Gladstone Commercial Corporation Annual Report 2021

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FY2021 Annual Report · Gladstone Commercial Corporation

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Annual Report
& accounts

2021

Annual Report &
Accounts 2021

Contents

Strategic Report

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

How we achieve our purpose:
Powering a cleaner, greener world

What we do to achieve our purpose:
Empowering you to generate, share,
store, use and travel by clean power

Governance Report

Board of Directors

Governance & Directors’ Report

Audit & Risk Report

Remuneration & Nomination 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

110

120

122

124

126

129

130

131

132

Contents

Good Energy Annual Report 2021

Strategic Report

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

Foreword

Our purpose and manifesto

2021 achievements

Sustainable Development Goals

Chairman’s statement

Chief Executive’s review

How we achieve our purpose:
Powering a cleaner, greener world

Strategic review

Engaging with our stakeholders

The business model

Key performance indicators

Operating review

Principal risks and uncertainties

Chief financial officer’s review

What we do to achieve our purpose:
Empowering you to generate, share,
store, use and travel by clean power

The Good Future Board

Renewable Nation

COP26

Our social impact

Our environmental impact

Carbon reporting

Task Force on Climate-related Financial Disclosure

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Contents

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

Foreword from our CEO, Nigel Pocklington

Joining Good Energy as CEO in 2021, I was drawn to the business primarily because of its purpose.

I have always worked within purpose led business. In fact, I believe the most successful businesses always
have a purpose beyond simply making money. But Good Energy’s is so clear, and so critical — combating
climate change.

It was an eventful year to join. A world still coping with a global pandemic. Climate high up on the national
and international political and media agenda with the UN’s climate conference COP26 coming to Glasgow.
And as the year progressed, an increasingly volatile energy market driven by global gas prices. It brought into
stark focus that there is not only an environmental argument for moving away from fossil fuels, there is an
economic one too.

Throughout all of this, I am proud to say Good Energy never wavered in its commitment to climate action.
It only strengthened our resolve — 2021 was a landmark year for our purpose in many respects.

We took to the global stage at COP26. Introduced our Good Future Board, young people holding us to
account on protecting their futures. Continued to cut our carbon footprint, remaining substantially lower than
a pre-COVID-19 baseline. Achieved a number of breakthroughs on combating greenwash in energy retail.
Environmental and social governance shifted from a nice to have in business, to the only way of operating.

The energy crisis has not abated and does not look to do so for the foreseeable. Meanwhile the climate
crisis looms ever larger. The long-term solution to both is a cleaner, greener energy and transport system.

We need action from government. But businesses like us, and people like our customers, can lead the way.
That is what we intend to do.

Nigel Pocklington

Good Energy Annual Report 2021

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.

Strategic Report

2021 achievements

Mobility

Continued investment in Zap-Map,
which has made strong progress
with the development of several new
commercial products.

Time of use tariff launched for EV
drivers to reduce the cost of charging.

Decentralised
energy

Smart meter roll out accelerated with
30,000 meters installed to date.

Leading voluntary FIT provider with 93%
customer satisfaction rating.

Good Energy Annual Report 2021Green credentials & customer service

Awarded Which? Eco Provider badge for
energy, coming top of their leader board.

We have an ‘excellent’ 4.5* rating from
customers on Trustpilot.

All Good Energy tariffs are accredited as
Uswitch Green Tariff Gold Standard.

Customer numbers increased in 2021 across
all categories of the business.

Financial

Transformational sale of our generation assets
in January 2022: using capital from our past to
invest in our future.

The company is now debt free on a net basis.
Gross debt reduced by 86.5% compared with
year-end 2022.

Managed the impact of wholesale commodity
cost rises seen in H2 2021 due to prudent
approach to hedging.

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Strategic Report

Sustainable Development Goals

Sustainability is why we’re in business

Sustainability is a broad term, but it captures the need to protect and preserve
our planet.

The UN’s Sustainable Development Goals (SDGs) provide a strong framework and
guide for businesses to work towards. These 17 goals range across environmental and
social factors, from protecting life on land to ending hunger.

Good Energy is a member of the UN Global Compact, the world’s largest corporate sustainability initiative,
founded to encourage businesses to support the SDGs. Our business has two of the goals at its heart:

Affordable & clean energy (Goal 7)

Our unique model has remained unchanged for over 20 years: support the growth of independent,
renewable generation in the UK. This means we offer our community of over 1,900 generators a
fair price for their power and a route to market for small clean energy projects. Our customers,
employees, and investors are given an opportunity to support this model and be part of the solution
to the climate crisis.

Climate action (Goal 13)

Good Energy was set up to tackle climate change, and this defining global challenge continues to
inform how we operate as a company. Our financial decisions; new customer propositions; or policy
and regulatory positions, are based on this starting point.

Good Energy Annual Report 2021

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Strategic Report

Chairman’s statement

Overview

I opened my statement in our 2020 Annual Report
by remarking on the historically tumultuous prior
year we had witnessed. 2021 certainly sustained that
theme, with the continuation of a global pandemic
and national lockdowns leading into major disruption
for the energy market.

Geopolitical tensions, not least between Russia
and Ukraine, sent global gas market prices surging
upwards to record high levels, taking power prices
with them. In late 2021 this was exacerbated by a
perfect storm of conditions ironically including low
wind speeds alongside nuclear outages - which
followed on to multiple energy supplier failures.

It was a storm Good Energy did well to weather
successfully, due to our prudent hedging and buying
electricity well in advance from our renewable
generators through our decentralised model.

Despite these extraordinarily challenging market
conditions, we had a good operational performance
in 2021 and continued the delivery of our strategy,
hitting several key milestones. We were able to make
tangible investments into that strategy — making it
simple for all to generate, share, store, use and travel
with clean power.

Towards the end of the year, we announced the sale
of our generation portfolio. This transformational
sale has now completed, leaving Good Energy a
substantially debt free company.

Market challenges

The scale of the energy crisis in 2021 was
unprecedented. Wholesale power prices quadrupled,
and we saw 28 energy suppliers exit the market.

It is a crisis which is not abating soon, stoked
further by Russia’s appalling actions in Ukraine.
Coupled with inflation, which was at a 30 year
high at the end of the year, as well as rising food
and fuel costs, we are now firmly in the midst of
a full-scale cost of living crisis.

The UK government has announced a suite of actions
to address rising energy bills, and it is inarguable that
intervention is required at this time.

Ultimately however, this can only provide relief in
the short-term. The long-term solution remains
investment in renewable technologies and a shift
to a greener energy system. With fewer suppliers in
the market, this leaves greater scope for prudent
operators like Good Energy to continue driving
innovation across the sector.

“We had a good operational
performance in 2021 and
continued the delivery of our
strategy, hitting several key
milestones — making it simple for
all to generate, share, store, use
and travel with clean power.”

Good Energy Annual Report 2021

Good Energy’s scrip dividend scheme continues to
operate and the Board will confirm the payment
timetable and final dividend in the coming weeks,
alongside circulating the Notice of AGM.

Looking ahead

It is difficult to overstate the volatility of the energy
market currently. However, Good Energy is well
positioned both from a cash perspective, and an
on-going outlook. The climate crisis already provided
urgency to transition to a clean energy system.
Today’s turmoil provides geopolitical urgency to
achieve greater energy independence, too.

This, coupled with a substantially different looking
energy supplier market, leaves Good Energy with a
more powerful role than ever to play in accelerating
the transition to renewables.

Will Whitehorn

Chairman

Strategic developments

Our decision to sell our generation portfolio allows
us to access capital from our past to invest in our
strategy. It also leaves us in a strong cash position
despite the continued market volatility.

Looking ahead, our first focus will be on decentralised
energy. Always a core part of Good Energy’s business,
we will be giving it renewed focus, building new
propositions for customers to generate their own
clean power in their homes and businesses.

Hand in hand with this is mobility. Electric
vehicles (EV) are expected to see 47% annual
growth through to 2026. Good Energy’s subsidiary
Zap-Map has solid leading position with 70% share
of a rapidly growing EV driver market in the UK. 2021
saw several strategic developments there too, with
the launch of paid subscriptions, several key payment
platform partners and a partnership with leading fleet
operator Fleetcor. We intend to invest further in the
business’s future.

All of this must be underpinned by strong digital
services and operations. Nigel Pocklington, who
became Good Energy’s new CEO in May 2021,
was appointed for this reason. His background in
leadership positions with digital platform businesses
including Moneysupermarket.com Group and
hotels.com positions him perfectly to develop and
execute our strategy.

Good Energy bonds

Following the successful restructuring of the financing
on our renewable generation asset portfolio, we were
in a strong cash position to repay 70% of the second
Good Energy Bond which took place in June 2021.
We will consider all relevant funding sources when
appropriate for further repayment.

Dividend

Alongside our ongoing investments, we aim to
deliver a dividend where appropriate, as part of our
growth strategy and capital allocation policy. The
policy has the objective of investing both organically
and inorganically across the business and paying a
dividend when appropriate to provide an appropriate
return to shareholders. We remain mindful of
maintaining and balancing the ability to invest in long
term growth opportunities.

Following a good operational performance in 2021,
the sale of the generation portfolio and reflecting
our confidence in the ongoing business, the Board
recommend a final dividend for 2021 of 1.8p per
ordinary share, taking our full year dividend to 2.55p.

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Strategic Report

Chief Executive’s Review

Overview

Good Energy’s mission has always been linked to a
crisis: climate change. We now find ourselves at the
forefront of an energy crisis, too. Well before Russia’s
attack on Ukraine, sharply rising gas prices led to
supplier failure as well as unprecedented increases in
costs to the consumer.

In September, my summary of the first half of
2021 was that the business had made a strong
start, both financially and in delivering against key
objectives. Our financial performance showed clear
recovery from the comparable period, which was
heavily hit by the first Covid-19 lockdown. That
performance, along with the balance sheet
improvements we announced at our full year results
earlier in the year meant that we announced a
resumption of the dividend.

In terms of strategy, we passed several milestones in
our development of mobility and energy as a service
– marrying digital platforms to help consumers and
businesses adopt green energy and consume it
intelligently. We also spoke about the growth of Zap
Map, new tariffs for EV drivers, progress in rolling out
smart meters and plans for customers who generate
as well as consume power.

In the second half of the year, we’ve seen largely
unprecedented and structural changes to the UK
energy landscape. I am proud of the way our
business has reacted to these events.

Despite rising wholesale prices, a raft of suppliers
exiting the market and significant operational
changes we have continued to operate successfully.
We had a challenging December, with record low
wind levels and record highs in wholesale electricity
and gas prices. Throughout the crisis we have used
our flexibility to set appropriate prices, and improved
cash collection capabilities and systems to mitigate
the impact on our business and our management of
working capital.

We have since seen some measures announced by
Government for the protection of customers’ bills,
including its £200 Energy Bills Rebate scheme. In the
Chancellor’s most recent Spring Statement we also
saw VAT scrapped for energy efficiency measures
such as solar panels, heat pumps or insulation. Whilst
not likely to help the most vulnerable customers in the
short term, this is a welcome move which aligns well
with Good Energy’s strategy.

Having announced our intention to sell our
generations assets, we completed this transaction in
January 2022. This was a transformational moment
for Good Energy. Whilst we celebrate our history and
impact on growing renewable energy in the UK, we
are moving forwards by using the proceeds from our
past to invest in our future.

“Our ambition is to support one
million homes and businesses to
cut carbon from their energy
and transport use by 2025.”

Good Energy Annual Report 2021Navigating the crisis and making progress on our
strategy has only been possible with the support of
Good Energy’s dedicated and professional team and
the patience of our customers, many of whom have
been with the business for several years. I am very
aware of the impact of high energy costs on society
and the economy, and we will look to reduce this
where we can, as soon as we are able. The longer
term need exposed by recent events for a resilient,
renewable and secure energy strategy for the UK is
at the heart of our mission as a company.

Shareholder support

I would like to place on record my sincere thanks
to Good Energy’s shareholders for their consistent
support both through the energy market crisis and
the unwanted and hostile takeover bid we saw in
the first months of my tenure.

As a listed business, we routinely provide detailed
levels of disclosure on a wide range of topics. As a
purpose driven business, transparency and trust is
even more important. The strong support we received
in recent shareholder actions demonstrate that we
have a loyal and supportive shareholder base. I’m
excited about the future of this business and look
forward to delivering on our digital first strategy as
part of the next wave of the energy market transition.

Green accreditation

We continue to raise awareness of how
people can directly support the transition to a
zero carbon future through their energy supply. In
March 2021, we became the first energy supplier to
have all of our tariffs accredited as Uswitch Green
Tariff Gold Standard. The comparison and switching
service’s independent panel judged our electricity
and gas tariffs to be ‘market leading in their
environmental credentials’.

In October 2021 we were awarded an Eco Provider
badge by Which? magazine after a lengthy research
process, which saw us come top out of over 40
energy companies, many of which have now exited
the market. This validates the unique work we have
been doing to support renewables for over 20 years.

We attended COP26 in November and our
secondary school-aged Good Future Board attended
Conference of Youth 16, a precursor to COP26 to
input youth voices into negotiations. We continue
to push for meaningful change across this industry.

Purpose and strategic vision

Today we launch a bold vision for the coming years.
Our ambition is to support one million homes and
businesses to cut carbon from their energy and
transport use by 2025.

Our mission remains as it always has; to power
a cleaner, greener world. We make it simple to
generate, share, store, use and travel by clean power.

We will be laser focused on our target markets and
service offerings:

• Renewable supply business – fairly priced,
transparent, 100% renewable electricity

• Decentralised energy – services to help homes
and businesses generate, store, consume and
share their own power

• Mobility – making it easier to own, drive, fuel

and pay for an electric vehicle.

Energy supply market context

Despite our clear strategic direction, the
current energy market has caused us to pause
some of our more acquisitive customer ambitions
in the short term.

In 2021, we saw the trend of consolidation
continue in the energy supply market. In total, 28
firms collapsed throughout the year. Whilst many
were victims of circumstance, a great deal were
poorly run, unhedged businesses which will lead
to the taxpayer and all bill payers, footing the bill.

As a result, in February 2022 we saw the price cap
increase by a staggering 54% to £1,971. Expectations
are that this will rise further throughout the year,
given the continued elevated wholesale prices.

The devastating war in Ukraine is a stark reminder
of the need for scaling up renewable energy and
services in the UK. Before this event, we had already
seen prices quadruple throughout 2021. Despite initial
abatement in early 2022, the war in Ukraine and
associated geopolitical nervousness has unfortunately
caused prices to increase further. Electricity
increased 472% and gas increased 752% year
on year (March 2022 vs March 2021).

This current energy crisis – affecting everyone from
consumers to suppliers, regulators and government
– means we are experiencing ongoing global
uncertainty and have not been immune from
the impacts from the wholesale market.

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Strategic Report

In December 2021, we outlined that the elevated
wholesale prices and record low wind levels would
lead to an adverse impact to our full year results by
approximately £3m. Electricity prices increased 36%
in December, whilst wind output was materially below
seasonal norms.

Despite this impact, we have continued to mitigate
against these risks where possible.

• Our derogation from the price cap provides us

with some pricing flexibility, recognising the cost
of delivering a 100% renewable service.

• To absorb some of the higher input costs, we

announced a second domestic Standard Variable
Tariff (SVT) price rise of 30% effective from 17
January 2022.

• We expect this to minimise the impact of the
rising forward prices over the medium term
and will continue to monitor the need to
increase prices further.

• We expect prices to stabilise, albeit it

at a significantly higher level, throughout
2022 and 2023.

• We remain well hedged for summer 2022 and plan
to incrementally increase hedging for winter 2022.

More recent events have heightened market volatility.
The escalating crisis between Russia and Ukraine has
caused significant short-term spikes in price since 21
February 2022. In early March, the price of gas spiked
over £8.00/therm. The longer-term impact on the
UK and European energy markets remains unknown.
Short-term measures to reduce reliance on Russian
gas include sourcing from elsewhere, but there is
also an opportunity for the UK to accelerate how we
develop and deploy renewable generation.

We anticipate that the days of low prices and
aggressive price competition are unlikely to return in
the short or medium term. Whilst there will inevitably
be pain for consumers, we are well positioned to help
those customers wishing to go green and have the
services to generate, consume, share and store fully
renewable power. We see this market evolving to be
focused less on price competition and more on trust,
purpose, products and services. Where we are well
placed to prosper.

Nigel Pocklington

Chief Executive Officer

Good Energy Annual Report 2021S
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Strategic Report

How we achieve
our purpose:
Powering
a cleaner,
greener world

Good Energy Annual Report 2021

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Strategic Report

Strategic review

Renewable supply

Our focus is to provide fair priced, transparent,
100% renewable electricity.

Current performance

Excellent customer service

We source 100% renewable electricity from over
1,900 independent generators across Britain. As
of January 2022, our fuel mix was 49% wind, 33%
biogen, 14% solar and 4% hydro.

0g CO2
p/kWh

49% wind

33% biogen

14% solar

4% hydro

We exist to give our customers the ability to generate
their own power, not just buy ours. To do this, we
have a clear strategy for a growing market in
decentralised, digitised clean energy and transport
services based on 100% ‘real’ renewable power. We
are already successfully delivering on this strategy,
as shown in our integration of new digital customer
service platforms for home and business customers
and launch of innovative new tariffs for electric
vehicle (EV) drivers.

Real renewable electricity

Good Energy has supplied 100% renewable electricity
for over 20 years, sourcing power directly from
renewable generators – rather than using regulatory
loopholes and certificates to greenwash.

Today we are:

•

Differentiated as a UK supplier backing
all electricity supply, both business and
domestic, with long-term contracts with
renewable generators.

The only UK supplier with the Uswitch
Green Tariff Gold Standard accreditation
for all its tariffs.

We have successfully embedded new digital
customer service platforms for home and business
customers. These investments have delivered
consistently high customer satisfaction ratings and
helped lower our cost to serve:

•

The Kraken customer service platform, from
Octopus Energy Group, is scalable and more
efficient. It will enable us to easily launch new
types of smart tariff.

• 100% of domestic supply customers have
been migrated to the Kraken platform.

•

We have an ‘excellent’ 4.5* rating from
customers on Trustpilot.

•

We partnered with one of the leading
software suppliers to UK energy, Ensek, to install
a digital billing system for our business customers.
100% of our business customers are now on the
Ensek platform, enabling more self-service and
improving efficiency.

•

We have now navigated through some
short-term migration issues, contributing to
record cash collections in recent months.

Digital services

Our customer service platforms form one of the
building blocks of a digitised business. Others include:

•

The appointment of our new Chief
Executive Officer, Nigel Pocklington, who
joins from Moneysupermarket Group with
a wealth of experience in digital-led,
customer-centric businesses.

Our controlling stake in the UK’s leading electric
transport app, Zap-Map, which has over 340,000
registered users and over 95% of the UK’s public
charging points on its network. Over 70% of the
UK’s EV drivers have downloaded Zap-Map.

Our existing 180,000 energy services customers
for whom we provide Feed-in Tariff administration.

Our smart meter roll-out is on track with
over 22,000 installed in 2021 and 30,000
total installations to date.

We are turning sustainability into an engaging
digital experience by evolving our digital offering to
introduce new customer touch points and cross-sell
opportunities. These improved digital tools will lower
our cost to serve and provide a more streamlined
experience for customers.

Good Energy Annual Report 2021

The wide uptake of hybrid working
provides an opportunity for firms to support
employees with sustainability at home. Our
focus on business begins to shift from a pure
business energy supplier to a hybrid services
provider of both business and domestic
customer offerings.

Our own carbon emissions report can be found on
pages 66 to 67.

In late 2021 we released an automated Feed-in Tariff
(FiT) meter reading tool. In Q4 2021, we reduced the
number of FiT meter reading submissions requiring
manual validation by 50%. This improves both the
customer experience, as well as the time required to
serve them effectively.

We continue to roll out improvements across our
app, portal and customer journey. Alongside these
digital improvements will be an increasing number
of collaborative referral partners, driving cross-sell
opportunities for our more engaged customers.

Energy trading

Our in-house trading capabilities separate us from
other energy suppliers.

We have a history of implementing a

robust hedging policy, which became

one of the media buzzwords of 2021.

These trading capabilities have been increasingly
important in a volatile energy market. We remain
well hedged for summer 2022 and plan to
incrementally increase hedging for winter 2022.

In October 2021, we partnered with Barrow Green
Gas (Barrow) for shipping services. The agreement
builds on our longstanding relationship with Barrow
and ensured we could continue supplying gas
following the market exit of CNG. Our experience in
trading renewable electricity alongside our existing
counterparty relationships means we are well placed
to become our own gas shipper, and Barrow is an
ideal partner for that journey.

Our Kraken and Ensek platforms will enable
further trading optimisation as we continue
to develop energy services, with focus areas
including half-hourly settlement, more agile smart
tariffs and accessing revenue streams from the
flexibility markets.

Renewables at a tipping point

Recent events have heightened awareness of the
need for UK-based renewable energy. Not only
to meet net zero targets, but also for increased
energy security.

Businesses face a continued challenge from
investors, customers and employees in the ambition
to achieve zero carbon. Based on understanding
our own business, we are developing a blueprint to
help businesses with this transition. Not just through
the supply of 100% renewable electricity, but in
being able to understand the impact across their
entire organisation.

Enabling businesses to understand not just their direct
scope 1 emissions, but their wider scope 2 and 3
emissions will be increasingly important to improving
sustainability. A role that we are well suited to help
businesses with.

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Decentralised energy

Services to generate, store, consume and share your
own power.

Services

Smart export payments

We will help people optimise their energy and be as
efficient as possible. We make it simple to generate,
share, store, use and travel by clean power.

Alongside our own products, we will use referrals to
expert partners to build a network of services which
will increase the length of our relationship with our
customers. We have a committed and motivated
green customer base and increasingly see this
business as a referral engine for further products and
services for the right customers. For example, almost
half of our existing FiT customers were referred by
solar installers.

We are actively investing in services and businesses
that can accelerate our offering.

Feed in tariff

We are one of the UK’s leading FiT providers.
As of December 2021, 65% of our meter points
were Feed-in Tariff customers.

We have a 93% satisfaction rating,

with customers overwhelmingly

positive about their experience.

We believe that this presents several opportunities
in similar markets.

We see several cross-sell opportunities to existing
and new customers. Currently, only 7% of FiT
customers are also domestic supply customers,
whilst a quarter are unaware of our supply option or
believe switching would be a hassle. We are investing
in propositions to provide additional value for this
customer base, including smart export and referral
partner offers in EV charging, battery storage and
heat pumps.

Despite the FiT scheme being closed to new entrants,
the UK rooftop solar sector is booming, with solar PV
capacity increasing by 36% in 2021 to 730MW.

Installing solar provides clean, affordable electricity
that reduces dependency on fossil fuels, as well as
protecting against wholesale price volatility. There is
a clear opportunity to tie renewable supply alongside
solar generation, EV charging and battery storage.

We have continued to develop new offerings for
solar customers.

Our smart export solution will

pay users for what they export as

opposed to deemed rates.

The more customers export, the more they will
get paid, and we can reward customers for making
the grid greener.

In line with our proven FiT administration capabilities,
our platform makes it easier to claim from Ofgem.
As we make a fee for each MWh our customer’s
export, smart export will help to build longer,
recurring revenue streams.

Partners

We are building a strong network of partners and
plan to use referrals to provide new green services.
In these new markets we need to be fast, flexible
and responsive whilst focusing on partnerships that
will elevate our core offering and that meet the
needs of current and future customers.

Initial results from our partnership with Caplor
Energy are extremely positive, illustrating that
there is demand for solar, electric vehicle
and battery storage. Our role is to use this
to create a referral engine and establish
long-lasting relationships with customers
who engage with an increasing number
of products and services. These will allow us
to deliver value-add solutions for customers,
whilst we share the benefit through recurring
revenue streams.

Read more about our partners on page 57.

Good Energy Annual Report 2021

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Strategic Report

Mobility

We aim to make it easier to own, drive, fuel and pay for
an electric vehicle.

We have solutions for all areas an electric vehicle
(EV) driver needs. We will continue to invest in
software and services and build partnerships to
provide hardware. A full electric mobility service
must cover the following areas:

Energy supply – provide time of
use tariffs and automated solutions
to meet increased customer
electricity demand with 100%
renewable electricity.

