tranche of the secured convertible loan notes granted to Next Green Cars 
Ltd as part of the Zap-map investment was drawn down. At this time, the Group has the option to convert 
these loan notes into shares which combined with the Groups existing holding will provide a majority stake in 
the business. As such, the Group gained effective control of Next Green Cars Ltd from this date. No decision 
has yet been made to convert the loan notes into equity.

The Directors have concluded that the latest developments up to the date of signing of these financial 
statements have not provided further information about the circumstances existing at the reporting date, 
therefore do not expect any adjustments to these financial statements to be made as a consequence. 

As a result of the detailed review, the Directors have identified a material uncertainty that would cast 
significant doubt on the Group’s ability to continue as a going concern, but have assessed that there is a 
reasonable expectation that the Group will be able to continue in operation and meet its commitments as 
they fall due over the going concern period.  The detailed going concern review can be found in full per note 
2.3, on page 107.

166

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Strategic ReportGovernance ReportFinancial StatementsGood Energy Annual Report 2019Financial statements 
Directors and Corporate Resources

Directors

William Whitehorn (Non-Executive 
Chairman) 
Juliet Davenport (Chief Executive) 
Emma Tinker (Non-Executive Director) 
Timothy Jones (Non-Executive Director) 
Nemone Wynn-Evans (Non-Executive 
Director) 
Rupert Sanderson (Chief Financial Officer)

Company Secretary  

EVERSECRETARY LIMITED 
Eversheds House 
70 Great Bridgewater Street 
Manchester M1 5ES

Company Number 

04000623

Financial Advisors  

Investec Bank plc 
30 Gresham Street 
London, EC2V 7QP

Bankers 

Lloyds Bank 
PO Box 112, Canons House,  
Canons Way 
Bristol BS99 7LB

The Co-operative Bank PLC 
PO Box 101, 1 Balloon Street 
Manchester M60 4EP 

Legal Advisors 

Norton Rose LLP 
3 More London, Riverside 
London, SE1 2AQ

Principal Place of Business and Registered 
Office

Registrars

Monkton Reach 
Monkton Hill, Chippenham  
Wiltshire SN15 1EE

Independent Auditors 

EY 
The Paragon, 32 Counterslip 
Bristol BS1 6BX

Computershare Investor Services PLC 
The Pavilions, Bridgwater Road 
Bristol BS99 6ZY 

Notes to the Financial Statements

36.  Subsidiary Undertakings Exempt from Audit

Good Energy Group PLC has provided the necessary parental guarantees under Section 479A of the 
Companies Act 2006, to enable the following companies exemption from audit:

Directly held subsidiaries:

Good Energy Cedar Windfarm Limited 
Good Energy Lanyon Solar Park (011) Limited 
Good Energy Mapperton Solar Park (007) Limited 
Good Energy Tidal Limited 
Llangyfelach Community Solar Farm C.I.C                                                            
Worminster Down Somerset Community Solar Farm C.I.C                                                       
Good Energy Development (No.1) Limited 
Good Energy Development (No.3) Limited 
Good Energy Development (No.4) Limited 
Good Energy Development (No.5) Limited 
Good Energy Development (No.6) Limited 
Good Energy Development (No.7) Limited 
Good Energy Development (No.8) Limited 
Good Energy Development (No.9) Limited 
Good Energy Development (No.10) Limited 

Good Energy Development (No.12) Limited 
Good Energy Development (No.14) Limited 
Good Energy Development (No.15) Limited 
Good Energy Development (No.16) Limited 
Good Energy Development (No.17) Limited 
Good Energy Development (No.20) Limited 
Good Energy Development (No.21) Limited 
Good Energy Development (No.22) Limited 
Good Energy Development (No.24) Limited 
Good Energy Development (No.25) Limited 
Good Energy Development (No.26) Limited 
Good Energy Development (No.27) Limited 
Good Energy Development (No.28) Limited 
Good Energy Development (No.29) Limited 
Good Energy Development (No.30) Limited

Indirectly held subsidiaries:

Good Energy Carloggas Solar Park (009) Limited 
Good Energy Creathorne Farm Solar Park (003) Limited 
Good Energy Cross Road Plantation Solar Park (028) Limited 
Good Energy Hampole Windfarm Limited 
Good Energy Lower End Farm Solar Park (026) Limited 
Good Energy Rook Wood Solar Park (057) Limited 
Good Energy Woolbridge Solar Park (010) Limited.

37. Generation Assets: Technical Data

Wind Farms

Hampole, South Yorkshire

Turbine manufacturer: Senvion

No. of turbines: 4

Installed capacity: 8.2MW

Turbine power output: 2.05 MW

Delabole, Cornwall

Turbine manufacturer: Enercon

No. of turbines: 4

Installed capacity: 9.2MW

Turbine power output: 2.3 MW

Solar Farms

Woolbridge, Dorset

Solar modules: Yingli

Nominal capacity DC: 4,996 kWp

168

Solar Farms (continued)

Creathorne, Cornwall

Solar modules: Yingli

Nominal capacity DC: 1,841 kWp

Rook Wood, Wiltshire

Solar modules: ReneSola

Nominal capacity DC: 4,981 kWp

Lower End, Wiltshire

Solar modules: Jinko Solar

Nominal capacity DC: 4,999 kWp

Crossroads, Dorset

Solar modules: Jinko Solar

Nominal capacity DC: 4,999 kWp

Carloggas, Cornwall

Solar modules:  ReneSola

Nominal capacity DC: 8,304 kWp

Good Energy Annual Report 2019 
 
 
 
 
 
 
 
 
 
Annual Report & Accounts 2019

Good Energy Group PLC
Monkton Reach
Monkton Hill
Chippenham
SN15 1EE

group.goodenergy.co.uk