Services – Zap-Map provide leading
services for consumer and fleet EV
users, helping drivers search, plan
and pay for EV charging.

Charging infrastructure – partner
with providers of home and public EV
charging hardware, and help remove
barriers for paying for EV charging.

Electric vehicles – as EV adoption
increases, partner with manufacturers,
car leasing and subscription providers
to increase awareness of green
energy services for EV.

We are building partnerships throughout this
ecosystem. Our focus is on energy supply and
services, whilst partners will provide more capital-
intensive solutions to infrastructure and access to
electric vehicles.

In 2021 we released our EV tariff, Green Driver.
We also trialled innovative time of use tariffs that
included periods of free electricity. Customer
feedback was clear: longer off-peak windows were
preferable, and we are still early in the journey of
optimising automation for more complex tariffs.

Time of use tariffs demonstrated that customers
shifted 43% of load when incentivised with lower
off-peak rates. More automated solutions will allow
for an even greater amount of load to be shifted off
peak, benefiting not just the consumer but easing
demand on the grid. We are working on developing
these automated solutions, alongside ways for users
to be rewarded for shifting this load.

EVs are likely to be the catalyst for further
decentralised energy solutions alongside solar
generation and battery storage. The opportunity
to optimise generation, consumption and export
is significant in both green and financial terms for
consumers and energy suppliers.

Zap-Map

Zap-Map had a strong 2021

performance, developing core

products and proving consumer

demand. Our focus for this business

in 2022 is scaling up to capitalise on

their market leading opportunity.

We intend to participate in the current funding
round being undertaken by Zap-Map and we
remain in advanced discussions with a number of
strategic partners. Our expectation is that this will
complete in early Q2 2022.

Zap-Map’s current funding round will allow it
to embark on its next course of commercial
and development goals, which will crystallise
its leading position for its market services
in the UK and initiate steps of international
expansion to selected territories.

The EV market is experiencing a seismic shift with
record demand. EVs are expected to grow from
10% of new car sales in 2020 to 100% by 2030. This
would represent over 27% of the total UK car parc.
Throughout this period, we expect a 92% compound
annual growth rate (CAGR), with 47% growth
expected until 2026.

With over 660,000 downloads and hundreds of
thousands of users each month, the Zap-Map app
helps EV drivers search for public charge points,
plan journeys and pay for EV charging across
multiple networks.

In the past twelve months Zap-Map has launched
its Zap-Map Plus and Premium subscription services,
including support for Apple CarPlay and Android
Auto. Its leading payment service, Zap-Pay, now has
nine public charging networks signed up with Osprey,
ESB and char.gy live and new launches including
MFG EV Power and GeniePoint coming shortly. It also
announced a commercial partnership with worldwide
leader in business payments Fleetcor for integration in
its Allstar fleet payment platform.

Zap-Map currently has over 350,000 registered users,
and over 95% of the UK’s public points on its network.
Over 75% of UK EV drivers have downloaded Zap-
Map, with growth in Zap-Map downloads more than
keeping pace with the rapid growth in the EV market.

Good Energy Annual Report 2021

Growth in users has tracked the growth of the wider
electric vehicle market with user numbers up 125%
vs December 2020.

Engagement is one of the key metrics for growth.
Zap-Map has historically had an early adopter,
highly engaged user base. Over 50% of users are
monthly active users, a leading indicator of repeat
usage. There are over 20k chats per month, 15k
monthly routes planned and over 2.5k cross platform
users. The breadth and depth of the data available
to EV drivers is what defines Zap-Map as the market
leader in this category.

In March 2022, Richard Bourne was appointed as
permanent CEO after having joined Zap-Map as
interim CEO in January 2021. Following a successful
year for the company, Bourne’s permanent role will
see him lead the execution of Zap-Map’s overarching
strategy to make charging simple for the next 10
million EV drivers, including developing its core
products as well as expanding internationally.

In addition, Nigel Pocklington has been appointed
Chair of Zap-Map. Nigel bolsters the Board’s
expertise in building successful online platform
businesses, together he and independent
Non-Executive Director Tim Jones have
experience from leadership roles at AutoTrader,
Moneysupermarket.com Group and Hotels.com.

EV driver products

Zap-Map is a digital platform which enables
revenue streams from both consumers and businesses.
With the app as a core offering, they have developed
products across consumer, fleet and business
segments that leverage their position at the centre of
the EV charging market.

Subscriptions

Recurring revenue streams can come from
solving the specific needs of each EV driver
segment. The core products of the Zap-Map
app remain free but operating a ‘freemium’
model, which provides value-add services to
frequent users of the public charging network.

For consumers, the freemium model offers
drivers additional features to simplify the driving
experience. Zap-Map Plus has smarter search with
enhanced filters and save options, while Zap-Map
Premium adds in-car integration with Apple
Car-Play and Android Auto.

Since its launch in July 2021, subscriptions have
been growing and have seen good levels of
initial conversion, particularly with new drivers.
The ambition is to have 10% of the userbase as
paid subscribers by 2026, which is supported
by the experience of other consumer facing
freemium models.

For fleet offerings, Zap-Map are launching a
co-branded free fleet payment app alongside

Allstar business solutions (Fleetcor UK) in Q1 2022.
Zap-Map Pro will add to the premium feature set with
enhanced route planning and fleet dashboard and
reporting functionality.

Zap-Pay

Zap-Pay offers simple access to multiple charging
networks through one simple payment method.
For EV drivers, this provides cross-network in app
payment, removing the complexity of the fragmented
UK charging network. User benefits include payment
through the app, real time charging updates and full
payments history.

To date, there are three networks live on Zap-Pay,
with nine due live by the end of April 2022. Currently
this provides a c. 15% coverage of the total UK
charging network, with 25% coverage of ultra / rapid
chargers. Good progress is being made signing up
new charge point operators, with an ambition to
scale this up significantly by the end of 2022. Use of
the Zap-Pay network continues to grow and provides
increased insights into driver behaviour.

Incentives for charge point operators to join Zap-Pay
include promoting their network to the Zap-Map user
base, which is a low-cost alternative to contactless.
There is a clear standards-based integration, control
of pricing and terms and conditions, as well as
monthly driver behaviour insights which contactless
payment is unable to provide. This data allows
charge point operators to better understand their
customer base and refine services.

Zap-Pay fleet solution

For fleet drivers, Zap-Map have partnered with
the UK’s number one fuel card service provider,
Allstar (Fleetcor UK). This co-branded app allows
drivers to search and pay for charging across
multiple charge point operator networks. It delivers
aggregated monthly billing to fleet managers, with
no driver expense management, simplifying the user
experience and removing barriers to fleet adoption
of electric vehicles. Allstar will also be reselling the
Zap-Map Pro subscriptions to provide enhanced
fleet-oriented services to drivers.

Data and insights

As a result of their market leading position with
95% of charge point data and over 70% of EV
drivers registered on the app, Zap-Map has access
to unparalleled data from across the EV ecosystem.

Taking inputs from charge point profiles, usage
and driver demographics and behaviour, they
are able to deliver valuable outputs such as data
licensing, reports and benchmarking and plans
for a self-serve portal.

To date this has been monetised through insight
reports provided to a diverse range of partners
and customers. Future plans include the ability
to automate the delivery of these data services.

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Strategic Report

Engaging with our stakeholders

Section 172 of the Companies Act 2006 requires Directors to act in good faith and in a way that is most
likely to promote the success of the Company for the benefit of its shareholders as a whole and, in doing so,
have regard to:

• The likely consequences of any decision in the long term;

• The interests of the Company’s employees;

• The need to foster the Company’s business relationships with suppliers, customers and others;

• The impact of the Company’s operations on the community and the environment;

• The desirability of the Company maintaining a reputation for high standards of business conduct; and

• The need to act fairly between members of the Company.

The Board of Directors consider that they have acted in a way that is in good faith and is likely to promote
the success of Good Energy Group PLC for the benefit of its members (having regard to the stakeholders
and matters set out in Section 172 (1) (a-f) of the Companies Act 2006).

Our approach

The Board recognises its primary legal responsibility to promote the success of the Company for the benefit
of its members, 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.

This section describes how the Directors have discharged their duties to promote the success of the Company
under section 172 of the Companies Act 2006.

Stakeholder and shareholder engagement

Stakeholders

The Board actively engages with the Company’s shareholder base, from its individual customer
shareholders right up to the institutional investors. Communications include investor newsletters
covering recent activities; market announcements on key business developments; and invitations to
presentations with opportunities for shareholder questions and real-time responses.

The effectiveness of this engagement is demonstrated by a large long-standing loyal shareholder
base and the continued support shown following the Board’s recommendations on matters presented
for shareholder vote over the reporting year.

Bondholders

The Board actively engages with the Company’s bondholders via its bi-annual interest letters and the
Group website.

The Board’s interaction with bondholders was an area of additional focus in 2021. The Board wanted
to ensure that the partial bond repayment made was communicated through clear and regular
updates. This process resulted in increased inbound contact for the Company and the Board ensured
that queries raised by bondholders were responded to promptly.

Employee engagement

We are proud of the work we do to keep Good Energy employees well-informed and engaged.
Our internal channels deliver monthly interactive company-wide briefings and weekly CEO update
vlogs from Nigel Pocklington, in which he shares his experience of the week and looks ahead. We
continuously strive to improve further, with efforts spearheaded by our team of employee champions
and regular surveys such as ‘Best Companies’, which provide valuable feedback on what’s working
well and opportunities for improvement.

Our success has been demonstrated by Good Energy being named one of the South West’s 50
Best Companies to Work For 2021 and the 5th Best Utility To Work For 2021. We have also seen
vast improvements in the Employee Net Promotor Score (ENPS) score, which at March 2022 is +26,
compared with -23 the last time we measured in January 2020. Internal surveys highlighted that
employees valued being consulted on our new office design. We also continue to check-in with our
employees on how the new hybrid working environment is working.

Good Energy Annual Report 2021

Customers

Good Energy updates customers on our activities via regular newsletters, digital communications
and published content including blogs and press releases on the Company’s website and social
media channels. Hearing what our customers expect from Good Energy through thematically
assessing 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 remains important to the
Company. We have also improved the service for our business customers with new digital platforms.

The Company’s rating on Trustpilot increased from ‘Great’ to ‘Excellent’ in 2021 and is in a large part
down to our Clean Energy Specialists, who work hard to answer all our customers’ questions and help
them look after their energy accounts. Additionally, we were named an Eco Provider for energy by
Which? magazine, giving consumers confidence in our green credentials.

Delivery Partners and Suppliers

Good Energy operates a tailored approach to supplier engagement where individual functional
leaders are responsible for the providers within their area of expertise. Our Procurement Policy and
Good Procurement Guide set out the principles employees should employ to ensure they spend the
Company’s money wisely and ethically.

Support is provided by a central procurement team which has been strengthened during 2021 with
additional resource for the management of strategic suppliers. Improvements have been made
in how we monitor and manage supplier performance, and this has enabled us to develop closer
relationships with key providers.

Investment has also been made during 2021 to grow our capability for monitoring our supply chains
sustainability performance. We can now in a systematic way begin to understand whether the
providers we work with are able to meet the level of ethical and social responsibility we expect of
ourselves and where necessary engage with them to encourage improvements.

Policy makers and regulators

The Company maintains a constructive dialogue with policy-makers on matters relevant to its
strategy and current operations. We regularly engage with the energy regulator, Ofgem, both
directly and through public consultations and industry forums. We also work with thinktanks and
consumer groups who hold positions of policy influence in the energy sector, targeting industry
groups aligned to Good Energy’s purpose, values and strategy.

In 2021, Good Energy teamed up with Scottish Power to urge the Government and Ofgem to close
‘greenwashing’ loopholes. Our ‘Renewable Nation’ report was published in collaboration with Energy
Systems Catapult, and demonstrates how renewable energy offers the cheapest and cleanest option
to deliver net zero by 2050. Findings were presented at an event held during COP26 in Glasgow.

We have taken an active role in government discussions on proposals to protect consumers in the
short term as well as ensuring a financially resilient market, with a number of the Company’s policy
recommendations being taken up, including in the retail market and for key renewable support
schemes. Throughout the year, we continued to champion small-scale renewable generators,
including during Ofgem’s network charging reforms and in conversations with HM Treasury on
business rates for renewable generators.

The outcome on decision making by the Board and management team considering Section 172
has resulted in actions including further assessments on stakeholder relationships where appropriate,
actions taken by the Board in relation to the long-term strategic direction and actions to more
closely align with our purpose, values and culture.

Read more about our stakeholders on pages 56 to 61 in the strategic report and 85 in the
Governance report.

Read more about our strategic direction on pages 18 to 20.

Read more about our purpose, values and culture on pages 48 to 51.

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Strategic Report

The business model

Energy services: where we will play

Our purpose is powering the choice of a cleaner, greener world. Our business model drives delivery of our
strategy and creates long-term value for all our stakeholders, and we exist to give our customers the ability to
generate their own power, not just buy ours. The building blocks are in place and our strategy is clear for the
growing market in decentralized, digitised clean energy and transport.

Fair

ble supply

a
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P u r p o se & brand

To support one million
homes and businesses
cut carbon from their
energy and transport
use by 2025

Platfor m

Mobili t y

D eter mined

26
26

Good Energy Annual Report 2021

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Purpose & brand

Powering a cleaner, greener, world. We have a committed and motivated
green customer base and increasingly see the business as a referral engine
for further products and services for the right customers

Platform

Successfully embedded new digital customer service platforms.
These investments have delivered consistently high customer satisfaction
ratings and helped bring our prices down.

Renewable supply

Provide fair priced, transparent, 100% renewable electricity.
We exist to give our customers the ability to generate their
own power, not just buy ours.

Decentralised
energy

Help people optimise their energy and be as efficient as possible.
We make it simple to generate, share, store, use and travel by clean power.

Mobility

We aim to make it easier to own, drive, fuel and pay for an electric vehicle.
We have solutions for all areas an EV driver needs.

Our values

Fair, inclusive, determined and straight forward

Our values are embedded throughout Good Energy and 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.

To see our progression on our strategy, see pages 18 to 20.

Strategic Report

Key performance indicators

Good Energy measures its progress with a number of key performance indicators (KPIs) which closely
align with our business.

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

Total customer
relationships (000’s)
Total customer
relationships (000’s)

Churn (%)1

Churn (%)

Cost to serve
(£ per meter)

Cost to serve (£)

Measures
domestic,
business, FiT
supply and
Zap-Map
registered
users

40.1%

600

500

400

300

200

100

Reflects
the rate of
turnover
or loss of
customers

-6.6%

20%

15%

10%

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

100

2020

2021

2020

2021

2020

2021

1.3%

Supply volume

Revenue

Electricity (GWh)

Supply volume (E)

Gas (GWh)

Supply volume (G)

Revenue growth

Measures
the
amount of
electricity
we
supplied to
customers

15%

700

600

500

400

300

200

100

Measures
the amount
of gas we
supplied to
customers

5.2%

600

400

200

Measures
growth in
sales over
the period

11.8%

160

140

120

100

2020

2021

2020

2021

2020

2021

1. Data from November 2021

Good Energy Annual Report 2021Gross margin (%)2

Admin cost (£m)3

Operating margin (%)4

Gross margin

Admin cost (£m)

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

-4.1%

25%

20%

15%

10%

Measures
operational
efficiency by
looking at
administration
cost growth

-2.0%

2020

2021

Measures
profitability as
a proportion of
revenue after
operating costs

Operating margin

10%

2021

2020

-3.6%

-10%

2020

2021

EBITDA

PBT - underlying (£m)2

EBITDA (£m)5

Measures
profitability as
a proportion of
revenue after
operating costs

560%

PBT

3.0

2.0

1.0

0.0

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

-54.6%

2020

2021

Net debt (£m)

Net debt

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

-10

2021

2020

-105.5%

2020

2021

NPS

Carbon avoided (GWh)

Cash & cash
equivalents (£m)

Cash & cash equi.

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

-51.5%

Measures
how likely a
customer is to
recommend
Good Energy

-33%

2020

2021

NPS

Carbon avoided

Carbon avoided
by supplying
100% renewable
electricity and
10% green
gas (vs. using
fossil fuels)

800

600

400

200

14.2%

2020

2021

2020

2021

2. This represents underlying continuing operations performance only. More information about PBT is on page 37.
3. This represents reported administration cost plus discontinued administration cost
4. Operating margin reflects continuing underlying operations
5. This represents reported EBITDA (incl. non-underlying costs) plus discontinued operations

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Operating review

Wholesale energy market conditions

Power prices

Following the impact of Covid-19, the development of power prices in the last 18 months has been significant.
Changes have been especially dramatic in the last 6 months, with average electricity and gas prices 36% and
35% higher in December than November – reaching as high as £500/MWh.

Weather conditions in 2021 impacted volumes, with sustained low wind seen throughout the year.

Sustained low wind in 2021 was up to 33% below seasonal norms. The impact of this was seen clearly with UK
onshore wind output down 25% (Q1-Q3 2021 vs Q1-Q3 2020) despite a 2% increase in installed capacity.

Our revenues are sensitive to changes in the demand for electricity and gas. As markets and businesses have
adapted to cope with Covid-19, we have seen business demand recover materially, with Small and Medium
Enterprises (SME) business supply volumes up 17% and Half Hourly (HH) volumes up 20% in 2021 vs 2020.

Overall supply volumes were up 10%, partly driven by average temperatures which were 1.7 degrees lower
in the first half of 2021 and 0.5 degrees lower across the full year compared to 2020, and partly by Covid-19
recovery. The colder weather meant gas supply volume increased from 486GWh in 2020 to 512GWh in 2021.

Our renewable supply business.

Cash collections

We saw a rise in cash collections in Q4, driven by the Kraken platform and standard variable tariff
(SVT) price rises for both Domestic and SME customers, high supply volumes via new and extended
business contracts and resolving issues with our migration to the Ensek business billing platform.

We expect significantly higher cash collections through 2022 and this is an expectation being fulfilled
in Q1 2022.

There is an increased focus on good quality business partners to ensure future growth comes hand in
hand with good collections performance.

Teething problems with the implementation of Ensek impacted collection during 2021, resulting in lower
Q2 and Q3 collection levels for business customers. In Q4 collections performance improved, and the
collections deficit was substantially recovered.

Business

Total business customers increased by 3%. SME was up 27% and HH up 15%, which helped increase
electricity supply volumes (2021: 640 GWh, 2020: 560 GWh).

Business Feed-in-Tariff customers increased 1.7% to 132.7k, as we continue to maintain our position as
one of the market leaders in FiT administration. Total business supply customers increased by 20.1% to 144k.

Growing business customer numbers has underpinned our strategy in recent years, and this planned tilting
towards business provides us with greater stability through longer term contracts and higher retention levels
compared to domestic supply. Whilst gross margins fall because of this shift, operating margins have the
potential to increase over time due to the lower cost per acquisition and cost to serve these customers.

Domestic

Total domestic customers increased by 0.9% to 133k. Domestic FiT customer numbers increased by 0.5% to
47.4k, whilst domestic supply customers increased by 1.0% to 85.8k.

2021 saw 28 suppliers exit the domestic supply market. This reinforced our stance that a race to the bottom
on price was not a viable long-term business model. We remain committed to having a highly competitive
price for 100% renewable electricity proposition. Elevated energy prices will drive increasing awareness of the
sector. Despite the anticipated squeeze on incomes, demand for green products and renewable electricity
continues, with increased business and consumer awareness. The recognition from Ofgem, Uswitch and
Which? of Good Energy as a genuinely 100% green supplier, proves our credentials in this space.

Good Energy Annual Report 2021
Feed in tariff (FiT)

FiT administration provides the foundation of our energy services model. Despite the scheme closing to new
entrants in March 2019, we continue to administer the scheme for domestic and business customers. Domestic
customers numbers increased 0.5% to 47.4k and business customers increased 1.7% to 132.7k in the period.

In late 2021 we released an automated tool for submitting FiT meter readings, which reduced the number of
meter readings requiring a manual review by 50%. This improves both the customer experience, as well as the
time required to serve these customers effectively.

Generation performance

The generation portfolio consisted of six solar (30.1MW) and two wind sites (17.4MW). The Delabole
site experienced outages following storms at the start of the year together with some delays to parts
being available from Europe as a result of Brexit.

There was sustained low wind in 2021, up to 33% below seasonal norms. The impact of this was seen
clearly with UK onshore wind output down 24% (Q1-Q3 2021 vs Q1-Q3 2020), despite a 2% increase
in installed capacity.

In January 2022 we announced the disposal of the renewable generation asset portfolio (47.5MW) as
part of an ongoing strategic shift to energy and mobility services.

Smart metering

Following delays in 2020 and the first half 2021 due to Covid-19 restrictions, smart meter installations are
progressing well. By 7 January 2022 we had installed 22,00 meters, delivering on our 2021 target. Total installed
meters to date are 30,000 meters.

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Good Energy Annual Report 2021

Principal risks

Risk management approach:

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

The Company has continued to improve upon the risk management framework to provide clear oversight for
identifying, assessing and managing risks and issues both at an operational and strategic level. The potential
impact of internal and external risks to 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.

Our business model

Good Energy Group plc has three principal business areas following the sale of the generation assets: Supply,
Decentralised energy and Mobility.

Our combined Supply and Feed-in Tariff (FiT) administration services serve over 277,000 domestic and
business customers and matches all the electricity used by them with power sourced directly from 100%
renewable sources. Within Supply, we supply services in the low carbon sector as well as our Feed-in Tariff
(FiT) administration services that helps households and businesses meet either all or part of their electricity
demand directly from their own renewable technology. We have power purchase agreements with 1,900
independent UK generators.

In Decentralised energy, we are empowering people to generate their own power by investing in systems to
develop our smart export capability and enhancing digital solutions.

Mobility is the electrification of transport through our investment in Zap-Map, the UK’s leading electric vehicle
(EV) mapping platform to search, plan, pay, share and drive. We are also providing products and services such
as Time of Use tariffs for EV drivers and driving behavioural changes.

Operationally, we keep functions relating to each business area as centralised as possible, such as sales, IT
and marketing. To support this centralised way of working, we invested in two software platforms that allow
us to scale growth efficiently and cross-sell services to different customer types. Both Kraken Technologies and
ENSEK Limited support our processes within the energy supply market and continue to support the roll out of
smart products and services.

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

Our vision to our customers is to be the UK’s most trusted partner helping people in their homes and businesses
to get to net zero. We make it simple to generate, share, store, use and travel by clean energy.

This 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 mature supply business area, we continue to support our operational and financial resilience through
robust continuity planning. The ongoing Covid-19 pandemic and the issues created from the energy wholesale
price increases both provide examples of an exogenous shock we have prepared for. The business is confident
that it has the flexibility and plans in place to mitigate the material impacts of the crisis.

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Strategic Report

Principal risks and uncertainties

Wholesale market and price volatility

This year the wholesale market entered a period of significant and unprecedented price increases,
this period was declared as an Energy Crisis across the industry. Good Energy were in a strong position
entering this period due to a strong tariff hedging strategy.

These changes to the wholesale market have had an impact on the tariffs offered to both our Domestic
and Business customers with a price increase being implemented to the Derogated Standard Variable
Tariff at the end of 2021 calendar year. A smaller selection of Fixed Term tariffs have been available to
customers as a result of the added complexities created by the Energy Crisis impacting on our hedging
processes and strategy.

Throughout the Energy Crisis the Good Energy Trading Team, supported by the Management Team,
have been closely monitoring the situation to ensure visibility of the issue and emerging risks to support
in effective risk-based decisions. Medium to longer term trading strategies are now being discussed to
ensure maintenance of this position.

Regulatory & political risk

The energy industry is constantly changing. Government policy, the push for a low carbon economy,
technology advances and consumer needs all affect the business and industry. Complying with regulatory
changes often introduces un-forecasted costs and additional resource pressures, specifically when the
changes are significant and / or fast-tracked through to implementation.

A significant volume of regulatory change is a risk as it diverts time and resource away from growth
initiatives as well as the risk of not meeting regulatory deadlines. The Company continues to invest in its
regulatory and compliance capability, which enables effective responses to change and reduce risk.

This year there have been a number of regulatory changes creating risk for the Company such as the
progress towards Faster Switching and the introduction of the Retail Energy Code. Whilst these changes
are welcomed by Good Energy, they have created additional expense and resource needs which require
careful balancing with operational activities to avoid unwanted impacts to the financial position.

Similarly, political changes create both perpetual risk and opportunity to all businesses. Good Energy
manage these risks, and exploit the opportunities, through horizon scanning and assessment of new
government policy and wider political change.

The introduction, and withdrawal, of provisions under the Coronavirus Act created the need to adopt a
Hybrid Working model allowing Good Energy employees to flexibly work from either the Head Office or
from home. This working model introduces a variety of risks into the Company ranging from employee
performance to information security. The management team have been closely monitoring the risks
identified through the transitional period to allow for adjustments to working practices as required.

Purpose and Brand

Good Energy was founded in 1999 to enable homes and businesses to be part of a sustainable solution to
climate change. The Company's purpose is key to its proposition, and damage to its brand and reputation
would compromise its competitive position.

To ensure we are being true to our purpose we put the business through a comprehensive Green Audit
in Q1 2021, followed by a Brand Promise Audit in Q2 2021. Both of these reviews confirmed alignment
to our environmental objectives and identified opportunity to further embed these objectives into our
operational activities.

Our community of shareholders, bondholders, generators, customers, and employees are helping create
a cleaner, greener world 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.

Good Energy Annual Report 2021Environmental concerns

Protecting the environment and supporting global efforts to reduce carbon emissions is a long-standing
goal for Good Energy, which is why in 2017 the Company gained certification to the Environmental
Management Standard ISO14001. As part of this certification Good Energy completes regular risk
assessments and puts in place mitigations to environmental risks, which include; pollution to the local river
from the water-side office, a fire causing emissions from the smoke and poor performance of renewable
generators from changes in the weather.

Cyber-security and data protection

Business growth and technological advances mean increased exposure to malicious attacks to information
and the IT estate. As with many businesses, a successful cyber-attack on Good Energy could result in the
Company being unable to operate effectively to serve customers, incurring significant damage to our IT
estate or the loss of critical business and customer data; all resulting in a reputational and financial impact.

To manage this, Good Energy continually assesses its security policies, standards and procedures, adjusting
them so they are proportionate to the threat profile the Company faces. The Company trains all staff
annually on cyber security and potential threats; as well as ensuring there are subject matter experts to
actively monitor risks and technical vulnerabilities using a wide range of tools, including the National Cyber
Security Centre (NCSC), which provides weekly updates on the cyber threat landscape and security
scanning software

Good Energy promotes diligence when it comes to collecting and processing customers’ personal
information. All employees complete data protection training as part of their induction and ongoing
employment to ensure a consistent approach to maintain a high level of personal information security. The
Good Energy Data Protection Officer works collaboratively with all areas of the business to ensure customer
data is not put at risk and that processes remain aligned to best practice in this area.

Covid-19

The national and international response to the COVID-19 pandemic has created unique risks for all
businesses. For Good Energy, those risks can be summarised as cashflow, business continuity, employee
welfare, employee attraction / retention and supplier/customer relationships.

During 2020 the group quickly adapted to remote working, mitigating some operational impacts posed by
COVID-19 and in 2021 introduced a hybrid way of working.

The continuation of challenges driven by COVID-19 require active review and management by the business
to preserve and improve cash and balance sheet strength to counter any potential reductions in revenues/
increases in customer debt resulting from the economic downturn in parallel to the direct impact on staff
sickness and well being.

Financial risk management

Good Energy continues to see financial risks around wholesale trading costs, liquidity and credit as
described in within note 3 in the Notes to the Financial Statements.

We are also aware of risks around fraud, specifically in the administration of the Feed in Tariff scheme; to
manage the risk of fraud and error in this space we have introduced some significant improvements to the
system and processes we utilise

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Strategic Report

Chief Financial Officer’s review

Overview

The Group has had a resilient financial
performance despite significant pressure
from commodity markets and low wind levels,
impacting on the year’s performance.

The first half of 2021 saw significant benefits from
power and gas hedged during 2020. The second
half of 2021 saw rapidly escalating wholesale prices
combined with significant periods of low wind, which
combined to hit margins materially.

Pricing flexibility

Winter 2021/2022 commodity costs are showing
significant variation due to ongoing geopolitical
impacts. However, our ability to raise Standard
Variable tariffs (SVT) through Good Energy’s ongoing
derogation from OFGEM’s price cap gives Good
Energy a natural lever to offset these impacts and
flexibility in such volatile markets.

Following rising wholesale prices in Q4 2021,
benefits from associated price rises will flow
through to working capital in 2022.

Financial performance

Profit and loss

Revenue increased 12% in the period to
£146.0m (2020: £130.6m) driven by growth
in supply volumes (up 10%).

Cost of sales increased by 18% to £119.0m
(2020: £101.1m). This impact is net of the £6m
cost of sale adjustment related to the transfer of
the generation activities to discontinued business.
Excluding this reallocation, cost of sale has increase
by 24% to £126.0m.

Gross profit decreased 9% to £27.0m (2020: £29.6m).
Gross margin decreased to 18.5% (2020: 22.6%).

Administration costs excluding non-underlying
administration costs decreased 5% to £23.8m
(2020: £25.0m). This was primarily driven by a
£0.7m reduction in expected credit loss (ECL)
provision levels compared to the prior year and
smaller other administration cost savings. Total
administration costs decreased 3% to £24.6m.

Net finance costs decreased by 86% to £0.6m
driven by a combination of significant debt
reduction, including the £12m bond repayment
in H1 2021, and the transfer to discontinued
activities of the generation activities.

Underlying profit before tax of £2.6m includes
the impact of the cost of sales adjustment to
the transfer of generation activities. There was
a £5.5m loss from discontinued operations.

“The Group has had a resilient
financial performance despite
significant pressure from
commodity markets and low
wind levels, impacting on the
year’s performance.”

Good Energy Annual Report 2021The underlying loss for the period was £3.2m and the
reported loss for the period was £3.9m (2020: £0.4m).
This reflects the extraordinary market conditions seen
in 2021 alongside the one-off impacts related to sale
of the generation business and defending a hostile
takeover attempt.

the revalued assets is offset by writing off previously
capitalised transaction and financing costs when
the majority of the portfolio was first operationally
financed in 2014.

Finally, non-underlying costs of £0.8m incurred track
to the Company’s reported loss before tax of £4.9m.

Financial bridge 2020 to 2021*

2021 saw growth in supply customer numbers and a
substantial recovery in particularly business electricity
supply volumes post Covid-19. This generated a
£2.4m positive profit impact compared to 2020.

The current energy crisis – affecting everyone from
consumers to suppliers, regulators and government –
means we are experiencing ongoing uncertainty and
have not been immune from the impacts from the
wholesale market.

In November 2021, we highlighted the impact of
incurring additional commodity costs from a higher
number of business and domestic customers than
expected. This was expected to continue into the first
quarter of 2022, at sustained high commodity prices.
We have seen this play out to date. In December
2021, we outlined that the elevated wholesale
prices and record low wind levels would lead to an
adverse impact to our full year results. In aggregate
the negative profit impact through higher costs of
commodity and other industry costs led to a profit
deterioration of £6m compared to the prior year.

Substantially offsetting impacts of a lower ECL
provision and the increased gross Zap-Map loss
leads to a continuing business loss before tax of
£3.3m in 2021.

Intra-group revenue, electricity generated by
the discontinued segment generation assets to the
used within the customer supply segment of £6.0m
is eliminated as usual, however the elimination results
in a lower cost of sale within the continuing business,
leading to an underlying continuing profit before tax
of £2.3m.

This intra-group revenue is then removed from
discontinued segment before the operating
performance of the discontinued generation
segment, realising a loss before tax of £0.8m (profit of
£0.5m less impairment of £1.3m), is added.

This then provides, at a loss of £2.8m, the most
meaningful comparison with the FY20 underlying
profit of £0.5m.

The impairment loss on the generation assets arises
from changes in value of the portfolio between the
sale announcement date and the year end. This
incorporates estimated transaction costs (£1.0m) on
the sale of the portfolio and any change in modelled
value over this period (£0.2m). The gain on the sale of

Cash flow and cash generation

Our business model remains cash generative.
Impacts of a business billing system migration
had a working capital impact within year but has
been materially resolved by the end of Q1 2022.

There was a net decrease in cash of £9.7m,
which includes the repayment of 70% of Good
Energy Bonds II totalling £11.9m. The resulting cash
balance of £8.9m (£6.7m continuing operations,
£2.2m discontinued operations) (2020: £18.3m)
enables continued strategic investments including
participation in the Zap-Map funding round.

Cash at the end of February 2022 was £19.6m
following the sale of the generation asset portfolio.

Funding and debt

Our business is now substantially debt free on a
net basis. In the period, gross debts have reduced by
86.5% compared with year-end 2020. The gearing
ratio decreased to –7% following the sale of the
generation asset portfolio in January 2022.

Substantial progress has been made against reducing
Group finance costs and reducing the gearing ratio.
The remaining Good Energy Bonds II outstanding
(£4.9m) is reported within non-current liabilities. This
is due to an annual redemption request window for
bondholders in December of each year. The next
bond redemption date is 30 June 2022 with £0.2m
due for repayment.

The Group continues to maintain capital
flexibility, balancing operating requirements,
investments for growth and payment of dividends.
Our business remains mindful of the need to capitalise
on strategic business development and investment
opportunities. Prudent balance sheet management
remains a key priority.

Earnings

Reported basic loss per share decreased to
-20.7p (2020: 0.9p). Basic underlying earnings
per share from continuing operations increased
to 17.1p (FY 20: 0.9p).

*A profit bridge slide has been included in the Investor presentation, which is available on the Company’s website.
(https://group.goodenergy.co.uk/home/default.aspx)

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Strategic Report

The final deferred consideration payment has been
agreed as follows:

£4.3m has now been paid, with a further up to £0.5m
to be paid on 30 June 2022, subject to Good Energy
meeting all its payment obligations up to that date for
power supplied by the Portfolio to it under the power
purchase agreements.

The total deferred consideration is therefore agreed
to be up to £4.8m.

Of the £3.3m that will not be received, £2.3m
arose due to the impact of a third-party energy
yield assessment on the agreed financial model
and £1m arose during detailed technical and
financial due diligence.

Total consideration received to date is therefore
£20.7m, with an agreed final total consideration
of up to £21.2m by 30 June 2022.

We are committed to delivering value to
stakeholders and the sale of our generation
portfolio, at a significant premium to book value,
was a good deal. It is also a significant moment for
Good Energy - we are using the capital from our
past to invest in our future.

Further post balance sheet events are detailed
on pages 106 to 107.

Rupert Sanderson

Chief Financial Officer

Dividend

The Board were pleased to restart the dividend
and to announce an interim dividend of 0.75p per
ordinary share for the period to 30 June 2021, as
set out in the Company’s interim results released
on 14 September 2021.

Good Energy continues to operate a scrip
dividend scheme and the payment timetable
of the final dividend will be announced alongside
the notice of the Annual General Meeting in June.

Non-underlying costs

Total non-underlying costs of £0.8m, relating
primarily to corporate defence activities against
a hostile takeover approach within 2021. 2021
non-underlying costs were 69% higher than prior
year (FY2021 £0.5m).

Expected Credit Loss (ECL)

ECL charge decreased 19% in the
period to £3.0m (2020: £3.7m).

The main impacts in year are a faster
collection of commercial debt, being
offset by increased revenue.

Zap-Map investment

2021 saw a P&L loss related to Zap-Map of £(1.0m)
which increased £0.8m from 2020, following a period
of continued investment. This was expected and
related to Zap-Map’s growth plan. At an earnings
level the group retains a £0.5m loss reflecting Good
Energy’s 50.1% stake in Zap-Map.

Events after the balance sheet

On 25 November 2021, the Company appointed
KPMG LLP to lead a sale process for the Company’s
entire 47.5MW generation portfolio.

The Company announced, that following a
competitive process, the disposal of the 47.5MW
generation portfolio was complete with Bluefield
Solar Income Fund (BSIF) on 19 January 2022. Total
consideration of up to £24.5m was comprised of initial
and deferred payments. The initial consideration of
£16.4m, less distributions since the lockbox date of
£0.7m, resulted in £15.7m being paid to the Company
on completion.

Good Energy Annual Report 2021

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Strategic Report

39
39

What we do to
achieve our purpose:
Empowering you
to generate, share,
store, use and travel
by clean power

Good Energy Annual Report 2021

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Strategic Report

Good Future Board

In 2021, following a recruitment process that saw nearly 1000 applicants from schools in England, we
appointed a Good Future Board of six secondary school aged young people. The Board are in place to hold us
to account on our purpose — to protect their futures. Having been in role for a year, this is their joint statement.

We became members of the newly created Good Future Board in a strange year. While everyone
was dealing with the pandemic and lockdowns, we were appointed to help Good Energy stay
committed to its increasingly important purpose of helping tackle climate change.

Over the past 12 months we have learnt a lot, not only about Good Energy’s business, how it helps
people use renewable electricity and the many issues it has dealt with in that time, but about the
energy sector and other environmental issues.

With the exception of Shaina, who unfortunately tested positive for covid just beforehand, we
travelled to Glasgow for Conference of Youth 16 (COY16) ahead of the UN’s COP26 climate
conference. It was inspiring to meet in person for the first time, and meet many other young
climate activists from around the world who share a common goal of protecting our planet.

As a Good Future Board, our focus is always to look forward. In the next year, we hope to get
even more involved in the decisions Good Energy makes, having learnt so much about the business.
We hope to work with other environmental groups and push the government to take more action.
We believe Good Energy can help here as an energy company with a strong voice which has a
good track record in proving that renewable energy works for everyone. This is ever so important
now considering the Ukrainian crisis, which demonstrates how fossil fuels are financing certain
countries with enough money to fund an entire invasion whilst coping with economic sanctions from
the west. So as the UK moves away from Russian oil and gas, we hope it can replace it with clean,
green renewable energy generated locally — not more fossil fuels such as from the North Sea or
even fracking.

We are excited about the future prospects for Zap-Map, and Good Energy’s plans to help more
people generate their own clean electricity so they can meet their external needs.

Part of the reason for the Good Future Board has been to inspire other similar youth boards across
the environmental sector, and it has been brilliant to see that happen at organisations such as DAME.
We want to see more of this because every business should be listening to young people as all of us
will be impacted by the decisions made now.

We hope Good Energy will increase its climate action through more campaigning, lobbying and
social media, all of which will be aided by the Good Future Board.

We also underestimated how influential government policies are not only on an energy company
but the whole market and thus the economy of the UK: inevitably affecting ordinary consumers.
This has only been exasperated by the cost-of-living crisis in the UK and has revealed how
interconnected all these inequalities are. Our hope is for the government to understand and act
on how beneficial renewable energy is so we can utilise it to tackle fuel poverty and other socio-
economic disadvantages.

Climate action has never been more important, and the current energy crisis places a greater
emphasis than ever on the need for clean electricity. We plan to push for more action and stand up
for our future.

The Good Future Board

Ada, Akash, Jack, Kathryn, Mahnoor and Shaina

Good Energy Annual Report 2021

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Good Energy Annual Report 2021

Renewable Nation

Pathways to a Zero Carbon Britain

Good Energy partnered with Energy Systems Catapult to produce a landmark report with new findings on
the need to transition the UK to zero emissions within a generation.

The report took a data led approach to modelling future energy scenarios, specifically looking at how a
pathway powered primarily by renewables could achieve our zero carbon goals as a nation.

We launched it in June 2021 with a virtual panel event featuring the then Energy Minister Rt. Hon Anne-Marie
Trevelyan, alongside Fiona Ball, Director of ‘Bigger Picture’, Sky and Nina Skorupska, CEO, REA.

The key findings are:

The electrification of everything

Across all modelling scenarios is a significantly increased role for electricity across all energy
demand. Mainly due to the necessary electrification of transportation and heat, total electricity
demand doubles on current rates and peak demand quadruples.

People will power the way to net zero

Progress in cutting emissions has avoided the need for serious behavioural chance. The next stages
require everyone to be involved, with a move away from the passive ‘consumer’ of energy, to one
actively engaged in storage, flexibility and generation.

Renewable power dominates the energy system

As the cheapest technologies for power generation in a high volume system, wind and solar will
meet the majority of the UK’s needs. But diversity is also crucial, with support from sources such as
geothermal and marine.

Storage and flexibility are indispensable

Energy storage will become essential in balancing supply and demand in order to ensure
resilience and security of an almost entirely renewable power driven system.

Costs remain competitive

Modelling showed a renewable pathway to a zero carbon Britain can be delivered at a similar
cost to a ‘baseline’, remaining at 0%-1.5% of GDP per year out to 2050.

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COP26

The world’s most major climate conference came to the UK in 2021. The UN’s Conference of Parties 26
(COP26) was hosted in Glasgow, bringing world leaders and key decision makers from across the globe
to our soil. It was a crystallising moment for Good Energy’s purpose. This is how we marked the event.

30 years of wind power

The UK’s first commercial wind farm was built by the Edwards family in Delabole, Cornwall, in 1991.
Good Energy has since sold the site to new owners, but we owned and operated it in 2021, as it
celebrated its 30th anniversary. We took the opportunity to send a message to world leaders about
the importance of climate action, by commissioning artist Luke Jerram to create an experimental
moving light projection. Held the week before COP26, the local community were invited to view the
spectacle that included a projection of the climate stripes — climate scientist Ed Hawkins’ creation to
show yearly global heating in a clear visual. The resulting images were sharing around the world in
press and social media.

Conference of Youth 16

Ahead of every COP for the past 16 years, has been the Conference of Youth (COY16). The pre-
cursor to COP is run by and for young people, a chance for them to network and organise, as well
as to produce a joint statement from young people around the world which outlines their wishes
for the coming COP. It is a crucial event, and Good Energy was proud to be a primary sponsor for
COY16, ensuring a successful event took place in Glasgow in the days before COP26. We hosted our
Good Future Board members at COY16, giving them a stage at the conference to host a live board
meeting and Q&A with the audience.

Renewable Nation

Thursday 4th November was ‘Energy Day’ on the presidency programme of COP26. The UK energy
industry’s trade body Energy UK gave Good Energy the stage to discuss our Renewable Nation report.
In an open plan studio the other side of the Clyde overlooking the entire COP26 conference, our
Founder Juliet Davenport chaired a panel discussion featuring our CEO Nigel Pocklington; Emma
Pinchbeck, CEO of Energy UK; Rachel Fletcher, Director of Regulation and Economics at Octopus
Energy; Lindsay McQuade, CEO of Scottish Power Renewables; and Rachel Ruffle, CEO of RES.

Good Energy Annual Report 2021

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Strategic Report

Our social impact

2021 started under Covid-19 restrictions and ended with the energy industry in turmoil. Throughout these
challenges, we remained committed to supporting the wellbeing of our people, and working in a way that
prioritises Good Energy’s core values:

• Fair • Straightforward • Inclusive • Determined •

There will always be room to improve our performance against each of these values. This section covers
where we are at the moment and what we’re doing to be better.

Gender pay report

Good Energy have voluntarily reported on our gender pay gap since 2017. We are committed to having a
gender balance at all levels of the business, with everyone paid fairly and equally for their contribution.

In 2021, our mean gender pay gap was 19%. This gap is due to there currently being more men than women
at senior leader level, particularly in data, technology, sales and energy trading roles.

Unfortunately, our pay gap is likely to get worse before it gets better. For example, changes to the Board and
Executive team later in 2021, including Founder Juliet Davenport stepping down as CEO and being replaced
by Nigel Pocklington, means there will be fewer women at senior leadership level in our next report.

How we’re closing the gap

We are aware of the historical challenges of
recruiting a gender diverse workforce, especially
in STEM related roles, and believe that attracting
and hiring women in leadership positions in
a largely male-dominated industry is key to
supporting inclusivity.

We have made some progress during 2021. 55%
of our women were promoted in 2021, compared
to 45% of men. We are also proud that our Product
team is 75% female, significantly outperforming the
industry trend of 10%.

In the years ahead, our strategy will include:

•

Developing more women within the business into
‘Head of’ level roles. We expect this to reach up
to 30% in 2022.

Attracting female talent through promoting
inclusive practices such as flexible working,
along with our development opportunities.

Aiming for gender balanced shortlists for roles
and transparent, bias free selection processes.

You can view our full gender pay report at
goodenergy.co.uk/procurement-policy.

Good Energy Annual Report 2021

Diversity and inclusion

To give us a clearer picture of the work we must continue doing to be a more inclusive business, we have
encouraged our people to disclose information relating to ethnicity, gender, nationality, religion/beliefs,
sexual orientation and disability. We aim to clearly communicate with our people that having accurate
data will enable us to further develop our diversity initiatives so that we can create and maintain a
genuinely inclusive workplace.

In 2020 we set up our team of Inclusion Champions,
a working group of people from across Good Energy
who have fed into our diversity and inclusion plan.

Disclosure rates for 2021

This plan focuses on four key areas:

• Attracting and hiring diverse talent;

•

Increasing an inclusive culture by learning
about and celebrating diversity;

• Accountability and good diversity

governance; and

•

Inclusive development opportunities.

In 2021, we focused on improving how we
communicate about diversity and inclusion at Good
Energy, including releasing regular articles on our
intranet written by people across the business, and
ran events such as a virtual Pride march (donating
to LGBTQ+ climate change charity, GiveOut). We rolled out more learning and development opportunities,
which you can read about below. And we also reviewed and refreshed our policies, from flexible working to
parental leave and return to work coaching.

Projects for 2022 include reviewing and improving the accessibility of how we design digital services. We
will also run unconscious bias training to support our talent team to understand and eradicate potential
discrimination in our hiring processes.

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Strategic Report

Learning and development

We want to provide all our people with opportunities to grow their careers within Good Energy. Here are some
of the results of our learning and development programmes:

78%

36%

68%

78% of our people completed
our Signature Skills programme,
which includes modules on
straight-talking (giving meaningful,
constructive feedback) and
performance coaching.

In 2021, 36% of our people took
up our Development Allowance,
which provides £500 per person
per year to use on courses or
training to support their current
or next role.

We launched our Good Career
programme to support people
in their first Good Energy roles
to build commercial awareness
and key skills. 68% of participants
progressed into a new role or
were promoted. 46% of those
promoted were women.

A visit from Michelle Donelan, MP for Chippenham and Minister of State for Higher and
Further Education

As one of the largest employers in our local area, we strive to support young people to develop careers in the
green economy. Michelle Donelan MP visited our offices in November to meet members of our Executive team
as well as graduates who joined Good Energy straight from university and have now progressed into their
second roles within the company.

Good Energy Annual Report 2021

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New ways of working

2021 began with the vast majority of the Good Energy team working remotely. As Covid-19 restrictions
were lifted, we updated our working practices to support a hybrid of office and home working.

Our Culture Champions working group regularly consulted with the whole Good Energy team, feeding
back to the company to develop our plan to support people to return to the office. We moved to a working
pattern featuring anchor days that enable people to reconnect and work together, combined with home
working – providing more flexibility and reducing the time and carbon emissions associated with commuting.

Transforming our office space

We updated our offices to be more spacious and comfortable, with new working areas, informal breakout
spaces and meeting rooms. We are also proud to host an installation by world-renowned artist Luke Jerram.
Gaia reminds everyone coming into the Good Energy offices of our incredible planet that we are working so
hard to protect.

Greener pensions

Many pension funds continue to be invested in companies that have a negative impact on our planet,
including fossil fuel companies and others with unsustainable and unethical supply chains. When people find
out that they are accidental investors in these companies, they’re often shocked – but changing to a greener
option can often seem too complex.

Good Energy are making this simpler for our people by switching our default pension for new employees to
a sustainable fund. We have also provided workshops to support people to switch their existing pension to
new, greener alternatives that weren’t available when we set up our initial default fund.

We also support the Make My Money Matter (MMMM) campaign, which provides people with a
straightforward way to contact their pension provider about investing in sustainable funds. By the end of
2021, MMMM had secured £1 trillion in net zero pension commitments.

Strategic Report

Our environmental impact

100% renewable electricity

Good Energy has always been committed to 100% renewable electricity. From our beginnings, this
has been based on buying power from a community of UK renewable generators, and matching what
they produce to what our customers use.

In addition to this, we bought, developed and operated our own wind and solar farms. Several years
ago, we made a strategic move away from this, but continued to operate several generators.

In 2021, we announced the sale of these generators — two wind farms and six solar farms. The sites were
bought by renewable energy investment specialists, Bluefield Partners LLP. The 47.5MW generation portfolio
provides 15% of our customer power demand, and continues to do so via power purchase agreements.

These sites include Delabole, the UK’s first commercial wind farm, which was built in 1991, bought by
Good Energy in 2002 and then repowered thanks to support from our investors in 2010.

We are proud to have played a part in renewable energy history through developing and operating our
sites. However, our greatest impact on growing renewables has always been, and continues to be, through
the growing community of over 1,900 independent generators we support through power purchase
agreements. This decentralised model is our future.

Sharing our generators’ stories

Our independent generator community has grown to include over 1,900 sites. From
independent businesses and non-profits to local community energy projects, all doing their
bit to make the world a cleaner, greener place. In 2021 we released our ‘Meet the Generators’
digital campaign to share their stories.

Bristol Energy Cooperative

Set up 10 years ago, Bristol Energy Cooperative are a shining example of how renewable electricity
generation can pay back into the community.

Bristol Energy Cooperative’s urban solar sites generate enough electricity to supply 3,000 homes,
and were built thanks to investment from the communities that they serve. By selling the electricity
to Good Energy, the Cooperative have been able to channel over £250,000 back into the local area,
by funding initiatives such as community centres, outdoor spaces and cafés.

“The energy transformation needs to come from everywhere, so the nice

thing about Good Energy is that they do work with lots of very local energy

suppliers like us.”

Andy O’Brien, Bristol Energy Cooperative Co-founder and Director

Good Energy Annual Report 2021

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The Confetti Farm

The Wyke Estate in Worcestershire has been in Charles Hudson’s family for over 250 years. His ambition was
to turn it into a “living pastoral environment”, which now includes flower fields for the natural confetti company
run from the estate, and a hydro electricity generator on the river.

Charles has found that developing the hydro generator has supported the biodiversity of his land. A quieter
stretch of water separated from the main river has attracted rarer wildfowl and even otters. The plant
generates over 220 kWh of electricity a year, which supplies local buildings, as well as forming part of Good
Energy’s generator community.

“We’ve been with Good Energy since the beginning… to have someone who

is taking the initiative and linking us with the customer; it gives one a feeling

of strength that together, we are going to build a sustainable future.”

Charles Hudson, Hydroelectricity Generator

You can find all our generator stories at goodenergy.co.uk/learn/generator-stories.

Strategic Report

Green gas

2021 marked our fifth year of offering carbon neutral green gas, and one year since we increased the
proportion of renewable biogas we supply from 6% to 10%. Biogas, or biomethane, is gas that’s generated
by breaking down organic materials in an anaerobic digester. The biogas is captured and fed into the gas
grid, where it can be used in the same way as fossil fuel gas.

10% represents the maximum percentage of the UK’s total gas demand that can currently be supplied
from sustainable, UK-generated biomethane, according to research by the Anaerobic Digestion and
Bioresources Association.

Our Gold Standard offsetting projects

To make our gas carbon neutral, we offset emissions by investing in projects operated by Climate Care.
While offsetting is not the final answer to decarbonising, we are supporting projects that are improving
access to green energy worldwide, and so are part of the transition to renewable energy.

Xuyong Biogas helps communities in Sichuan, one of China’s poorest provinces, by installing household biogas
digesters and providing training on maintaining them. Farmers can use animal waste to generate clean fuel,
reducing the need for coal.

India Biogas works with rural districts to install household biogas digesters that can turn cattle dung into
green gas for cooking. Benefits include improving health by reducing indoor air pollution from using solid
fuel. The digestate produced by the biogas generation process can also be used as fertiliser.

Wenchang Household Biogas, supports farmers to build and maintain a household biogas digester, giving them
long-term access to renewable, clean fuel for cooking and heating. Families reduce fuel expenditure by 40%,
whilst improving sanitation for them and their livestock.

Grid-scale biogas, Turkey works with one of Turkey’s largest dairy companies to use waste from a
production plant and its surrounding farms to create biogas for electricity generation. This grid-scale
generator is expected to produce over 14.9GWh annually. That’s equivalent to the power demand of
4,500 typical UK homes.

Good Energy Annual Report 2021

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Strategic Report

Combating greenwash

Good Energy has been vocal for years about the issue of transparency around green tariffs. Due to a
regulatory loophole, it has been possible for energy suppliers to market tariffs as ‘100% renewable’ without
actually generating or buying any renewable power. In fact, the majority of these suppliers buy electricity
on the wholesale market, a mix of all sources, and greenwash it by acquiring certificates separately.

We view this as a consumer mis-selling scandal that must be addressed, as more and more customers
are looking to play a part in tackling climate change.

2021 was a significant year for progress on this matter, with the following key events.

CMA on green claims

Government consultation

The Competition and Markets Authority (CMA)
announced in September 2020 that it would
investigate the wider impact of green claims on
consumer choices. In May 2021 it published new
proposed guidance on environmental claims,
including examples for energy supply.

In August 2021 the Government’s Department for
Business, Energy & Industrial Strategy opened its
consultation on green tariffs, announcing it will
“tighten rules to stop ‘greenwashing’ of electricity
tariffs”. Good Energy responded to this consultation
and is awaiting the next stage of policy-making.

All our energy tariffs are Gold accredited

Uswitch Green Tariff Accreditation

Which? Eco Provider

In April, the UK’s leading comparison and
switching site, Uswitch, launched its new green
tariff accreditation scheme, designed to provide
much needed transparency to customers. Renewable
tariffs were graded Bronze, Silver and Gold based
on an assessment by an independent panel of
experts. Good Energy was the only energy supplier
to be awarded Gold Standard for all of its tariffs,
electricity and gas.

Having published one of the first in-depth analyses
of the credibility of green tariffs in 2019, non-profit
consumer protection organisation Which? revisited
its research and launched its new Which? Eco
Provider accreditation scheme in October 2021.
Good Energy was scored highest of all suppliers
rated, and was awarded the new Which? Eco
Provider status.

Good Energy Annual Report 2021

Innovating to achieve net zero

We have partnered with green energy and clean technology companies that can provide services to help
people be even greener.

Zap-Map

We are investors in Zap-Map, the leading app for EV drivers in Britain that enables
people to search, plan and pay for charging on the go.

Caplor Energy

This family-run business specialise in supporting homes and businesses to install
clean technology, including solar panels, battery storage and heat pumps.

Hometree

Hometree provide boiler, heating and home care plans that help people make sure
their boiler is running as efficiently as possible.

Crystal EV Charging

Charge points make EV charging faster, safer and easier. Crystal is dedicated to
supporting the transition to electrified transport, with a large network of engineers
trained to install household charge points.

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Engaging with our community

Partners for change

Forming partnerships with like-minded organisations helps us further our purpose by reaching new audiences

BAFTA Albert

We have strong links with BAFTA (British Academy of Film and Television Arts) and its sustainability consortium,
albert. We are the current supplier for albert’s Creative Energy Project, which makes it easier and more cost
effective for film and TV companies to switch to 100% renewable electricity. A total of 258 creative businesses
have joined Good Energy through the scheme since it started in 2019.

“Together we aim to make clean renewable energy easier and more

accessible than ever before helping you reduce your environmental impact

for all film and TV production.”

Kevin Price, Chair of the BAFTA albert Consortium

Julie’s Bicycle

Sustainability charity Julie’s Bicycle supports creative arts and heritage organisations to reduce their
environmental impact. With their help, we expanded the Creative Energy Project to reach even more
businesses. Over the past few years, we have also worked with the charity on their Creative Green Awards,
which recognises the achievements of arts organisations taking action against the climate crisis.

“Clean, renewable energy is the simplest of the many solutions to climate

change and Good Energy have been pioneering this solution for many years.”

Alison Tickell, CEO and Founder

Friends of the Earth

We have been working with Friends of the Earth for over a decade. As one of the UK’s most well-known
environmental organisations, their support is invaluable in promoting our purpose. We remain one of only
two energy suppliers the charity recommends to its large number of supporters.

“We’re deeply concerned about climate change and its impacts on the planet

and people. But by working with Good Energy to move Britain away from

imported fossil fuels and towards green energy generated locally, we’re helping

to reduce one of its greatest causes.”

Guy Shrubsole, Climate & Energy Campaigner

We also work with these businesses and organisations to promote sustainability and fight climate change:

Good Energy Annual Report 2021

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Strategic Report

Customer case studies

Supplying sustainable businesses: Finisterre

Having powered Finisterre’s St Agnes HQ since 2005, Good Energy are now working with the sustainable
clothing brand to switch more of their stores to 100% renewable electricity as part of their target of being
carbon neutral by 2030.

Finisterre prioritises planet and people in everything they design, including rethinking wetsuits so that they are
easier to recycle. After completing a full climate impact assessment, the company is working on a roadmap to
cut their emissions – including scope 3 emissions resulting from their supply chain.

“Having our stores and offices powered by renewable energy not only reduces

our own carbon footprint, it also means we can be an example to our supply

chain and our customers, with the metrics to prove it makes a difference.”

Adele, Positive Impact Manager

Feed-in Tariff support: Ecovision Asset Management

Smaller-scale generators signed up to the Feed-in Tariff (FiT) scheme are playing a vital role in making
our electricity grid greener. Ecovision Asset Management operate 12,000 solar PV sites across Britain, with
Good Energy providing FiT administration for 5,000 of them.

Every quarter, failed meter readings meant Ecovision were missing out on some of their FiT payment.
Good Energy’s FiT account management team worked with them to fix the issue – reducing failed readings
by 70% and saving the business up to £500,000 in lost earnings a year.

“We have always found Good Energy to be professional, effective and willing

to help. Our account manager is a superhero!”

Ecovision Asset Management Ltd

Good Energy Annual Report 2021

Communicating with customers and investors

We want to make it as simple as possible for people to support renewables. Whether that’s switching to us,
managing your account, learning more about green energy and clean technology or staying up to date with
company and investor news.

A simpler, greener website

We developed a new website for domestic customers to make it easier to engage with Good Energy and cut
our digital carbon footprint. Launched in December 2021, our new website is powered by 100% renewable
electricity. Each page includes a carbon calculation – for example, our homepage is greener than 77% of
webpages tested.

Energy crisis communications

As energy prices continued to rise and an increasing number of suppliers left the market, we worked hard to
keep customers informed about the latest news. We sent a direct update on Good Energy’s stable position
from our CEO Nigel Pocklington to all customers and investors, and published regular articles explaining why
prices across the energy market were rising.

Awards for our Investor Relations team

Our Investor Relations team closed the year with
two award wins. Hot on the heels of a win for
‘Best ESG investment of the year’ at the Shares
Magazine awards came a recognition for ‘Best IR
Communications and Engagement Programme’ at
the Investor Relations Society best practice awards

More information about how we communicate with
our customers and investors is available in our section
172 statement on pages 24 to 25.

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Carbon Reporting

Reducing Good Energy’s emissions

Good Energy exists to enable people to fight the climate crisis by switching to green energy. However, running
our business results in carbon emissions of our own. To reduce our emissions as much as possible, we voluntarily
take part in emission reporting schemes such as Science Based Targets. In this section we explain the baseline
and targets we’ve set and how we’re doing with achieving them.

2021 carbon report

Our greenhouse gas emissions for 2021 are shown in the infographic on the next page.

We have compared our overall emissions and emissions from gas and electricity usage in our office with 2019
rather than 2020. 2020 was a very unusual year in terms of our business operations, and our reporting didn’t
fully take into account emissions resulting from home working. Our reporting for 2021 records emissions from
home and office-based working, so comparing our emissions against 2019’s figures provides a more realistic
view of our progress.

Full details of our 2021 carbon emissions figures, separated into Scope 1 (emissions from gas and refrigerants),
Scope 2 (electricity consumption) and Scope 3 (emissions from indirect activities including travel and our
supply chain), are available on pages 66-67.

Key achievements from the past year include:

• Switching to a hybrid working model has decreased commuting emissions by 48.5%.

•

Moving to a smaller office, and switching to a renewable gas tariff has enabled us to reduce our Scope 1
emissions to almost 0 tCO2e.

Upgrading our customer billing systems to digital first platforms has reduced emissions from our paper
consumption from 16.1 tonnes of carbon emissions to 3 tonnes.

Good Energy Annual Report 2021

Carbon emissions

Office energy (electricity & gas)

2019

373.5

2021

158.6

2019

1 Floor M. Park
915m2

= 190.7
tCO2e

M. Reach
1,458m2

80.4kg CO2e per m2

2021

2 Floors
M. Park
1830m2

(2 months at
M. Reach)
1,458m2

= 134
tCO2e

100

150

200

250

300

350

400

Total emissions (tCO2e*)

Monkton Park alone = 128 tCO2e
or 70kg CO2e per m2

With green gas and green
electricity tariffs that equals
just 42 tCO2e

Most emissions in
2021 came from:

(tCO2e)

Gas - 41.96

Home work heating - 62.06

Commuting - 31.36

2021
carbon
emissions

Carbon emissions
breakdown:

(tCO2e)

Water - 0.57

Gas - 41.96

Electricity - 0

Refrigerants - 0.19

Business travel - 2.71

Commuting - 31.36

Home work heating - 62.06

Equipment - 5.64

Waste - 0.3

Paper - 3.01

Fruit and milk - 1.10

Grid Loss - 9.78

Commuting

tCO2e

537

427

257

2017

2018

2019

2020

2021

600

500

400

300

200

100

Total travelled in km

2017

2018

2019

2020

2021

452k

269k

3.77m

2.57m

2.34m

500k

1.5m

2.5m

3.5m

Waste

tCO2e

Business travel

tCO2e

1.5

2.5

0.3

12.5

6.4

2.7

2019

2020

2021

2019

2020

2021

As a result of clearing
furniture ahead of the
office move

Total travelled in km

2019

2020

2021

30k

52k

103k

Percentage of public transport taken

Recycled

Percentage of public transport taken

29%

37%

45%

50%

40%

52%

33%

39%

40%

57%

2017

2018

2019

2020

2021

Launched Green Travel Allowance

2019

2020

2021

2019

2020

2021

*tCO2e = Tonnes of carbon dioxide equivalent

Strategic Report

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Science Based Targets

Science Based Targets provide companies with a clearly-defined path to reduce greenhouse gas
emissions, helping prevent the worst impacts of climate change and future-proof business growth.
More than 2,000 businesses around the world are already voluntarily working with the Science-Based
Targets initiative - and we’re proud to be one of those organisations.

Targets are considered ‘science-based’ if they are in-line with what the latest climate science deems
necessary to meet the goals of the Paris Agreement – limiting global warming to well below 2°C above
pre-industrial levels and pursuing efforts to limit warming to 1.5°C.

Our chosen target

We’ve chosen to commit to the more ambitious target of a 50% reduction across all scopes by 2030 (from
a 2018 base year). We have already managed to reduce our emissions by at least 30% just from moving
to a smaller office space. However, now we are including home working and supply chain emissions in our
carbon reporting, we need to find a way to manage this and ensure our emissions don’t increase.

What can we do to reduce our emissions further?

• Continue with our hybrid working model: hybrid working is 20% better in terms of emissions

than full-time office working.

• Review our supply chain and source more net-zero suppliers.

•

Continue to encourage green travel when commuting, incentivised by our Green allowance
of £250 per year.

• Switch to monthly carbon reporting rather than annual, so we can track our emissions

more closely.

•

Continue to power our office with renewable energy. There is a potential for a biomass boiler
to be installed at Monkton Park in the future – which would reduce our emissions even further.

Good Energy Annual Report 2021

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Strategic Report

2021 Carbon Emissions summary

Our greenhouse gas emissions for the full year of 2021 are presented
in the table below.

We calculate our emissions using the Greenhouse Gas Protocol Standard, separating them into Scope
1 (emissions from gas and refrigerants), Scope 2 (emissions from electricity consumption) and Scope 3
(emissions from indirect activities including travel and our supply chain). Our inventory is externally verified in
accordance with the ISO 14064 standard, which is the international standard for carbon inventory verification.

Important information about the table values:

The value of each emissions category is given in the ‘value’ column. The evidence is given in the
‘source’ column

•

We have used emission factors from DEFRA to transfer the values of emission sources to the same unit
of tonnes of carbon dioxide emissions (tCO2e)

Carbon Emissions

Category

Unit

Value

Source

tCO₂e

tCO₂

tCH₄

tN₂O

Scope 3

Loc. Based

Market
based

Expense
Reports

Hybrid
Working
Survey

Waste
Records

Procurement
Reports

Hybrid
Working
Survey

Meter
Readings

Business travel

30,176.38

Commuting

269,285.35

Home Work
Heating

MWh

344.69

Home Work
Equipment
(Electricity)

MWh

26.57

Waste

Tonne 14.616

Procurement

Tonne 4.065

Milk

Fruit

Litres

342.765

Tonne 0.209

Electricity
UK grid loss
(homeworking
+ office)

MWh

27.006

Water supply m3

1,350.670

Water
treatment

Scope 3
emissions

Total emissions

2.708

2.688

0.004

0.016

31.316

30.982

0.049

0.137

62.058

61.835

0.116

0.110

5.642

5.585

0.021

0.036

0.296

3.006

0.326

0.775

9.775

9.676

0.036

0.062

0.201

0.367

0.000

116.470 110.766 0.226 0.361

250.58791

158.621
tCO₂e

243.678
tCO₂

0.630
CH₄

0.977
N₂O

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Task Force on Climate-Related
Financial Disclosures

Good Energy was set up to tackle climate change – and weather volatility directly
affects our business of sourcing and supplying renewable electricity. The climate crisis
has a significant impact on our operational and strategic direction and how we evolve
our business model.

We are committed to incorporating the full recommendations laid out by the Task
Force on Climate-Related Financial Disclosures (TCFD) in the next 3 years. Below, we
have summarised our current approach and our journey towards meeting the TCFD
recommendations, cross referencing to other areas of the annual report which go into
more detail.

Governance - The organisation’s governance around climate related risks
and opportunities.

Good Energy’s
Sustainability Partner,
Cherish Jackson

Our approach

Good Energy’s Sustainability Partner currently has overall responsibility for climate-related
risks and opportunities and our future focus describes how we will implement oversight
from senior management. Although there is currently no formal Board overview on formal
climate-related risks and opportunities, the purpose and strategy of Good Energy naturally
considers this as it relates to our core business.

The following documentation represents good governance about climate related issues
and is presented to senior management by Good Energy’s Sustainability Partner, who is
responsible for reviewing progress and defining subsequent actions each year.

• Legal Assessment: This is used to evaluate Good Energy’s compliance with its

obligations to meet applicable environmental legislation. This assessment is re-evaluated
on a quarterly basis where appropriate action is taken.

• Environmental Objectives Matrix: provides clear assessment of how environmental risks
and opportunities can be managed; how necessary controls are being implemented;
and sets clear objectives to improve environmental performance.

An external annual audit against our brand promises.

An internal green audit took place in 2021 to provide management with recommendations
for mitigating climate risks and maximising opportunities.

In 2021 we began a project to obtain more data from the suppliers we contract with
about their sustainability, ethics, health and safety and IT governance. This prompted us to
refresh our practices and make changes such as updating our employee travel policy, and
informs our ability to assess our impact with our suppliers.

All of the above are subject to an annual management review where our Sustainability
Partner reports to the Head of People & Culture and is supported by the Information
Governance, Risk and Compliance Lead.

Our future focus

Formalise oversight process, decision making and responsibility with the Audit & Risk
Committee and Executive team to oversee all climate-related risks and opportunities

Implement Science Based Targets in H1 2022.

Develop our approach to working with sustainable suppliers.

Form an ESG Committee reporting line for the annual management review.

More
information

Read our Corporate Governance report on pages 80 to 90.

Read our Nomination and Remuneration report on pages 95 to 101.

Read about our green credentials on page 56.

Good Energy Annual Report 2021

Strategy – The actual and potential impacts of climate-related risks and opportunities
on the organisation’s businesses, strategy, and financial planning where such information
is material.

Our approach

Good Energy’s purpose is to power a cleaner, greener world. With the UK having
committed to reach net-zero emissions by 2050, we continue to drive the transformation
of the energy network to enable a zero carbon Britain. In 2021 we announced the
acceleration of our strategic shift to Energy & Mobility services.

Our community of over 1,900 independent generators is what makes us different. We buy
power directly from them, using it to match every kWh our customers use. Long-term
contracts with renewable generators are Good Energy’s primary instrument for hedging
power, providing some protection from the volatility of the market. Good Energy’s Risk &
Audit Specialist undertook an internal green audit which verifies our Gas and Electricity
claims. This was independently and externally verified by environmental audit services
SGS and is essential in our fight against greenwashing.

Short, medium and long-term climate-related opportunities are clear for Good Energy
and we have outlined a clear strategic direction to capitalise on a rapidly growing
market in decentralised, digitised clean energy and transport services based on 100%
‘real’ renewable power. This strategy is based on the anticipated doubling of demand for
electricity across transport and heat over the next 20 years and our decentralised model.
(Short term = within 2 years, medium = 3-10 years, long-term = 10 years +).

Good Energy’s Renewable Nation: Pathways to a Zero Carbon Britain report was released
in June 2021 and looked in detail at how the UK can meet its net zero commitments with
a pathway powered primarily by renewables.

Our ISO 14001 management system helps us determine the processes used to identify
climate related risks and opportunities, and how material they are.

The following documentation is used to evidence the impacts of climate-related risks
and opportunities relating to strategy, informing investment decisions, and is presented to
senior management and employees each year.

• Environmental Aspects Register identifies environmental aspects of our current and

potential activities, products and services. For example, in 2021 we had a larger than
normal amount of waste due to moving offices.

•

Environmental Policy and Environmental Objectives Matrix provides established
Environmental Policy and objectives in line with strategy, regulators and policy makers.

Ongoing risk management proved to be critical for all energy companies in 2021 due to
the energy crisis. It will also help us mitigate potential risks to the industry of a move to a
predominantly renewables-based grid. This has led to the acceleration of our strategy for
Energy & Mobility services.

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Strategic Report

Our future focus Continue necessary controls and set clear objectives to mitigate, as far as possible,

potential shocks from the energy market, such as discretionary cost reductions,
additional price increases as well as working capital optimisation.

Test and monitor customer software platforms and continue to monitor the market
to seize opportunities as they arise.

Continue to effectively engage in two-way communications with both internal and
external parties regarding environmental performance, outcomes, objectives and
policies. This includes increasing enhancements to the way we report our internal
carbon emissions externally.

Commit to carrying out internal green audits to identify risks, and review audit scopes,
across all departments.

Refine the environmental risk and opportunities register by classifying our identified
risks and opportunities by timescale (short, medium and long-term).

More
information

Read about the acceleration of our strategy and the short, medium and long-term
opportunities in our strategic review on pages 18 to 20.

Read more about how we have reduced the impact of our office space on page 62.

Read more about our fight against greenwashing on page 56.

Read more about our two-way communication externally on pages 24 to 25.

Read more about our environmental performance internally on page 63.

Good Energy Annual Report 2021

Risk Management - How the organisation identifies, assesses, and manages
climate-related risks.

Our approach

Our risk management is integrated into our Group-wide approach as described in the
Audit & Risk management report and principal risks and uncertainties.

Risks are identified, analysed and assessed by the information governance, risk and
compliance team in conjunction with the Sustainability Partner and recorded on
relevant risk registers, which cover current and emerging risks. These are shared with top
management for full visibility and to gain appropriate support.

Our Risk and Opportunities Matrix provides clear assessment of how environmental risks
and opportunities can be managed by implementing necessary controls and setting
clear objectives to improve environmental performance. This is presented to senior
leaders annually.

Climate-related risks and opportunities are recorded in the corporate risk register,
which includes risk effect, mitigations and future mitigations. For example, causing
an environmental incident has been identified and assessed as a potential risk in the
corporate risk register. Hybrid working for Good Energy employees is recorded as an
opportunity and controlled risk; it saves emissions but will be monitored closely as the
pandemic and restrictions ease.

• Methodology used to assess risks on Good Energy’s environmental risk register

accounts for likelihood of the event vs impact. The areas considered are financial,
strategic, business and project objectives; shareholder relations; environmental;
regulatory; and compliance. The Sustainability Partner reviews the residual risk
score against the defined risk appetite tolerance to ascertain if additional measures
are required.

Risk Title

Cause

Event

Effect

Mitigations

Risk Score
(likelihood
x impact)

Causing an
Environmental
Incident

Local river
pollution

Contractor
Management

Appointing
inappropriate
and
irresponsible
contractors

Contaminated
water from office
server room air
conditioning
activity entering
local river and
water tables

Contractor
working on
behalf of Good
Energy breaching
environmental
legislation
and ethical
environmental
practices I.e.
irresponsible
waste handling

Failure to
achieve Science
Based targets
(SBT)

Our set
emissions
reduction
target of 50%
decrease from
2018 – 2030 is
not achieved

Target may not
be met if travel
emissions from
commuting and
business travel
increase to pre
Covid-19 levels

Damage to
company
reputation and
brand image
leading to
questionable
operational
practices

Possible fines
or sanctions
having caused
damage to local
biodiversity

Carry out
competency check
on all appointed
drainage contractors
and review of site
drainage plans

Fines or
sanctions
having caused
damage to local
environment

Carry out adequate
screening checks
of all contractors
checking
competency,
experience, and skill.

All working
contractors must be
supervised by the
facilities team.

Emissions will be
monitored closely
through a monthly
emissions KPI as
well as encouraging
greener transport
methods and
continuing with
our hybrid working
model

Risk management training courses are held for senior leaders, with instructions on
how to identify, measure, control and manage risks. The training consists of E-learning
and two workshops, which are mandatory for senior leaders and optional for the rest
of organisation.

Strategic Report

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Our future focus Continue to effectively engage in two-way communications with both internal and

external parties regarding environmental performance, outcomes, objectives and policies.

Continue providing risk management training across the organisation and to new starters.

Embed regular discussion with the Audit & Risk Committee to include specific climate-
related risks and formalise the processes and methodology.

Support collaboration internally between the climate specific risk register and the overall
corporate risk register presented to Audit & Risk Committee.

Embed an acceptable residual risk score and formal methodology for climate change
risks specifically in our corporate/top risk register.

Begin to capture home working energy use through employee hybrid working surveys.

More
information

Read more about our principal risks and uncertainties on pages 33 to 35.

Read more about our two-way communication externally on pages 24 to 25.

Read the Audit & Risk management report on pages 91 to 93.

Metrics & Targets – The processes for identifying, assessing, and managing climate-related
risks are integrated into the organisation’s overall risk management.

Our approach

We have achieved ISO14001 certification for the past four years (implemented in 2017).
This confirms we are meeting international standards for measuring and improving our
environmental performance and is externally audited each year.

In 2020 we joined the UN’s Race to Zero campaign as part of its SME Climate Hub.
The campaign brings together a diverse group of international companies united by a
commitment to achieve net-zero emissions before 2050.

We have measured and reported our Scope 1, 2 and 3 greenhouse gas (GHG) emissions
and how any created emissions are neutralised since 2015.

We calculate carbon emissions according to the GHG Protocol, ISO 14064-3 and DEFRA
Environmental Reporting Guidance, with calculations externally audited and verified by
a third party. The verification exercise is performed to the ISO 14064-3 standard and is
compared to previous years and tracked each year.

Our Carbon Emissions Summary provides clear methodology and calculations for annual
carbon emissions accounting to provide metrics in setting objectives and targets for future
years, along with commitments to climate initiatives such as the Science Based Targets.

Good Energy’s headquarters moved to Wiltshire Council’s Chippenham offices in January
2021. The offices are supplied with 100% renewable energy, enabling us to reduce our
scope 1 emissions. Additional solar panels were installed in 2021 with the aim of having
the entire building running off its own PV. Good Energy and Wiltshire Council are working
together to achieve environmental objectives of reducing the environmental impact,
carbon emissions and climate responsibilities of our shared offices.

Good Energy Annual Report 2021

Our future focus Retain our ISO14001 certification.

Implement the Science Based Targets in H1 2022. We have committed to reduce our
carbon emissions to the level needed to keep global heating to a maximum of 1.5
degrees, with a target of reducing our emissions by 50% by 2030.

Extend Scope 3 carbon emissions reporting. We currently include energy consumption,
waste, water, procurement, commuting and business travel, but are extending this to
capture our meter readers’ travel emissions.

We are closely monitoring carbon emissions following the introduction of our post-
lockdown hybrid working practices so we can identify trends. Going forward, we will
include home working emissions to be able to provide a more accurate picture of
emissions resulting from our business activities.

Set carbon reduction targets for remuneration policies which will include emissions
from suppliers.

More
information

Read more about our environmental impact on pages 52 to 53.

Read more about our carbon emissions on page 66 to 67.

Read about our carbon offset schemes on page 54.

Read more about how we have reduced the impact of our office space on page 62.

Definitions:

ISO 14001: is an internationally agreed
standard that sets out the requirements for
an environmental management system. It helps
organisations improve their environmental
performance through more efficient use of
resources and reduction of waste.

Internal green audit: annual internal green audit
to an appropriate scale for a small business.

Science Based Targets: an initiative providing a
pathway for companies to reduce greenhouse
gas emissions (GHG), helping prevent the worst

impacts of climate change and
future-proof business growth.

GHG Protocol, ISO 14064-3: is an
international standard for quantifying
and reporting GHG emissions.

DEFRA: The Government Department for
Environmental, Food and Rural Affairs that
develops and implements policy on the
environment, food and rural issues. They are
responsible for supporting the growth of a
sustainable green economy.

Nigel Pocklington

Chief Executive Officer

On behalf of the Board

27 April 2022

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7474

Good Energy Annual Report 2021

Good Energy Annual Report 2021Governance Report

Board of Directors

Governance & Directors’ Report

Audit & Risk Management Report

Remuneration & Nomination Report

Independent Auditors’ Report

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Governance Report

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75

Governance Report

Board of Directors

William Whitehorn
Chairman (Independent)

Nigel Pocklington
Chief Executive Officer

Responsibilities

Chairman of the Board, Member of the
Audit & Risk Committee and Nomination &
Remuneration Committee.

Nigel joined as CEO in May 2021 to lead Good
Energy’s development as an innovative supplier at
the forefront of the transition to net zero.

Will focuses on fast-moving and growing
companies, with extensive experience in many
sectors, but especially in technology, digital
and branding.

Will holds Non-Executive roles across a range of
companies, including space technology company
AAC Clyde Space AB of Sweden. In 2021 he was
appointed Chair of Seraphim Space Investment
Trust PLC, which is the World’s first quoted Space
Tech investment company. He was appointed
Chairman of Craneware PLC in 2019. In 2022
he was also appointed to the U.K. Government’s
Space Exploration Advisory Committee (SEAC),
which reports into the UK Space Agency.

Skills and experience

Will spent over 20 years with Virgin Group,
where he was responsible for global brand
development and corporate affairs. He also played
a key role in founding (among others) Virgin Rail
and Virgin Galactic and was special advisor to Sir
Richard Branson.

Joined Board

July 2018

Skills and experience

Nigel is a widely experienced senior executive
with a strong commercial, digital, and operational
track record spanning over 25 years. He most
recently served as Chief Commercial Officer of
Moneysupermarket Group plc. Prior to this, he held
senior roles at Expedia Inc., including President of
eBookers and Chief Marketing Officer of Hotels.com.
He spent a decade of his early career at Pearson plc,
including a period leading the digital operations of
the Financial Times. He holds an MA and M.Phil from
Oxford University and an MBA from INSEAD. In March
2022, Nigel was appointed Chair of Zap-Map.

Nigel is also a Non-Executive Director and
remuneration committee chair at Kin + Carta plc,
a global digital transformation business focused
on helping make the journey to becoming a digital
business tangible, sustainable and profitable.

Joined Board

May 2021

Good Energy Annual Report 2021

Rupert Sanderson
Chief Financial Officer

Responsibilities

Rupert is Chief Financial Officer of Good Energy
Group plc.

Skills and experience

Rupert joined us in February 2017 and is
responsible for all finance, legal, company
secretariat 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

January 2020

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Governance Report

Board of Directors

Juliet Davenport
Non-Executive Director

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

Responsibilities

Juliet is the founder of Good Energy, building the
company from scratch in 1999 with the mission
to tackle climate change. In 2013 she was
awarded an OBE for services to renewables.

Juliet currently sits on the board of the Renewable
Energy Association, Innovate UK and the Crown
Estate, as well as the advisory boards of British
Growth Fund, Aurora, and the Grantham Institute.
As well as advising companies in the cleantech
space, Juliet has chaired the LSE-listed investment
trust Atrato Onsight Energy since October 2021.
Juliet is also Vice President of the Energy Institute, of
which she has been an Honorary Fellow since 2018.

Skills and experience

Juliet 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.

Joined Board

2002

Member of the Audit & Risk committee and Member
of Nomination & Remuneration Committee.

Tim was appointed Non-Executive Director in
December 2017 and is a Technology Executive,
Advisor and Angel Investor who brings 25 years
of digital innovation, execution and operation
experience to the Board.

A former executive of Moneysupermarket Group PLC
where he was CIO for 7 years and a co-founder and
former executive at AutoTrader UK. Now founder and
CEO of Disrupt Club, a specialist digital advisory firm.
In 2020, Tim was appointed a Non-Executive Director
to the Zap-Map Board.

Skills and experience

Tim is a chartered engineer (CEng) and chartered
IT professional (MBCS CITP) with a depth of
experience in leading digital transformation and
commercial growth; both scaling early stage
companies and the formation and leadership of
highly performing teams in established organisations.
Tim has extensive experience in delivering innovative
consumer propositions in various online sectors such
as retail, automotive, travel, marketplace and the
highly regulated verticals of insurance, financial
services, energy and telecommunications.

Joined Board

December 2017

Good Energy Annual Report 2021

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Emma Tinker
Non-Executive Director (Independent)

Nemone Wynn-Evans
Non-Executive Director (Independent)

Responsibilities

Chair of Nomination & Remuneration Committee
and Member of the Audit & Risk Committee.

Chair of the Audit & Risk Committee and member
of the Nomination & Remuneration Committee.

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 spinout 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 experience

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

Joined Board

September 2016

With extensive experience in financial services,
Nemone brings skills across audit, risk management,
business development, corporate finance, corporate
governance, investor relations and marketing.

Nemone holds a number of roles across a range of
companies, serving as Board Chair at Shepherds
Friendly Society (where she previously chaired the
Risk Committee), as a Non-Executive director at
Hinckley & Rugby Building Society where she sits
on the Audit Committee, and as a Board Advisor
at SORBUS Partners LLP. She is also a Fellow of the
Chartered Institute of Securities and Investments.

Skills and experience

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

Joined Board

February 2019

Governance 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 Alternative Investment
Market (“AIM”) Rules. The Board believes that
the 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. The full s172 statement is available on pages 24
to 25. This governance report 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 a cleaner, greener world. We make it
simple to generate, share, store, use and travel by
clean power.

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 ambition is to support one million
homes and businesses cut carbon from their energy
and transport use by 2025.

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

• Core supply business fairly priced, transparent,

100% renewable electricity operating efficiently
and provides the ability to unlock future
opportunities.

•

Decentralised energy services to help
households and businesses generate, store
and consume clean power being the trusted
portal on how to go green.

• Mobility make it easy to own, drive, fuel and

pay for an electric vehicle.

Good Energy continually reviews and aligns 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.

Excellent progress has been made in pursuit of its
strategic ambitions and the momentum we are
building to deliver the energy market of the future.

Read our strategic review on pages 18 to 20.

Read more about our business model on pages
26 to 27.

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 road-shows. 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.

Read more about our stakeholder engagement on
pages 24 and 25 and in principle 10.

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.

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

• Which? magazine’s latest ranking of green

energy suppliers saw us top the league table.
The research from Which? rates energy
companies on sustainability, awarding
Good Energy the highest score and new
Eco Provider badge.

•

In recognition of the many ways in which
we continue to support renewable energy

Good Energy Annual Report 2021generation across the UK, we secured a
permanent derogation from OFGEM’s
price cap in August 2019.

• We are the first energy company to be awarded
the Good Housekeeping Institute’s new green
accreditation after being verified as an “100%
renewable electricity provider”. This is another
way of showing people what we do is different.

• 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, in which
employees are key internal stakeholders within
the business and developing its culture.

Read more about our employees on pages 48 to 51.

Read more about our wider stakeholder engagement
on pages 24 and 25.

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 Board meets at least four times a year. Given
the attempted take-over bid and requisitioned
general meeting, more frequent board discussions
and ad hoc meetings were necessary in 2021. For
Board meetings, the management team submit
reports for consideration and the Board has a formal
schedule of matters reserved to it. The Board have
access to the company secretarial team and are
able to take independent advice in the furtherance
of duties if necessary.

The Nomination & Remuneration Committee
discusses 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.
2021 was an exceptional year due to the hostile
take-over attempt and the requisitioned general
meeting and Non-Executive Directors therefore spent
additional time during the year with Good Energy.

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
level. Our risk identification and mitigation processes
have been designed to be responsive to the rapidly
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.

We believe the Company is well positioned to
mitigate these principal risks currently facing the
energy industry through a combination of our risk
management processes, our control activity and the
strategic direction we are pursuing.

Read more about our principal risks on pages 33
to 35.

Read more on risk management and controls in the
Audit & Risk Committee Report on pages 91 to 93.

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

The Board currently comprises two Executive,
the Chairman and four Non-Executive Directors
as described on pages 76 to 79. The roles and

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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
Nigel Pocklington

• Overseeing the day-to-day

•

operation of the Group’s business.

• Developing and implementing

Establishing and maintaining
formal and appropriate
delegations of authority.

the 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. LDC Nominee Secretary
Limited serves as the Company
Secretary 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.

Good Energy Annual Report 2021Other 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,
Chief Financial Officer and four Non-Executive
Directors, three of whom the Board considers to
be independent. Juliet Davenport is not deemed
to be independent by virtue of her previous CEO
role. The Board considers that the Non-Executive
Directors as a unit play an important role in
ensuring that no individual or group dominates
the Board’s decision making.

•

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

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

Juliet Davenport has a substantial shareholding
in the Company, in aggregate representing
approximately 3.7% of the issued capital. All
current Directors hold shares in the Company
although the Company does not require them
to do so.

• 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.

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 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 84.

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 strategic direction. In 2021
Nigel Pocklington was appointed CEO, bringing
strong commercial, digital, and operational track
record spanning over 25 years. Nigel is also a Non-
Executive Director for Kin + Carta, a global digital
transformation business focused on helping make
the journey to becoming a digital business tangible,
sustainable and profitable, where he chairs the
Remuneration Committee and is a member of the
Audit and Nomination Committees. The Nomination
& Remuneration Committee also works to ensure the
right balance of skills, knowledge and capabilities on
the Board.

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.

The Board continues to have 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.

Read more about the Board of Directors on pages
76 to 79.

Read more about the Nomination & Remuneration
Committee on pages 95 and 96.

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 89.

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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’s purpose is to power a cleaner, greener
world, and its core values, to be fair, straightforward,
determined and inclusive, underpin our culture.
Treating employees, shareholders, customers,
suppliers and all our stakeholders in a way that
reflects our culture is important to us, and the Board
endeavours to ensure that the Group’s policies, which
are implemented and communicated to the relevant
stakeholders, internally and externally, reflect our
values. Treating customers fairly is key to the success
of the Group, and we are committed to acting
ethically in all our business relationships, and expect
the same high standards from our suppliers and other
business partners. Our Modern Slavery Act statement
is published on our website.

In 2021 Good Energy updated it’s ‘Guiding
Principles’ to the Code of Good Conduct. The
Code of Good Conduct reflects the Board’s duties
under the Companies Act 2006, s172. This ensures
everyone has clarity on standards of conduct and
managing potential risks within the business in line
with our purpose and values. The Code of Good
Conduct focuses on seven key themes: IT Security,
Operating with Integrity, Whistleblowing, Valuing
our People, Expenses, Information Governance
and Procurement, and is refreshed at least annually
as the Group continues to evolve the way in which
it secures engagement from employees at all levels
across the organisation.

Our Code of Good Conduct:

•

Provides 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.

Reflects the environment in which the
Company operates.

• Mitigates risk

•

Explains where our employees can get advice
including where to access our company policies

• Demonstrates the Group’s commitment to

working with honesty, respect and transparency.

It is important to Good Energy that we have a fair,
diverse and inclusive culture, and we operate on
the principle that a workplace where people’s
differences are valued creates a more productive and
innovative organisation and will help us attract and
retain employees to allow us to meet our strategic
objectives. The Group’s employment policies follow
best practice in terms of equal opportunities for all
employees, irrespective of race, gender, nationality,
sexual orientation, disability, marital status, religion or
age. Good Energy encourages where possible, the
employment of people with disabilities and giving
fair consideration to disabled applicants having due
regard for their skills and abilities. Should a colleague
become disabled during employment with Good
Energy, efforts are made to continue employment
with any additional support and training identified
and undertaken. Flexible working requests are
available to everyone.

Gender
Diversity1

Balance of
the Board1

Non-Executive
Tenure1

Male

Female

Executive

Non-executive

2-5 Yrs

5+ Yrs

1. Data as at 31 December 2021.

Good Energy Annual Report 2021The 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

To help us ensure that ethical values and behaviours
are recognised and respected, we have nominated
Inclusion Champions across the workforce to help us
deliver on our Diversity and Inclusion plan to enhance
our commitment to a diverse workplace.

You can read more about diversity and inclusion on
page 49.

Our gender pay gap report is set out on page 48.

Our section 172 statement is available on pages 24
to 25.

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 Nomination & Remuneration
Committee and an Audit & Risk Committee to
support effective governance and decision-making.

The key areas for focus for the Committees are
listed above.

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

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

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 and one to one meetings. The Board actively
encourages shareholder participation at its Annual
General Meeting and general meetings. Since 2020,
Good Energy have used the Investor Meet Company
platform enabling all shareholders to interact with
the CEO and CFO at key financial events.

Good Energy’s Investor Relations team supports
effective communications with shareholders
and other investors and can be contacted at:
investor.relations@goodenergy.co.uk. In addition,
there is a dedicated group website and option to
sign up to investor related alerts.

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 are
described in our section 172 statement on pages 24
to 25 of the strategic report.

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The Board and its Committees

Board & Committee Changes

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 76 to 79. Details of the Directors’ remuneration,
including share options, are set out in the Nomination
& Remuneration report on pages 97, 98 and 101.
Details of the Directors’ interests in ordinary shares in
the capital of the Company are set out on page 104
under Statutory and other information.

The Board maintains a list of matters reserved for
its approval, generally being 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.

The Board has established two principal committees
which focus on particular areas as set out overleaf.
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
maintain 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 Code of Good
Conduct and includes a detailed authorisation matrix
covering financial limits and approvals needed when
conducting business on behalf of the Group. The
delegation of authority is reviewed by the Board
at regular intervals.

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.

In February 2021, the Company announced
Juliet Davenport would be transitioning from
Chief Executive Officer to a Non-Executive Director
position. In April 2021 the Company announced the
appointment of Nigel Pocklington as Chief Executive
Officer. Nigel is a widely experienced senior
executive with a strong commercial, digital, and
operational track record spanning over 25 years.

Read more about the Board of Directors on pages
76 to 79.

Read about succession planning on page 90.

Independence of the
Non-Executive Directors

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

Juliet Davenport is not deemed to be independent
by virtue of her previous CEO role. The Chairman,
Will Whitehorn, was independent upon appointment
to the Board in July 2018.

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.

Good Energy Annual Report 2021Board and Committee composition

The following table sets out the composition of the Board and its committees as at 31 December 2021:

Board

Audit & Risk
Management

Nomination &
Renumeration

–

Nigel Pocklington

Rupert Sanderson (CFO)

Will Whitehorn (Chairman)

Juliet Davenport (Non-Executive)

Tim Jones (Non-Executive)

Emma Tinker (Non-Executive)

Nemone Wynn-Evans
(Non-Executive)

Chair

Member

– Not applicable/invitation only

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Board and Committee Attendance

Executive Directors

Nigel Pocklington2

Rupert Sanderson3

Non-Executive Directors

Will Whitehorn4

Juliet Davenport5

Tim Jones

Emma Tinker

Nemone Wynn-Evans

Board

Audit & Risk
Committee

Nomination &
Remuneration
Committee

4/4

7/7

N/A*

3/5

3/3

5/5

N/A*

2/3

2/2

3/3

2. Nigel Pocklington joined the Board 1 May 2021.

3. Rupert Sanderson part-attended the Nomination & Remuneration Committee meetings by invitation only.

4. Will Whitehorn was unable to attend two A&RC meetings and one N&RC meeting due to prior commitments, however he provided full comments on the materials

discussed to the Board ahead of those meetings.

5. Juliet Davenport did not attend those committee meetings held after her transition to a non-executive role. She is not a member of the committees due to her not

being deemed independent by virtue of her previous CEO role.

*. By invitation only. Nigel Pocklington attended three A&RC meetings and two N&RC meetings. Rupert Sanderson attended five A&RC meetings and two N&RC

meetings.

Good Energy Annual Report 2021Operations of the Board

Details of the number of scheduled Board meetings
and attendance of Directors is set out in the table
on page 88. 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 as well as the hostile attempted take-over
bid by Ecotricity. In addition, the Board or relevant
Committees held regular informal discussions on a
variety of topics to consider the impact of macro-
economic events, developments in Government
policy on the Company, 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 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 pages 82.

As at 31 December 2021 the Executive team
comprised the Chief Executive, Chief Financial
Officer, Chief Operating Officer, Technology Director
and Marketing and External Affairs Director.

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.

There are regular forums to provide clearer
governance allowing the Company to strengthen
in good decisions, reduce risks, and review strategic
plans, alongside the Audit & Risk Committee and the
Nomination & Remuneration Committee. Monthly
forums include the Executive Committee, Customer
Board, People & Operations Board and Energy &
Assets Board (Energy Board following the sale of the
generation asset portfolio). Executive and Sales &
Operations meetings are weekly.

Board and Directors’
Performance Evaluation

At the time of writing, an internal Board and
Director’s Performance evaluation is currently being
undertaken. Results will be analysed, discussed and
actions set for 2022 to ensure an effective Board. The
Company intend to conduct an external Board review
next year.

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Succession planning

The Board periodically reviews its approach to
succession planning, which includes contingency,
short-medium-long term planning. CEO succession
planning took place in early 2021 and the Company
appointed an Executive search firm to recruit a
new CEO. The process covered a pool of external
and internal candidates. As internal candidates
were considered, the Good Energy NEDs operated
an independent process and appointed Nigel
Pocklington as CEO in May 2021.

As well as contingency and short-medium-long term
planning, succession planning considers diversity and
promoting talent across the business.

Read more about development in the Nomination &
Remuneration Committee report on pages 95 and 96.

Performance of Individual Directors

The individual performance of Executive and Non-
Executive Directors is reviewed periodically. 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 as part of the Board
effectiveness review.

The performance evaluations and subsequent
remuneration reviews of members of the
Executive team are discussed at the Nomination &
Remuneration Committee during the first quarter
each year and on an ad hoc basis as required. Aside
from the CEO attending when relevant, members
of the Executive team do not attend discussions
pertaining to their own performance.

Annual General Meeting (AGM)

The Company is pleased to be able to hold an open
meeting in 2022. All holders of ordinary shares may
attend the Company’s AGM at which the Chairman
and Chief Executive Officer present a review of the
key business developments during the year.

Given the constantly evolving nature of
macroeconomic events, should circumstances
change before the time of the AGM we will
notify shareholders of the change by RNS and
on our website as early as possible before the
date of the meeting.

At the meeting, shareholders can ask questions of
the Board on the business of meeting, including the
Annual Report and Accounts and the running of the
Company generally. All Directors are invited to attend
each AGM. Unless unforeseen circumstances arise,
the Chair of each committee will be present to take
questions at the AGM.

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.

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.

Shareholders unable to attend the AGM can vote on
the business of the meeting either by post or online.

The time and venue for the 2022 AGM will be
announced in the second quarter of 2022

Good Energy Bonds

The first repayment date for Good Energy Bonds II
was 30 June 2021 and the Company received and
repaid £420,750 worth of redemption requests on
that date.

On 25 May 2021, Good Energy announced the
repayment of 70% (£11.5m) of Good Energy Bonds II,
as a result of a strong net cash position and increased
capital flexibility following the restructure of the
financing of its renewable generation asset portfolio.

The second repayment date for Good Energy
Bonds II is 30 June 2022, and the Company had
received £153,675 of valid redemptions requests
by the deadline.

Further details are available on the Group’s website:
group.goodenergy.co.uk/investor-centre/bond-
information/good-energy-bonds-two, and will be
communicated directly to bondholders.

Good Energy Annual Report 2021Audit & Risk Management report

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 & Risk Management
Committee are shown on page 87.

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 colleagues from Internal
Audit & Risk Management.

The primary duty of the Audit & 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 were undertaken throughout 2020 and 2021
in light of the Covid-19 outbreak.

The Audit & 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.

During the period, the Committee:

•

oversaw the re-tender of the Group’s auditors;

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

oversaw ongoing improvement of financial and
operational reporting and controls;

• were consulted on the adjustments to financial
reporting and provisioning as a result of the
Covid-19 outbreak and its economic impact; and

• were informed on the risk materiality throughout

the energy wholesale cost increases.

Risk control environment and internal audit

The Company has an established risk and internal
audit function which, in January 2022, moved from
the Chief Financial Officer to the Chief Operating
Officer to improve visibility of principal risks. The
function is now led by the Information Governance,
Risk and Assurance Lead.

The 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 principal risks, reporting
on risk events to the Audit & Risk Committee and
reviewing and testing the effectiveness of internal
controls through audit reviews. The Company
has a dedicated Compliance Team in place to

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Chair of Audit & Risk Committee

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

Overview

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 principal risks facing the Group
is set out in the strategic report on pages 33 to 35.

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 & Risk Committee
which reviews this on an annual basis.

Governance Report

provide context to company risk and assurance at
an operational level to support the internal audit
function. Principal risks are shown on pages 33 to
35 in the strategic report.

External Audit

Auditor appointment

The audit of the Group’s financial statements for
the period ended 31 December 2020 was completed
by Ernst & Young and the Committee re-tendered
during the year.

The Group initiated a competitive tender process
for its audit work, overseen by the Audit & Risk
Committee. The tender process included a mixture
of participants including smaller independent audit
firms, Top 10 and Big 4 accountancy firms. The
process completed during the period and the
Group appointed Mazars as auditors during 2021.
Mazars appointment was confirmed by members
at the 2021 AGM.

The Committee will consider whether to
re-tender the audit after a five year period,
or earlier if appropriate.

Auditor independence

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

For the financial year ended 31 December 2021, the
Committee has conducted its review of the auditors’
independence and concluded that no conflict of
interest exists between Mazars audit and non-audit
work. The Audit & Risk Committee is using Mazars for
audit only services.

Audit and non-audit fees

The Audit & Risk Committee assessed the
independence of Ernst & Young and Mazars
and concluded that there was no remuneration
for non-audit work during the period. For further
details regarding fees paid, see note 7 to the
financial statements.

Whistleblowing Policy

The Group’s whistleblowing policy is supported
by a clear process where concerns can be raised
internally at all levels as well as to the Non-Executive
Directors. An independent person may be engaged
in some cases. The policy also includes reference
to the list of prescribed persons or bodies that may
be contacted outside of Good Energy, with contact

details. The policy applies to any person, from
employees to casual contract workers, who 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 & Risk Committee. Any whistleblowing
incidents and their outcomes are reported to the
Committee and by exception, to the Board by the
Chair of Audit & Risk Committee. No reports were
made during 2021.

Going Concern

The financial statements have been prepared
on the going concern basis 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.

The Group has had a resilient financial
performance despite significant pressure from
commodity markets and low wind levels, impacting
on the year’s performance.

The cash released through the sale of the
generation asset portfolio completed in January
2022, has provided the Group with £20.7m of
unrestricted cash to date with a further £0.5m
of deferred consideration due in June 2022.

Looking to the future, the Group has performed a
going concern review, going out until June 2023,
considering both an internal base case, and various
externally provided scenarios. The scenarios were
provided by Ofgem in February 2022 as part of
their review into the financial stability of UK Energy
suppliers. Having reviewed this forecast, and having
applied a reverse stress test, the possibility that
financial headroom could be exhausted is remote.

The scenarios are a combination of price and
demand-based impacts reflecting the volatility
in the wholesale and supply market currently. All
scenarios include the same base hedge position for
Good Energy as that is what is in place at time of
publishing this assessment. (We are well hedged for
summer 2022 and plan to incrementally increase
hedging for winter 2022). All scenarios assume
domestic customer churn continues at minimal levels
(Q4 2021 <5% versus 15%+ prior to H2 2021). Churn
is expected to remain low until wholesale prices
stabilise and the default price cap catches up to
be fully reflective of the wholesale costs of power
and gas seen by suppliers.

The scenarios are:

Scenario 1 - Low Price

Scenario 2 - Central Price

Scenario 3 - High Price

Scenario 4 - High Price with 3-month demand (15%

Good Energy Annual Report 2021
increase in gas usage vs monthly norms, 2% increase
in electricity usage vs monthly norms) shock Q1 2023

Scenario 4a – high Price with 1 month demand
shock (Non OFGEM Scenario. 15% increase in gas
usage vs monthly norms, 2% increase in electricity
usage vs monthly norms)

These mitigations could include discretionary
costs reductions, additional prices increase as well as
working capital optimisation. In addition, the business
believes a 3-month demand shock to be excessive,
demand shocks seen previously such as “beast from
the East” tend to cause a one-month exceptional
impact only.

Scenario 5 – Extreme Price

The wholesale prices covered by these scenarios are
demonstrated in the below chart. Whilst the chart
reflects gas wholesale costs, the chart for electricity
wholesale costs looks very similar as gas powered
power stations help set electricity wholesale prices.

From a tariff perspective all scenarios reflect the
movement in default/deemed price capped tariffs
directly linked to wholesale costs developments.
However only in the High & Extreme price scenarios
are Standard Variable tariff (SVT) price rises
assumed. As Good Energy has a derogation from
the price cap, it is allowed to change the level of
its SVT tariff to reflect the true cost of supplying
renewable energy. This derogation allows Good
Energy to change price sooner than changes to
default/deemed tariff changes, allowing us to match
more effectively between cash in and cash out of the
business. This derogation remains in place until the
end of the Ofgem price cap, currently planned for
December 2023.

Other impacts not included in the modelling
include low wind output levels in a year. The
company hedges to seasonal normal levels of
wind, solar and temperature. 2021 was a year of
significantly lower wind than seasonally normal
which had a negative financial impact on the
business. However, the business has not modelled
this as a going concern scenario for two reasons.
The first is modelling to seasonal norms will work
over a longer-term basis, and secondly, we have
taken steps to mitigate the impacts of low wind
within our portfolio from 2022 onwards.

All scenarios modelled include repayment of £0.2m
of Bond debt in June 2022. The earliest the remaining
bond debt of £4.7m can be requested for repayment
is June 2023, although experience suggests the
amount formally requested to be repaid at this point
will be in the hundreds of thousands only. Excluding
bond debt, the business has no other material (£1m+)
debt repayments due in the next 18 months.

Therefore, Directors are confident in the ongoing
stability of the Group, and its ability to continue
operation and meet its commitments as they fall
due over the going concern period. Accordingly,
the Directors adopt the going concern basis in
preparing the financial statements.

Going Concern - Gas (p/therm) Commodity Cost Development

750

600

450

300

150

Apr-22

May-22

Jun-22

Jul-22

Aug-22

Sep-22

Oct-22

Nov-22

Dec-22

Jan-23

Feb-23

Mar-23

Apr-23

May-23

Jun-23

Mid

Low

High

High + 3 Month Demand Shock

Mar 21st 2022 Fwd Commodity Curve

Extreme

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94
94

Good Energy Annual Report 2021

Good Energy Annual Report 2021Nomination & Remuneration report

and benefits for its people. Diversity, equality
& inclusion guidance and online training is
provided to all employees during induction.

The Inclusion champions continue to work on
employee engagement, analysing data and
implementing initiatives to enhance the Company’s
commitment to a diverse workplace. More details
are available in the strategic report on page 49.

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
Nomination & Remuneration Committee.

The Nomination & Remuneration Committee

The members of the Nomination & 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 Nomination & 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;

assess Company performance against
performance targets within reward schemes; and

oversee the group-wide remuneration strategy,
particularly with respect to diversity, inclusion and
gender pay.

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

The functions of a Nomination Committee were
introduced to the pre-existing Remuneration
Committee during 2016. In 2019, 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.

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Emma Tinker

Chair of Nomination and
Remuneration Committee

“A workplace where people’s
differences are valued creates a
more productive, innovative and
effective organisation”

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, and in 2020 a Diversity
& Inclusion working group of ‘Inclusion champions’
was established involving employees from across
the business. Diversity at Good Energy provides
different perspectives which are highly valued as
these differences support the Company in achieving
its purpose. The Company believes inclusion and
diversity are consistent with its values and are
considered in recruitment selection processes,
opportunities for development and promotion, pay

Governance Report

•

an Annual Bonus Plan that encompasses
both financial and non-financial annual
performance targets, details of which are
set out on page 99; and

a Performance Share Plan for Executive Directors
and members of the senior management team,
details of which are set out on page 100.

The Company has reported its second CEO pay ratio
relative to its employees and providing a transparent
view to the ratio. See page 105 for details.

The Group operates in a competitive environment
and 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.

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 fees paid to the Non- Executive Directors are
determined by the Board. They are not entitled to
receive any bonus or other benefits.

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

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. At Board level
we have 42% women. We recognise with the
recruitment of Nigel Pocklington as CEO the
gender diversity of Board members has widened.
Steps described on page 48 are being taken to
close the gap across the organisation as a whole,
however some disparity will be almost inevitable
given the recruitment of Nigel Pocklington.

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 applicants for the role
of Chief Executive 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 Nigel Pocklington following Juliet
Davenport’s transition to Non-Executive Director;

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

spent time on succession planning including
being consulted on the development of internal
talent and female leadership roles.

Read more about succession planning on page 90.

Read more about the skills and experience of the
Directors on pages 76 to 79.

Read more about our gender pay gap on page 48.

Remuneration

Information about the remuneration of the Directors
of the Company for the year ended 31 December
2021 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 whilst remaining
consistent with its tolerance for risk and comprise:

Good Energy Annual Report 2021Service agreements, notice periods and termination payments

Name

Position

Date of contract Notice period Annual Salary (£)

Chief Executive
Officer

Chief Financial
Officer

02 August 2007

9 months

163,000

6 April 2021

6 months

173,333

8 January 2020

6 months

162,125

26 July 20183

30 July 2021

01 December 2017

02 September 2016

45,000

29,167

28,750

30,000

32,000

Nemone Wynn-Evans

01 January 2019

Executive Directors

Juliet Davenport1

Nigel Pocklington2

Rupert Sanderson

Non-Executive
Directors

Will Whitehorn

Juliet Davenport

Tim Jones

Emma Tinker

1. Juliet Davenport remained employed until 31 July 2021 when she transitioned to Non-Executive Director. A portion of Juliet Davenport’s annual salary related to

her position as a non-executive director at Zap-Map. This non-executive position ended in March 2022.

2. Pro-rata for the period of directorship. Nigel Pocklington joined the Board effective 1 May 2021. His notice period is 6 months or 12 months in the event of a change

of control of Good Energy Limited or the Company.

3. Will Whitehorn’s formal appointment to the Board took effect on 4 July 2018.

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Salaries/Fees, annual bonus and benefits

Name

Salary/fee

Pension

Benefits in Kind

Annual Bonus

Total

2021 (£)

2020 (£)

Executive Directors

Nigel Pocklington1

173,333

17,333

409

191,075

Juliet Davenport2

163,000

16,625

6,814

66,200

252,639

266,691

Rupert Sanderson

162,125

16,269

4,975

31,590

214,959

182,210

Sub-total

498,458

50,227

12,198

97,7903

628,673

448,901

Non-Executive Directors

Will Whitehorn

45,412

Juliet Davenport2

30,151

Tim Jones

Emma Tinker

28,750

30,381

Nemone Wynn-Evans

32,129

Sub-total

166,823

45,412

45,470

30,151

28,750

25,000

30,381

30,763

32,129

32,165

166,823

133,398

Overall total

665,281

50,227

12,198

97,790

795,496

582,299

1. Pro-rata for the period of directorship. Nigel Pocklington joined the Board effective 1 May 2021.

2. Pro-rata for the period of directorship. Juliet Davenport remained employed until 31 July 2021 when she transitioned to Non-Executive Director. Her 2021

salary related to her position as a non-executive director at Zap-Map. This non-executive position ended in March 2022. In addition, she received £133,919
as a severance payment.

3. This relates to the 2019 bonus which was deferred in 2020 during the uncertainty of the Covid-19 pandemic, and subsequently paid in Q1 2021.

Good Energy Annual Report 2021

Annual bonus scheme

Operation of the scheme

In 2021, the Remuneration Committee agreed a
non-material alteration to the performance criteria
for the scheme, introducing objective measures which
consider net cash flow from operating activities and
propositions in place of the C02 reduction, which
is no longer considered a bonus target as our BAU
operations focus on carbon reduction. 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 five 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 all five of these performance metrics are met.
Performance against the targets is measured against
threshold and on-target targets. No bonus will be
payable unless the Group’s profit before tax meets

the threshold targets unless the Nomination
& Remuneration Committee, in its discretion,
determines otherwise.

The Nomination & 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 five
Company performance metrics will be set by
the Nomination & Remuneration Committee.

The Group considers that the targets for 2022
are commercially sensitive and are not therefore
disclosed. However, retrospective disclosure of
targets for the year ending 31 December 2021
is provided in the table below.

Measure

Strategic objective

Weighting

Group profit before tax

Deliver profit growth

Propositions

Deliver propositions for growth

Net cash flow

Manage working capital

Net promoter score (NPS)

Maintain customer satisfaction ratings

Employee retention

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

45%

30%

15%

2021 targets and performance

The Company did not achieve the threshold profit before tax and therefore there is no bonus payable in
respect of 2021’s performance.

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Performance share plan (“PSP”)

Operation of the scheme

The PSP was introduced to align the Executive
Directors and any eligible employee for the next
three years, with shareholders, and has been
designed to provide a long term incentive and
alignment during this period. The PSP was
implemented during 2016 following advice
from external remuneration consultants and in
consultation with the Company’s ten largest
shareholders. In 2021, the plan was reviewed,
updated and approved for options granted
under the scheme going forwards.

The purpose of the Plan as part of total reward is
to encourage long-term, sustainable profit growth
for the benefit of all stakeholders.

The PSP is a deferred share award, which normally
vests in three years’ time from the date of grant,
subject to eligible employees remaining employed
by the Company at this date. It is issued at a
maximum 15% discount to the current share price.
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 annual
salary in exceptional circumstances. Certain schemes
prior to 2021 had a maximum limit of 50% of annual
salary due to options being granted at par value.

Performance against targets for schemes prior to
2021 are 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 for achieving stretch targets. No
award will vest unless Total Shareholder Return is
positive over the measurement period. From 2021,
awards will vest on a simple sliding scale from
minimum required performance of 0% to maximum
performance of 100%.

The Nomination & 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 2021 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. Of the options which matured
in 2021, 50% vested in line with performance
conditions of those options.

Measure

Strategic objective

Weighting

Earnings per share

Drive shareholder value

Share price

Drive shareholder value

80%

20%

100

Good Energy Annual Report 2021
Directors’ share options

Details of the Directors’ share options outstanding at 31 December 2021 are shown below.

Name

Nigel
Pocklington

Sub-total

Rupert
Sanderson

Sub-total

Juliet
Davenport

Date
option
granted

Number of options
outstanding as at
31 December 2021

Option
price

Exercised
during
period

Gain on
options
exercised

Cancelled/
surrendered
during period

22/10/2021

88,136

£2.51

88,136

15/11/2018

£0.05

29,214

98,627

29,213

19/04/2021

74,163

22/10/2021

55,763

£1.78

£2.51

129,926

29,214

98,627

29,213

13/02/2012

86,956

£1.15

13/02/2012

£1.15

17,390

13/07/2013

144,000

£1.25

15/11/2018

28,626

£0.05

32.610

148,371

61,236

Sub-total

Total

259,582

477,644

50,000

148,371

61,236

79,214

246,998

90,449

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Governance Report

102
102 Good Energy Annual Report 2021

Good Energy Annual Report 2021Statutory 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, which changed
on 1 February 2021, and principal place of business
is: Monkton Park Offices, Monkton Park, Chippenham,
Wiltshire, SN15 1GH and the registered number
is 04000623.

Share capital

On 31 December 2021, 16,783,914 ordinary shares
of 5p each were in issue. The Company is listed on
the AIM of the London Stock Exchange, and its shares
have been trading on the Aquis Exchange (formally
NEX Growth Market) since 5 January 2016.

Significant shareholders

At 31 December 2021, 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):

Company are held by a person other than the
holder 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 2021, authority was given to the
Directors to allot new ordinary shares up to a
nominal value of £277,384, 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 2022,
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

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

Dividends

Ecotricity Group Limited

4,201,071

25.0%

Martin Edwards & family

1,423,315

8.5%

Hargreaves Lansdown plc

1,139,194

6.8%

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, at Companies House 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

Alongside our ongoing investments, we aim to
deliver a dividend where appropriate, as part of
our growth strategy and revised capital allocation
policy. The policy has the objective of investing both
organically and inorganically across the business and
paying a dividend when appropriate to provide an
overall return to shareholders. We remain mindful of
maintaining and balancing the ability to invest in long
term growth opportunities.

Good Energy continue to operate a scrip dividend
scheme and the payment timetable of the final
dividend will be announced alongside the notice
of Annual General Meeting in June 2022.

Directors

The names of the Directors that held office during
the financial year are:

Nigel Pocklington, Rupert Sanderson, Juliet Davenport,
Will Whitehorn, Emma Tinker, Tim Jones and Nemone
Wynn Evans. Full details and biographies are set out
on pages 76 to 79.

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Governance 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
2021

%age of
issued share
capital

No. shares
as at 31
December
2020

%age of
issued share
capital

Current Directors

Nigel Pocklington

Rupert Sanderson

Will Whitehorn

7,500

19,004

52,000

Juliet Davenport2

627,455

Tim Jones

Emma Tinker

Nemone Wynn-Evans

9,489

1,563

9,500

0.04

0.11

0.31

3.78

0.06

0.01

0.06

22,270

52,000

627,455

9,489

1,560

9,500

0.13

0.31

3.78

0.06

0.01

0.06

Financial instruments

Impact on the environment

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 2.11 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 no longer operates referral
arrangements with any political parties.

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. 2021 is our first year reporting
on our current approach and our journey towards
meeting the TCFD recommendations.

More details about our environmental impact can
be found in the strategic report on pages 52 to 53.

More information about our approach to the TCFD
reporting framework are on pages 68 to 73.

More information can be found in the carbon
emissions summary on pages 66 to 67.

1. Certain Directors hold share options as detailed on page 101 within the Nomination & 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.

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Good Energy Annual Report 2021
Gender Pay

The Board welcomed the introduction in 2017 of Gender Pay gap reporting. In 2021, the Group’s mean
gender pay gap is 19%. This gap is due to there currently being more men than women at senior leader
level. Read more about our Gender Pay gap and how we are closing the gap on page 48.

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 goodenergy.co.uk/about-us/gender-pay.

CEO pay ratio

Good Energy have voluntarily chosen to disclose CEO pay ratio with employee pay, and 2020 was the
first year reporting on this.

Year

2021

2020

25th percentile pay ratio

Median pay ratio

75th percentile pay ratio

15:1

12:1

10:1

7:1

6:1

The table compares the total figure of remuneration for the Chief Executive Officer with Group employees
who are paid at the 25th percentile (lower quartile), 50th percentile (median) and 75th percentile (upper
quartile). 2021 is the second year we have reported CEO pay ratio, taking CEO pay as at 31 December 2021.

Although Good Energy are not required to report CEO pay ratio at present, we have voluntarily chosen
to disclose requirements under the Government’s methodology of ‘Option A’. All individuals employed at
31 December 2021 have been included in the calculation, and where applicable, remuneration has been
annualised for employees not employed on a full time basis and/or for the twelve months reported on.

The total remuneration for full-time equivalent employees includes (but is not restricted to):

•

annual salary and allowances

annual bonus

employer’s pension contributions

Average annual
salary (£)

CEO3

25th percentile

Median

75th percentile

Salary

260,000

19,905

25,755

Total pay and
benefits

191,075

20,555

27,136

39,874

42,756

The table shows the salary and total pay amounts. Quartile groups of employees are displayed using the
median values at the 25th, 50th and 75th percentiles providing a fair representation rather than basing it on
individual employees, to minimise the influence of anomalies.

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 2021 is published on its website goodenergy.co.uk/
modernslavery-act-statement.

3. Nigel Pocklington was appointed CEO on 1 May 2021. Salary is annual salary. Total pay and benefits are pro-rated.

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Governance Report

Related Party Transactions

Related party transactions are set out in note 32 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

There have been four events subsequent to the year-end which may be of note to users of
the financial statements.

Generation asset sale

Requisitioned general meeting

As announced in a strategic update on 25 November
2021, the Company appointed KPMG LLP to lead
a sale process for the Company’s entire 47.5MW
generation portfolio. Following a competitive process,
the disposal (Disposal) of the portfolio was completed
with Bluefield Solar Income Fund (BSIF) on 19
January 2022.

The initial consideration of £16.4m, less distributions
since the lockbox date of £0.7m, resulted in £15.7m
being paid to the Company on completion.

The final deferred consideration payment has been
agreed as follows:

£4.3m has now been paid, with a further up to £0.5m
to be paid on 30 June 2022, subject to Good Energy
meeting all its payment obligations up to that date for
power supplied by the portfolio to it under the power
purchase agreements.

As announced on 14 January 2022, Ecotricity
Group Limited requiring the Board to convene a
general meeting of shareholders for the purpose
of considering two resolutions, namely:

•

an ordinary resolution to remove William
Whitehorn from office as a director of the
Company (“Resolution 1”); and

a special resolution to direct the Board not to
dispose of the Company’s generation assets
without shareholder approval (“Resolution 2”).

The requisitioned General Meeting was held at
9am on Friday 11 February 2022 at SEC Newgate,
14 Greville Street, London, EC1N 8SB.

All voting was undertaken on a poll. The table on the
next page shows the votes received for and against
each of the Requisitioned Resolutions.

The total deferred consideration is there agreed
to be up to £4.8m.

Total consideration received to date is therefore
£20.7m, with an agreed final total consideration
of up to £21.2m by 30 June 2022.

106

Good Energy Annual Report 2021Requisitioned general meeting voting results

For

Against

Total

Withheld

Resolution

Votes

% ISC

Votes

4,581,943

41.7

6,411,473

58.3

10,993,416

65.5

35,198

4,658,286

42.8

6,226,697

57.2

10,884,983

64.9

143,631

Consequently, neither of the Requisitioned Resolutions received sufficient support from the Company’s
shareholders to be passed.

Invasion of Ukraine

On 24 February 2022, Russia invaded Ukraine. Since this date the uncertainty around gas and oil supplies to
western Europe from Russia; the impact of global sanction on Russia and their subsequent global impacts;
and the additional inflationary pressure placed on both UK and global economies related to the impacts of
the invasion have created a non-adjusting post balance sheet event. For Good Energy the impacts of this are
currently uncertain.

The wholesale market for electricity and gas spiked significantly in the weeks following the invasion but has
since settled down to a level like what had been seen at various points in the past six months (when wholesale
markets were already proving very volatile). The Company’s hedge positions as outlined in the operating
review on pages 30 and 31, mitigates the immediate impacts of the conflict, but there will remain uncertainly
through 2022 as the conflict and related inflationary impacts develops. The Company has mitigations it can
employ through 2022 to offset further risks caused by the situation.

Zap-Map Board update

As announce on 10 March 2022, Nigel Pocklington has been appointed Chair of Zap-Map. He takes over the
role from Good Energy Founder and Non-Executive Director Juliet Davenport, who now steps down from the
Zap-Map Board. Nigel bolsters the Board’s expertise in building successful online platform businesses, together
he and existing independent Non-Executive Director Tim Jones have a wealth of experience from leadership
roles at AutoTrader, Moneysupermarket.com Group and Hotels.com.

Approved by the Board of Directors

Nigel Pocklington

Chief Executive Officer

27 April 2022

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Governance Report

Statement of Directors’ responsibilities
in respect of the annual report and the
financial statements

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) in conformity with
the requirements of the Companies Act 2006
have been followed for the Group financial
statements and IFRSs 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 and parent company financial statements
in accordance with IFRSs in conformity with the
requirements of the Companies Act 2006.

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.

Will Whitehorn

Chairman

“The Directors submit their
Annual Report and Accounts for
Good Energy Group plc for the
year ended 31 December 2021”

The Directors submit their Annual Report and
Financial Statements (Annual Report and Accounts)
for Good Energy Group plc for the year ended
31 December 2021. The directors’ report required
under the Companies Act 2006 comprises this
Governance & Directors’ Report and the Nomination
& 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.

108

Good Energy Annual Report 2021liabilities of Directors in relation to the Annual Report
and Accounts are subject to the limitations and
restrictions provided by such law.

Will Whitehorn

Chairman

On behalf of the Board

27 April 2022

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,
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 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

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Governance Report

Independent Auditors’ report to the
members of Good Energy Group plc

Opinion

We have audited the financial statements of Good Energy Group Plc (the ‘parent company’) and its
subsidiaries (the ‘group’) for the year ended 31 December 2021 which comprise the 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, and notes 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 UK-
adopted international accounting standards and, as regards the parent company financial statements,
as applied in accordance with the provisions of the Companies Act 2006.

In our opinion, 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 2021 and of the group’s loss for the year then ended;

have been properly prepared in accordance with UK-adopted international accounting standards and,
as regards the parent company financial statements, as applied in accordance with the provisions of the
Companies Act 2006; and

•

have been prepared in accordance with the requirements 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. We are independent of the group and the
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 SME 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.

Conclusions relating to going concern

In auditing the financial statements, we have concluded that the directors’ use of the going concern basis of
accounting in the preparation of the financial statements is appropriate.

In addition to those matters set out in the “Key audit matters” section below, we identified going concern
of the group and of the parent company as an area of audit focus The current energy crisis has seen
multiple energy suppliers becoming insolvent following the significant increase in wholesale prices for gas
and electricity. Due to this, there is a potential risk for companies operating in the energy sector for their
ability to continue to operate as a going concern.

Our audit procedures to evaluate the directors’ assessment of the group’s and the parent company’s
ability to continue to adopt the going concern basis of accounting included but were not limited to:

•

Undertaking an initial assessment at the planning stage of the audit to identify events or
conditions that may cast significant doubt on the group’s and the parent company’s ability
to continue as a going concern.

• Obtaining an understanding of the relevant controls relating to the directors’ going concern assessment.

•

Evaluating the directors’ method to assess the group’s and the parent company’s ability to continue
as a going concern.

Reviewing the directors’ going concern assessment, which incorporated severe but plausible scenarios,
based on OFGEM stress testing and as submitted to and reviewed by OFGEM.

Evaluating the key assumptions used and judgements applied by the directors in forming their conclusions
on going concern, including hedging position, derogation from the OFGEM price cap and forecasted gas
and electricity prices in the going concern assessment period.

110

Good Energy Annual Report 2021•

Reviewing the appropriateness of the directors’ disclosures in the financial statements which details the
results of the OFGEM stress testing and why the scenario in which a breach of the bank facility is deemed
to be not a plausible scenario.

Based on the work we have performed, including the review of the results of the stress testing as disclosed in
note 1 to the financial statements, which was based upon the scenarios requested by OFGEM we have noted
that the current performance are in line with budget and the OFGEM central price scenario, rather than the
extreme scenarios in the OFGEM modelling. We have not identified any material uncertainties relating to
events or conditions that, individually or collectively, may cast significant doubt on the group’s and the parent
company’s ability to continue as a going concern for a period of at least twelve months from when
the financial statements are authorised for issue.

Our responsibilities and the responsibilities of the directors with respect to going concern are described in the
relevant sections of this report.

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Governance Report

Key audit matters

Key audit matters are those matters that, in our professional judgement, 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) we identified, including 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
forming our opinion thereon, and we do not provide a separate opinion on these matters.

The matters set out below are in addition to going concern which, as set out in the “Conclusions relating to
going concern” section above, was also identified as a key audit matter.

Key Audit Matter

How our scope addressed this matter

Revenue recognition, specifically the estimated
unbilled income.

The group’s accounting policy in respect of revenue
recognition is set out in the accounting policy note
2.5 and also the critical accounting estimates in
relation to this in note 4.2.1.

The group’s primary revenue streams relate to the
provision of gas and electricity supply, of which a
significant proportion is accrued revenue at the
year-end based up an estimation of the amount of
unbilled charges at the year end, being £24.4m in
2021 compared to £16.4m in 2020 largely as a result
of the increased prices in Quarter 4 of 2021.

The accrued income is calculated using system-
generated information based on industry expected
usage per property, customer tariffs and seasonality
variations, the approach has been modified since the
prior year.

For commercial customers the amounts are
calculated using industry accepted norms from
the software provider with no management
over-ride or assumptions included.

For domestic customers there is an internally
developed IT report which calculates the accrued
income based on management assumptions around
seasonality and, where information if not available
for a small number of customers, estimates of the
tariff and usages.

Due to the accrued income being an estimation
there is a high risk of management bias.

Our response

Our procedures over revenue recognition in
particular around the cut-off and accrued
income included, but were not limited to:

• Obtained an understanding of the processes
and controls over the recognition of revenue
and performing walk-through procedures
to validate that controls were appropriately
designed and implemented.

•

Performed IT general and application controls
work around the commercial billing system.

• Confirmed that revenue is being recognised

in the correct period by recalculating for a
sample of customers, across both domestic
and commercial, the accrued income based
on the last billed date and expected usage up
until the year-end.

•

Verified the tariff inputs used in the accrued
income and revenue calculations are correct.

• Compared a sample of accrued income

balances to bills raised post year-end where
there were actual meter reads to check the
accuracy of the estimated usage and revenue
recorded in relation to this.

•

Performed a code review on the internally
written IT report which calculates the domestic
customers accrued income balance to ensure
it is achieving its intended aims and that the
management assumptions included therein
are reasonable.

Our observations

Our work performed in relation to the accrued
income reports confirmed that the calculation
of the year end accrued income is appropriate
performed. Based on substantive testing of post
year end invoices no material issues were noted
in respect of the accrued income calculated at
the year end.

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Good Energy Annual Report 2021
Key Audit Matter

How our scope addressed this matter

Expected Credit Losses

Our response

Expected credit losses are disclosed in
accounting policies 3.1.3 and 4.2.2 and in
Note 20 of the Financial Statements.

There is an expected credit loss (ECL) provision
of £11.8m (2020:£8.9m) at the year-end against
gross amounts receivable from customers of
£47.6m (2020: £34.3m).

The simplified approach to ECL under IFRS 9 was
calculated using a provision matrix to calculate
ECL for trade receivables and unbilled revenue.
Management’s judgement is used to determine the
future likely recovery rates based on days past due
for groupings of various customer segments that have
similar loss patterns and the Group’s historic observed
default rates, calibrated to adjust the historic credit
loss experience with forward-looking information.

ECL are sensitive to changes in circumstances
and of forecasted economic conditions. Therefore,
there is high estimation uncertainty and the actual
credit losses may vary greatly from expected due to
unforeseen circumstances.

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.

Our response over expected credit losses included,
but were not limited to:

• Obtained management’s calculation of the
ECL provision and tested the mathematical
accuracy of the provisioning method as
well as testing the accuracy of the analysis
of debt collection rates being used to verify
they were appropriate.

•

Tested the ageing of trade debtors.

Reviewed and challenged the key assumptions
used by management around collection rates,
segmentation and overlays and performed
sensitivity analysis on the impact of these rates
on the ECL provision.

Performed analysis of the year-end debt
balance collection rates to determine if there
have been any unexpected movement post
year-end that are not in line with the provision
rates used.

Our observations

Having assessed management’s judgements,
the integrity of data driving the calculations and
performing sensitivity analysis we can conclude that
the ECL provision is appropriate. We are satisfied
that the disclosure in the financial statements fairly
reflects the approach and assumptions used.

Zap-Map goodwill

Our response

The impairment considerations in regards to the
goodwill and other assets relating to Zap-Map, via
the group’s investment in their subsidiary Next Green
Car Limited, are disclosed in accounting policy 4.2.5.

The value of Zap-Map within the consolidated
accounts is £1.4m held within intangibles in Note
17 of the Financial Statements.

The Group is required to test the Zap-Map for
impairment Given the Zap-Map app is in early
in its lifecycle there is a risk of management bias in
the valuation model used to support the carrying
value of the assets of Zap-Map in the consolidated
balance sheet.

Our response over the impairment considerations
of Zap-Map included, but were not limited to:

•

Held discussions with Zap-map management to
understand future plans and scenario planning
undertaken to support the value held and the
assumptions made within the DCF model used
to support the headroom for the goodwill.

Involved the Mazars internal valuations team to
perform procedures over the valuation model.
This included evaluation of the mathematical
accuracy of the discounted cash flow (DCF)
model as well as reasonableness of the
assumptions used therein compared to industry
norms for the growth rates, discount rate and
terminal value. We also performed sensitivity
analysis on the assumptions used.

• Compared the valuation model produced

by the group against an externally produced
valuation on the Zap-Map business.

•

Reviewed the disclosure in the financial
statements with respect to this balance.

Our observations

We have concluded that the assumptions used in
the valuation model used for impairment purposes
was appropriate.

113

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Our application of materiality and an overview of the scope of our audit

The scope of our audit was influenced by our application of materiality. We set certain quantitative thresholds
for materiality. These, together with qualitative considerations, helped us to determine the scope of our audit
and the nature, timing and extent of our audit procedures on the individual financial statement line items and
disclosures and in evaluating the effect of misstatements, both individually and on the financial statements as
a whole. Based on our professional judgement, we determined materiality for the financial statements as a
whole as follows:

Group materiality

Overall materiality

£1.1m

How we determined it

The overall materiality level has been determined with reference to a
benchmark of revenue.

Rationale for benchmark
applied

In our view, the above measure is the most relevant measure of the underlying
performance of the company in a year where wholesale energy prices have
increased significantly and earnings have been volatile and therefore, has
been selected as the materiality benchmark. The percentage applied to this
benchmark is 0.75%.

Performance materiality

Performance materiality is set to reduce to an appropriately low level
the probability that the aggregate of uncorrected and undetected
misstatements in the financial statements exceeds materiality for the
financial statements as a whole.

We set performance materiality at £0.6m, which represents 55% of
overall materiality.

Reporting threshold

We agreed with the directors that we would report to them misstatements
identified during our audit above £0.03m as well as misstatements below that
amount that, in our view, warranted reporting for qualitative reasons.

Parent company materiality

Overall materiality

£0.4m

How we determined it

The overall materiality level has been determined with reference to a
benchmark of net assets.

Rationale for benchmark
applied

Net assets is deemed the most appropriate measure given the parent company
is an investment holding company with no revenue. The percentage applied to
this benchmark is 2%.

Performance materiality

We set performance materiality at £0.2m, which represents 60% of
overall materiality.

Reporting threshold

We agreed with the directors that we would report to them misstatements
identified during our audit above £0.01m as well as misstatements below that
amount that, in our view, warranted reporting for qualitative reasons.

114

Good Energy Annual Report 2021

As part of designing our audit, we assessed the risk
of material misstatement in the financial statements,
whether due to fraud or error, and then designed
and performed audit procedures responsive to those
risks. In particular, we looked at where the directors
made subjective judgements, such as assumptions
on significant accounting estimates.

We tailored the scope of our audit to ensure that
we performed sufficient work to be able to give
an opinion on the financial statements as a whole.
We used the outputs of our risk assessment, our
understanding of the group and the parent company,
their environment, controls, and critical business
processes, to consider qualitative factors to ensure
that we obtained sufficient coverage across all
financial statement line items.

Our group audit scope included an audit of the
group and the parent company financial statements.
Based on our risk assessment, we treated the Good
Energy Generation Assets No. 1 (GEGAN) sub-group
as one component and then all components of the
group, including the parent company, were subject to
full scope audit performed by the group audit team.

At the parent company level, the group audit
team also tested the consolidation process and
carried out analytical procedures to confirm
our conclusion that there were no significant
risks of material misstatement of the aggregated
financial information.

Other information

The other information comprises the information
included in the annual report 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 our report, we do not
express any form of assurance conclusion thereon.

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 course of audit or
otherwise appears to be materially misstated. If we
identify such material inconsistencies or apparent
material misstatements, we are required to determine
whether this gives rise to a material misstatement in
the financial statements themselves. If, based on the
work we have performed, we conclude that there is
a material misstatement of this 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 the directors’ report
have been prepared in accordance with
applicable legal requirements.

Matters on which we are required
to report by exception

In 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 108 to 109, 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’s and the
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

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Governance Report

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 the financial statements.

The extent to which our procedures are
capable of detecting irregularities, including
fraud is detailed below.

Irregularities, including fraud, are instances of
non-compliance with laws and regulations. We
design procedures in line with our responsibilities,
outlined above, to detect material misstatements
in respect of irregularities, including fraud.

Based on our understanding of the group and the
parent company and their industry, we considered
that non-compliance with the following laws and
regulations might have a material effect on the
financial statements: employment regulation, health
and safety regulation, anti-money laundering
regulation and OFGEM regulations.

To help us identify instances of non-compliance
with these laws and regulations, and in identifying
and assessing the risks of material misstatement in
respect to non-compliance, our procedures included,
but were not limited to:

•

Inquiring of management and, where
appropriate, those charged with governance, as
to whether the group and the parent company
is in compliance with laws and regulations,
and discussing their policies and procedures
regarding compliance with laws and regulations.

•

Inspecting correspondence, if any, with relevant
licensing or regulatory authorities.

• Communicating identified laws and regulations

to the engagement team and remaining alert to
any indications of non-compliance throughout
our audit.

• Considering the risk of acts by the group and
the parent company which were contrary to
applicable laws and regulations, including fraud.

We also considered those laws and regulations
that have a direct effect on the preparation of the
financial statements, such as tax legislation, pension
legislation, the Companies Act 2006.

In addition, we evaluated the directors’ and
management’s incentives and opportunities
for fraudulent manipulation of the financial
statements, including the risk of management
override of controls, and determined that the
principal risks related to posting manual journal
entries to manipulate financial performance,
management bias through judgements and
assumptions in significant accounting estimates,
in particular in relation to provision for expected
credit losses, power purchase costs, impairment
of indefinite life assets, revaluation of generation
assets, revenue recognition (which we pinpointed
to the cut-off assertion), and significant one-off
or unusual transactions.

116

Our audit procedures in relation to fraud included but
were not limited to:

• Making enquiries of the directors and

management on whether they had knowledge
of any actual, suspected or alleged fraud.

• Gaining an understanding of the internal controls
established to mitigate risks related to fraud.

• Discussing amongst the engagement team

the risks of fraud.

• Addressing the risks of fraud through
management override of controls by
performing journal entry testing.

There are inherent limitations in the audit procedures
described above and the primary responsibility
for the prevention and detection of irregularities
including fraud rests with management. As with
any audit, there remained a risk of non-detection of
irregularities, as these may involve collusion, forgery,
intentional omissions, misrepresentations or the
override of internal controls.

The risks of material misstatement that had the
greatest effect on our audit are discussed in the
“Key audit matters” section of this report.

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

Use of the audit 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.

Jonathan Barnard
(Senior statutory auditor)

For and on behalf of Mazars LLP

Chartered Accountants and Statutory Auditor

90 Victoria St

Bristol

BS1 6DP

27 April 2022

Good Energy Annual Report 2021S
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118118 Good Energy Annual Report 2021

Good Energy Annual Report 2021Financial 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

120

122

124

126

129

130

131

132

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Financial Statements

119119

Financial statements

Consolidated Statement of Comprehensive Income

For the year ended 31 December 2021

2021

Note

Underlying

2021
Non-
underlying
items (note 7)

2021

2020
Restated
Underlying

2020

Non-

underlying

items (note 7)

2020

Restated

£000’s

(Loss)/profit for the year

(3,246)

(653)

(3,899)

407

(386)

Revenue

Cost of sales

Gross profit

Administrative expenses

Operating profit/(loss)

Finance income

Finance costs

Share of loss of associate

Profit/(loss) before tax

Taxation

Profit/(loss) for the year
from continuing operations

Loss from discontinued
operations, before tax

Taxation on discontinued
operations

Attributable to:
Good Energy Group PLC

Attributable to:
Non-controlling Interests

(Loss)/Earnings per
share

146,045

(119,019)

27,026

(23,816)

3,210

(584)

2,640

(340)

(806)

153

146,045

130,649

(119,019)

(101,065)

27,026

29,584

130,649

(101,065)

29,584

(24,622)

(25,029)

(477)

(25,506)

2,404

4,555

(477)

4,078

109

(584)

(4,172)

1,834

(187)

(13)

479

(72)

(477)

2,300

(653)

1,647

407

(386)

(6,752)

1,206

(6,752)

1,206

(2,736)

(653)

(3,389)

532

(386)

146

(510)

(125)

109

(4,172)

(13)

0.9p

Basic

(16.7p)

(4.0p)

(20.7p)

3.3p

(2.4p)

Diluted 14

(16.7p)

(4.0p)

(20.7p)

3.2p

(2.4p)

Earnings/(Loss) per
share (continuing
operations)

Basic

17.1p

(4.0p)

13.2p

3.3p

(2.4p)

0.9p

Diluted 14

17.0p

(4.0p)

13.0p

3.2p

(2.4p)

0.9p

120

Good Energy Annual Report 2021

Consolidated Statement of
Comprehensive Income (continued)

For the year ended 31 December 2021

2021

Note

Underlying

2021
Non-
underlying
items
(note 7)

2021

2020
Restated
Underlying

2020

Restated

2020

Non-

underlying

items

(note 7)

£000’s

(Loss)/profit for the year

(3,246)

(653)

(3,899)

407

(386)

Other comprehensive income

Other comprehensive income
that will not be reclassified to
profit or loss in subsequent
periods (net of tax).

Other comprehensive income
for the year, net of tax (this
relates to the revaluation of
generation sites)

Total comprehensive income for
the year attributable to owners
of the parent company

Attributable to:
Good Energy Group PLC

Attributable to:
Non-controlling Interests

677

13,313

(2,569)

(653)

(3,222)

13,720

(386)

13,334

(2,059)

(653)

(2,712)

13,845

(386)

13,459

(510)

(125)

The notes on pages 132 to 198 form part of these financial statements.

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121

Financial statements

Consolidated Statement of Financial Position

As at 31 December 2021

Good Energy Group plc
Company registered no: 04000623

Note

2021

2020 Restated

£000’s

Non-current assets

Property, plant and equipment

Right of use assets

Intangible assets

Deferred tax asset

Restricted deposit accounts

Total non- current assets

Current assets

Inventories

Trade and other receivables

Restricted deposit accounts

Cash and cash equivalents

Total current assets

Held for sale assets

TOTAL ASSETS

Equity and liabilities

Capital and reserves

Called up share capital

Share premium account

Employee Benefit Trust shares

Revaluation Surplus

Retained earnings

Total equity attributable to members of the Parent
Company

Non-controlling interest

Total equity

Non- current liabilities

Deferred taxation

Borrowings

Provisions for liabilities

122

209

851

3,891

173

5,124

7,682

35,928

2,414

6,699

52,723

64,798

58,602

5,108

4,833

4,552

73,095

13,264

26,715

698

18,282

58,959

122,645

132,054

840

12,790

(444)

11,693

4.774

29,653

(325)

29,328

5,066

833

12,790

(502)

12,472

6,854

32,447

185

32,632

4,135

53,431

1,316

Good Energy Annual Report 2021Long term financial liabilities

Total non- current liabilities

Current liabilities

Borrowings and other financial liabilities

Trade and other payables

Total current liabilities

Liabilities associated with assets held for sale

Total liabilities

5,066

2,118

40,911

43,029

45,223

93,318

58,895

3,630

36,897

40,527

99,422

TOTAL EQUITY AND LIABILITIES

122,646

132,054

The financial statements on pages 120 to 198 were approved by the Board of Directors on 27 April 2022 and
signed on its behalf by:

Nigel Pocklington

Chief Executive
27 April 2022

The notes on pages 132 to 198 form part of these financial statements.

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Financial statements

Parent Company Statement of Financial Position

As at 31 December 2021

Good Energy Group plc

Company registered no: 04000623

Note

2021

£000’s

311

3,275

1,250

4,839

236

496

20,398

21,130

25,969

840

12,790

(444)

4,276

17,462

2020

£000’s

313

5,880

22,054

28,251

176

4,948

5,124

33,375

833

12,790

(502)

2,424

15,545

Non-current assets

Intangible assets

Deferred taxation

Investment in subsidiaries

Investment in group undertakings

Total non- current assets

Current assets

Trade and other receivables

Cash and cash equivalents

Held for sale assets

Total current assets

TOTAL ASSETS

Equity and Liabilities

Capital and reserves

Share capital

Share premium account

Employee Benefit Trust shares

Retained Earnings

Total Equity

124

Good Energy Annual Report 2021Non- current liabilities

Long term financial liabilities

Borrowings

Total non- current liabilities

Current liabilities

Borrowings and other financial liabilities

Trade and other payables

Total current liabilities

Total liabilities

TOTAL EQUITY AND LIABILITIES

4,749

3,264

495

3,759

8,505

25,969

16,338

16,351

1,089

390

1,479

17,830

33,375

The Parent Company’s profit for the financial year was £1,998,000 (2020: profit of £729,000). The financial
statements on pages 120 to 198 were approved by the Board of Directors on 27 April 2022 and signed on its
behalf by:

Nigel Pocklington

Chief Executive
27 April 2022

The notes on pages 132 to 198 form part of these financial statements.

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Financial statements

Consolidated Statement of Changes in Equity

For the year ended 31 December 2021

Note

Share
capital

Share
premium
account

EBT
shares

Retained
earnings

Revaluation
surplus

Total equity
attributable
to members
of the Parent
Company

Non-
controlling
interest

Total
equity

£000’s

£’000

£000’s

832

12,790

(549)

5,707

2.1

136

832

12,790

(549)

5,843

18,780

136

18,916

18,780

136

18,916

146

(125)

13,313

146

13,313

13,459

(125)

13,334

(15)

841

(841)

310

At 1 January
2020 as
previously
stated

Prior year
adjustment

At 1 January
2020 as
restated

Profit/(Loss)
for the year

Other
comprehensive
income for
the year

Total
comprehensive
income for
the year

Share based
payments

Exercise
of options

Acquisition
of subsidiary

Transfer of
revaluation
to retained
earnings

126

Good Energy Annual Report 2021S
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Total
contributions
by and
distributions
to owners of
the parent,
recognised
directly
in equity

At 31
December
2020

865

(841)

310

382

833

12,790

(502)

6,854

12,472

32,447

185

32,632

The notes on pages 132 to 198 form part of these financial statements.

127

Financial statements

Consolidated Statement of
Changes in Equity (continued)

For the year ended 31 December 2021

Note

Share
capital

Share
premium
account

EBT
shares

Retained
earnings

Revaluation
surplus

Total equity
attributable
to members
of the
Parent
Company

Non-
controlling
interest

Total
equity

£000’s

£’000

£000’s

833

12,790

(502)

6,854

12,472

32,447

185

32,632

At 1 January
2021

Loss for the year

Other
comprehensive
income for
the year

Total
comprehensive
income for
the year

Exercise
of options

Dividend paid

Transfer of
revaluation to
retained earnings

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

At 31 December
2021

(3,389)

(510)

(4,899)

677

(2,712)

677

(2,712)

(510)

(3,222)

(40)

(108)

779

(779)

631

(779)

(83)

(108)

(83)

840

12,790

(444)

4,773

11,693

29,652

(325)

29,327

The notes on pages 132 to 198 form part of these financial statements.

128

Good Energy Annual Report 2021Parent Company Statement of Changes in Equity

For the year ended 31 December 2021

Note

Share
capital

Share
premium
account

EBT
shares

Retained
earnings

Total
equity

£000’s

At 1 January 2020

833

12,790

(549)

1,671

14,745

Profit for the year and total
comprehensive income

Share based payments

Exercise of options

Dividend paid

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

729

(15)

At 31 December 2020

833

12,790

(502)

2,424

15,545

At 1 January 2021

833

12,790

(502)

2,424

15,545

Profit for the year and total
comprehensive income

Share based payments

Exercise of options

Dividend paid

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

1,998

(39)

(108)

(147)

(82)

At 31 December 2021

840

12,790

(444)

4,275

17,461

The notes on pages 132 to 198 form part of these financial statements.

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129

Financial statements

Consolidated Statement of Cash Flows

For the year ended 31 December 2021

Note

Cash flows from operating activities

Cash generated from operations

Finance income

Finance cost

Income tax received

Net cash flows generated from operating activities

Cash flows from investing activities

Purchase of property, plant and equipment

Purchase of intangible fixed assets

Withdrawal of deposits from restricted accounts

Acquisition of subsidiary

Net cash flows generated from/(used in)
investing activities

Cash flows from financing activities

Payments of dividends

Proceeds from borrowings

Repayment of borrowings

Capital repayments of leases

Proceeds from sale of share options

Net cash flows used in financing activities

Net (decrease)/increase in cash and
cash equivalents

Cash and cash equivalents at beginning of year

Cash and cash equivalents at end of year

Cash and cash equivalents for discontinued
operations at end of year

The notes on pages 132 to 198 form part of these financial statements.

2021

£000’s

3,901

620

(2,902)

1,619

(248)

(760)

1,971

963

(108)

6,786

2020

£000’s

11,425

(3,735)

7,775

(4)

(473)

(228)

107

(598)

(18,076)

(2,184)

(616)

(411)

(11,988)

(2,562)

(9,408)

18,282

6,699

2,175

4,615

13,667

18,282

130

Good Energy Annual Report 2021Parent Company Statement of Cash Flows

For the year ended 31 December 2021

Cash flows from operating activities

Cash used in operations

Interest paid

Net cash flows used in operating activities

Cash flows from investing activities

Investment in subsidiaries

Cash dividend received

Net cash flows generated from/(used in)
investing activities

Cash flows from financing activities

Proceeds from intercompany loans

Proceeds from the exercise of share options

Payments of dividends

Repayments of borrowings

Repayments of intercompany loans

Net cash (used in)/generated from
financing activities

Net decrease in cash and cash equivalents

Cash and cash equivalents at beginning of year

Cash and cash equivalents at end of year

Note

2021

£000’s

(1,829)

(724)

(2,553)

(1,250)

5,917

4,667

1,159

(108)

(11,905)

4,261

(6,567)

(4,452)

4,948

496

2020

£000’s

(2,365)

(640)

(3,005)

(200)

2,517

2,550

(655)

5,603

4,948

The notes on pages 132 to 198 form part of these financial statements.

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131

Financial statements

Notes to the Financial Statements

1. General Information

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 Good Energy, Monkton Park Offices, Monkton Park,
Chippenham, Wiltshire, United Kingdom, SN15 1GH.

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, 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, and the
sale of EV market data services.

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) 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, except for Generation sites (classified as Property, plant and equipment) that have been
measured under the revaluation model, 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).

The accounting policies adopted, other than as documented above, are consistent with those of the annual
financial statements for the year ended 31 December 2020, as described in those financial statements.

132

Good Energy Annual Report 2021Notes to the Financial Statements

2. Summary of Significant Accounting Policies (continued)

2.1 Basis of preparation of financial statements (continued)

There are two prior year adjustments, described and detailed in the tables below.

The elimination of Renewable Obligation Certificates (ROCs) which were generated within the group, and
an offsetting reduction in the ROC compliance provision (where our obligation can be met by using £0 value
ROCs), noted by the Group’s new auditors.

Adjustments to the treatment of leases under IFRS 16 being the removal of future lease payment increases
where the increase is determined by a future index rate, as a result of a prior year adjustment to align with the
accounting standard, noted by the Group’s new auditors.

At 31
December
2020

Prior year
adjustment
2019 & 2020

At 31
December
2020
(restated)

At 31
December
2019

Prior year
adjustment
2019

At 31
December
2019
(restated)

£000’s

Balance sheet
(extract)

Right-of-use
assets

5,924

(816)

5,108

6,483

(834)

5,649

8,451

Inventories

14,625

(1,361)

13,264

9,941

(1,490)

Total assets

134,231

(2,177)

132,054

116,364

(2,324)

114,040

Borrowings
Lease Liabilities

Trade and
other payables

5,343

(1,036)

4,307

5,316

(970)

4,346

38,258

(1,361)

36,897

35,487

(1,490)

33,997

Total liabilities

101,819

(2,397)

99,422

97,584

(2,460)

95,127

Retained
earnings

6,634

220

6,854

5,707

136

5,843

At 31 December
2020

Prior year
adjustments

At 31 December 2020
(restated)

Statement of Comprehensive
Income (extract)

Cost of sales

Finance costs

(Loss)/profit before tax

£000’s

(101,082)

(4,239)

(82)

(101,065)

(4,172)

133

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Financial statements

Notes to the Financial Statements

2. Summary of Significant Accounting Policies (continued)

2.2 Basis of consolidation

The consolidated financial statements comprise the financial statements of the Group and its subsidiaries as
at 31 December 2021. 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.

134

Good Energy Annual Report 2021Notes to the Financial Statements

2. Summary of Significant Accounting Policies (continued)

2.3 Going concern

The financial statements have been prepared on the going concern basis 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.

The Group has had a resilient financial performance despite significant pressure from commodity
markets and low wind levels, impacting on the year’s performance.

The cash released through the sale of the generation asset portfolio completed January 2022,
has provided the Group with £20.7m of unrestricted cash to date with a further £0.5m of deferred
consideration due in June 2022.

Looking to the future, the Group has performed a going concern review, going out until June 2023,
considering both an internal base case, and various externally provided scenarios. The scenarios were
provided by Ofgem in February 2022 as part of their review into the financial stability of UK Energy
suppliers. Having reviewed this forecast, and having applied a reverse stress test, the possibility that
financial headroom could be exhausted is remote.

The scenarios are a combination of price and demand-based impacts reflecting the volatility in the
wholesale and supply market currently. All scenarios include the same base hedge position for Good Energy
as that is what is in place at time of publishing this assessment. (We are well hedged for summer 2022 and
plan to incrementally increase hedging for winter 2022). All scenarios assume domestic customer churn
continues at minimal levels (Q4 2021 <5% versus 15%+ prior to H2 2021). Churn is expected to remain low until
wholesale prices stabilise and the default price cap catches up to be fully reflective of the wholesale costs of
power and gas seen by suppliers.

The scenarios are:

Scenario 1 - Low Price

Scenario 2 - Central Price

Scenario 3 - High Price

Scenario 4 - High Price with 3-month demand shock Q1 2023 (15% increase in gas usage vs monthly
norms, 2% increase in electricity usage vs monthly norms)

Scenario 4a – High Price with 1 month demand shock (Non OFGEM Scenario. 15% increase in gas
usage vs monthly norms, 2% increase in electricity usage vs monthly norms)

Scenario 5 – Extreme Price

The wholesale prices covered by these scenarios are demonstrated in the below chart. Whilst the chart
reflects gas wholesale costs, the chart for electricity wholesale costs looks very similar as gas powered power
stations help set electricity wholesale prices.

Going Concern - Gas (p/therm) Commodity Cost Development

750

600

450

300

150

Apr-22

May-22

Jun-22

Jul-22

Aug-22

Sep-22

Oct-22

Nov-22

Dec-22

Jan-23

Feb-23

Mar-23

Apr-23

May-23

Jun-23

Mid

Low

High

High + 3 Month Demand Shock

Mar 21st 2022 Fwd Commodity Curve

Extreme

135

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Financial statements

Notes to the Financial Statements

2. Summary of Significant Accounting Policies (continued)

2.3 Going concern (continued)

From a tariff perspective all scenarios reflect the movement in default/deemed price capped tariffs directly
linked to wholesale costs developments. However only in the High & Extreme price scenarios are SVT price
rises assumed. As Good Energy has a derogation from the price cap, it is allowed to change the level of its
Standard Variable tariff (SVT) tariff to reflect the true cost of supplying renewable energy. This derogation
allows Good Energy to change price sooner than changes to default/deemed tariff changes, allowing us to
match more effectively between cash in and cash out of the business. This derogation remains in place until
the end of the Ofgem price cap, currently planned for Dec 2023.

In all scenarios except Scenario 4, cashflow remains sufficient to meet all commitment as they fall due without
additional mitigations being implemented. In Scenario 4 additional mitigations would be required, however
the business is confident sufficient mitigations could be delivered if required. These mitigations could include
discretionary costs reductions, additional prices increase as well as working capital optimisation. In addition,
the business believes a 3-month demand shock to be excessive, demand shocks seen previously such as “beast
from the East” tend to cause a one-month exceptional impact only.

Other impacts not included in the modelling include low wind output levels in a year. The company hedges
to seasonal normal levels of wind, solar and temperature. 2021 was a year of significantly lower wind than
seasonally normal which had a negative financial impact on the business. However, the business has not
modelled this as a going concern scenario for two reasons. The first is modelling to seasonal norms will work
over a longer-term basis, and secondly, we have taken steps to mitigate the impacts of low wind within our
portfolio from 2022 onwards.

All scenarios modelled include repayment of £0.2m of Bond debt in June 2022. The earliest the remaining
bond debt of £4.7m can be requested for repayment is June 2023, although experience suggests the amount
formally requested to be repaid at this point will be in the hundreds of thousands only. Excluding bond debt,
the business has no other material (£1m+) debt repayments due in the next 18 months.

Therefore, Directors are confident in the ongoing stability of the Group, and its ability to continue operation
and meet its commitments as they fall due over the going concern period. Accordingly, the Directors adopt
the going concern basis in preparing the financial statements

136

Good Energy Annual Report 2021

Notes to the Financial Statements

2. Summary of Significant Accounting Policies (continued)

2.5 Revenue recognition

The Group is in the business of providing supplies of electricity and gas, the generation of power, the sale of
advertising space and EV market data, 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 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. 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.

10% 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, Barrow Shipping
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.

Power supply revenue is split between the electricity and gas segments within the segmental analysis in note 6.

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. FiT revenue is included within the electricity generation segment visible in note 5.

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137

Financial statements

Notes to the Financial Statements

2. Summary of Significant Accounting Policies (continued)

2.5 Revenue recognition (continued)

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, 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.

FiT administration services is included within the FiT administration segment within the segmental analysis in
note 6.

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.

ROCs revenue is included within the electricity generation segment visible in note 5.

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 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.

Power generation revenue is included within the electricity generation segment visible in note 5.

2.5.6 Advertising revenue

The Group has contracts to provide advertising space to companies on the nextgreencar.com website and
Zap-map app. Advertising contracts are entered into for adverts to run for a set period of time, and explicitly
state the transaction price. Payment is made on receipt of bill in advance. The performance obligation for
revenue recognition is satisfied over time based upon the amount of time that the advert has been running on
the platforms. No refunds, returns or warranties are applicable.

Advertising revenue is included within the energy as a service segment within the segmental analysis in note 6.

2.5.7 Sale of EV market data

The Group sells licences for access to data feeds on the EV market and sells data insight reports. The
transaction is explicitly stated in the contract. The performance obligation for the data feed licence is satisfied
over time as the customer has a licence to access data when they require for a set contracted time period.
Payment is made on receipt of bill in advance. The performance obligation for the sale of data insight
reports is satisfied at the point in time the report is delivered to the customer. No refunds, returns or
warranties are applicable.

Sale of EV market data revenue is included within the energy as a service segment within the segmental
analysis in note 6.

138

Good Energy Annual Report 2021Notes to the Financial Statements

2. Summary of Significant Accounting Policies (continued)

2.6 Property, plant and equipment

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.

Generation assets are measured at fair value less accumulated depreciation and impairment losses
recognised after the date of revaluation. Valuations are performed with sufficient frequency to ensure that the
carrying amount of a revalued asset does not differ materially from its fair value. A valuation is completed at
least every 3 years, with a formal external valuation taking place at least every 5 years.

A revaluation surplus is recorded in OCI and credited to the asset revaluation surplus in equity. However, to the
extent that it reverses a revaluation deficit of the same asset previously recognised in profit or loss, the increase
is recognised in profit and loss. A revaluation deficit is recognised in the statement of profit or loss, except to
the extent that it offsets an existing surplus on the same asset recognised in the asset revaluation surplus.

An annual transfer from the asset revaluation surplus to retained earnings is made for the difference between
depreciation based on the revalued carrying amount of the asset and depreciation based on the asset’s
original cost. Additionally, accumulated depreciation as at the revaluation date is eliminated against the gross
carrying amount of the asset and the net amount is restated to the revalued amount of the asset.

Upon disposal, any revaluation surplus relating to the particular asset being sold is transferred to
retained earnings.

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

Generation assets

over the life of the lease

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.

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139

Financial statements

Notes to the Financial Statements

2. Summary of Significant Accounting Policies (continued)

2.7 Leases (the Group as a lessee)

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.

In the Statement of Financial Position, the Group’s lease liabilities are included within borrowings (please refer
to note 26).

140

Good Energy Annual Report 2021Notes to the Financial Statements

2. Summary of Significant Accounting Policies (continued)

2.7 Leases (the Group as a lessee) (continued)

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 net of the acquisition-date amounts of the identifiable assets acquired and the liabilities assumed, and

the aggregate of:

(i) the value of consideration transferred (at fair value),

(ii) the amount of any non-controlling interest, and

(iii) in a business combination achieved in stages, the acquisition date fair value of the acquirer's

previously held equity interest in the acquiree.

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

Website development costs

between 3 and 10 years

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.

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141

Financial statements

Notes to the Financial Statements

2. Summary of Significant Accounting Policies (continued)

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 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.

2.10 Inventories

2.10.1 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. Externally generated ROCs are valued at the
lower of purchase cost and estimated realisable value. Internally generated ROCs are not carried at cost with
a corresponding adjustment to the OFGEM accrual.

2.10.2 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.

2.11 Financial instruments

The Group uses certain financial instruments in its operating and investing activities that are deemed
appropriate for its strategy and circumstances.

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.

142

Good Energy Annual Report 2021Notes to the Financial Statements

2. Summary of Significant Accounting Policies (continued)

2.11 Financial instruments (continued)

2.11.1 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.

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.

2.11.2 Financial assets and financial liabilities at fair value through profit or loss (FVTPL) and equity instruments

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.

An equity instrument is any contract that evidences a residual interest in the assets of the Group after
deducting all of its liabilities.

2.11.3 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.

2.11.4 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

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143

Financial statements

Notes to the Financial Statements

2. Summary of Significant Accounting Policies (continued)

2.11 Financial instruments (continued)

Part of the specific asset. Details of the Group’s borrowings are included in note 25.

2.12 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.

2.13 Non-underlying costs

Non-underlying items are those that in the Directors’ view should be separately disclosed by virtue of their size,
nature or incidence to enable a full understanding of the Group’s financial performance.

2.14 Current and deferred taxation

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.

144

Good Energy Annual Report 2021Notes to the Financial Statements

2. Summary of Significant Accounting Policies (continued)

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.

2.16 Share-based payments

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.

145

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Financial statements

Notes to the Financial Statements

2. Summary of Significant Accounting Policies (continued)

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.

2.22 Changes in accounting policies and disclosures

New and amended standards and interpretations

The following new and amended standards and interpretations that are effective from 1 January 2021 have
been applied with no impact on the financial statements.

•

Interest Rate Benchmark Reform – Phase 2: Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16

• Covid-19-Related Rent Concessions beyond 30 June 2021: Amendments to IFRS 16

•

Extension of the Temporary Exemption from applying IFRS 9: Amendments to IFRS 4

146

Good Energy Annual Report 2021Notes to the Financial Statements

3. Financial and Capital Risk Management

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 2021

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

557

1,007

555

41,253

43,372

£000’s

4,748

£000’s

317

Consolidated
31 December 2020

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

1,357

4,671

624

38,258

44,910

£000’s

16,359

4,761

612

£000’s

14,940

1,280

31,221

7,942

21,732

16,220

39,163

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147

Financial statements

Notes to the Financial Statements

3. Financial and Capital Risk Management (continued)

3.1 Financial risk factors (continued)

3.1.1 Liquidity risk (continued)

Parent
31 December 2021

Less than
1 year

Between
1 and 2 years

Between
2 and 5 years

Over 5 years

Corporate bond

Lease liabilities

Loans from group companies

Trade and other payables

Total

£000’s

557

2,700

495

3,759

£000’s

4,748

£000’s

Parent
31 December 2020

Less than
1 year

Between
1 and 2 years

Between
2 and 5 years

Over 5 years

Corporate bond

Lease liabilities

Loans from group companies

Trade and other payables

Total

£000’s

1,357

390

1,774

£000’s

16,359

16,366

£000’s

IFRS 16 requires that the maturity analysis of lease liabilities are disclosed separately from the maturity analyses
of other financial liabilities.

148

Good Energy Annual Report 2021
Notes to the Financial Statements

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 2021,
no Euros (2020: no Euros) were purchased forward.

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. There were no such swaps at the year end and the interest rate risk at 31 December 2021 is
considered to be nil.

3.1.2c Commodity price risk

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 during 2021 helped 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 2021 and
31 December 2020, the Group’s trade and other receivables were classed as due within one year, details
of which are included in note 20. 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 debt collection 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.

The Group’s management would consider a default to occur should a customer debt remain unpaid after 12
months. This is appropriate due to the seasonal nature of the business and the use of direct debit as a common
method of payment. Write offs are performed on an individual customer basis upon cessation of trade in the
case of business customers, or if extensive debt collection efforts are unsuccessful.

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 debt 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.

149

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Financial statements

Notes to the Financial Statements

3. Financial and Capital Risk Management (continued)

3.2 Capital risk management

The borrowing and cash relating to the discontinued operation is not shown in this note.

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)

Less: cash in restricted deposit accounts (current)

Less: cash and cash equivalents

Net debt

Total equity

Total capital

Gearing ratio

Note

2021

£000’s

7,185

(2,414)

(6,701)

(1,931)

27,681

25,750

(7.5%)

2020

£000’s

58,097

(4,552)

(698)

(18,282)

34,565

32,412

66,977

51.6%

During 2021 the Group’s strategy was to ensure debt funding from lenders was sustainable against long term
power generation assets. These assets have highly predictable revenue streams and are considered stable for
long-term borrowing. After the year end, the Group restructured the financing on its renewable generation
asset portfolio to consolidate and simplify funding facilities (See note 35 for information on this restructuring).

The Group's borrowings are subject to maintaining covenants as defined by the debt funders. Throughout the
year ended 31 December 2021 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).

150

Good Energy Annual Report 2021
Notes to the Financial Statements

3. Financial and Capital Risk Management (continued)

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 2021.

2021

Assets

Generation sites (note 5)

Total financial assets

2020

Assets

Generation sites

Total financial assets

Level 1

£000’s

Level 1

£000’s

Level 2

£000’s

19,575

Level 2

£000’s

Level 3

£000’s

Level 3

£000’s

58,554

Total

£000’s

19,575

Total

£000’s

58,554

During the prior year, the group adopted the revaluation policy for its generation site assets recognising a
valuation of £62,045,000. The valuation was performed by Jones Lang LaSalle Limited an accredited external
independent valuer using the discounted cash flow methodology. This financial asset has been defined as
Level 3. Further details about this policy adoption can be found in Note 2.4, disclosures on the Significant
unobservable inputs and sensitivities are provided in Note 15.

During the current year, a revaluation of the generation assets was performed using the discounted cash flow
methodology on the held for sale date of 24 November 2021, followed by a valuation of fair value less costs to
sell at the year end. The offer to purchase the generation assets and the costs to sell the assets are considered
to be directly observable inputs and are therefore categorised as Level 2 in the fair value hierarchy.

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151

Financial statements

Notes to the Financial Statements

4. Critical Accounting Judgements and Estimates

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) 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.

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.

152

Good Energy Annual Report 2021Notes to the Financial Statements

4. Critical Accounting Judgements and Estimates (continued)

4.1 Judgements (continued)

4.1.2 Leases: determining if a contract contains a lease (continued)

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 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.

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 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.

17% 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, 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 identified the amount of accrued income subject to estimation uncertainty is approximately £1.1m
out of a total carrying amount of £26m held on the balance sheet at the year end included within note 20.

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).

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.

The amount of ECLs is sensitive to changes in circumstances and of forecasted economic conditions. The
group has considered external benchmarks for future macroeconomic indicators (e.g. GDP, unemployment
rates), applied against our segmented customer base to reach an estimate of the future impact caused
by changes in macro economic conditions. This overlay of macro economic indicators has resulted in an
incremental provision release of £0.4m out of a total carrying amount of £12m held on the balance sheet at
the year end. 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 20.

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153

Financial statements

Notes to the Financial Statements

4. Critical Accounting Judgements and Estimates (continued)

4.2 Estimates (continued)

4.2.2 Provision for expected credit losses of trade and intercompany receivables, and contract
assets (continued)

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. The
estimation uncertainty relates to a carrying amount of £3.4m held on the balance sheet at the year end
included within note 27.

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. The estimation uncertainty relates to a
carrying amount of £5.6m held on the balance sheet at the year end included within note 19.

4.2.5 Impairment of indefinite life assets

The carrying values of indefinite life assets included in intangible assets as disclosed in Note 17 are: goodwill of
£1,984,000 (2020: £2,369,000), and a power supply licence of £180,000 (2020: £180,000) which relates to the
subsidiary, Good Energy Ltd. In arriving at the conclusion that these assets have an indefinite life, management
have observed that the power supply license 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 indefinite life assets are held within two separate cash generating units (CGUs), £923k within Next
Green Car Ltd and £1,061k within Good Energy Ltd. Two separate impairment reviews have therefore
been carried out.

The key assumptions for value in use excluding goodwill in Next Green Car Ltd are as follows:

• Growth rate beyond five year plan: 1%

•

Pre-tax discount rate: 5%

When reviewing goodwill on Next Green Car Ltd we perform a value-in-use assessment using discounted
cashflows. This assessment is subject to significant estimation uncertainty surrounding appropriate growth
and discount rates. As a result of the impairment assessment the directors do not believe there is any reason
for impairment at this time.

The projected cash flows have been based on financial forecasts by senior management for a 10 year period
with a 5% nominal growth rate applied to periods within the forecasted period and a 1% terminal growth rate
after 10 years. This long term growth rate for Zap Map has been based on the expected long term growth rate
for the EV market. A period longer than 5 years has been used in this assessment because of expected short-
term negative net cashflows, and an expected higher growth rate in the EV market over the next 10 years
compared with the terminal growth rate. The post-tax discount rate applied to cash flow projections for Zap
Map is 30%. This post-tax cost of capital was assessed at a higher rate than all other CGUs due to Zap Map
entering its scale-up phase, as well as the specific risk characteristics of the forecast cash flows.

154

Good Energy Annual Report 2021Notes to the Financial Statements

4. Critical Accounting Judgements and Estimates (continued)

4.2 Estimates (continued)

4.2.5 Impairment of indefinite life assets (continued)

Sensitivity analysis has been conducted on the cost of capital for Zap Map an the Directors noted that an
increase in the post-tax discount rate by 6% was required before the carrying value of the CGU equalled its
recoverable amount. Also the terminal growth rate could decrease to 0% without causing an impairment.
Directors believe there to be significant headroom and therefore no impairment is required.

The key assumptions for value in use excluding goodwill in Good Energy Ltd are as follows:

• Growth rate beyond five year plan: 1.0%

•

Pre-tax discount rate: 4.75%

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. It was concluded that the future cash
flows do exceed the value of indefinite life assets, and therefore no impairment is required

Sensitivity analysis has been conducted on the cost of capital for Good Energy Ltd and the Directors
noted that an increase of the post-tax discount rate to 100% would still leave significant headroom before
impairment was required. Also the terminal growth rate could decrease to -5% with headroom remaining.
Directors believe there to be significant headroom and therefore no impairment is required.

4.2.6 Revaluation of property, plant and equipment

The Group carries its Generation sites at revalued amounts, changes in fair value are recognised in OCI,
using valuation methodology based on a discounted cash flow (DCF) model. A carrying amount of
£56,181,000 was held on the balance sheet at year end. Key assumptions are provided
in Note 15.

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155

Financial statements

Notes to the Financial Statements

5. Discontinued Operations

On 24 November 2021, the Group publicly announced the decision of its Board of Directors to sell the Good
Energy Holding Company No. 1 Limited group including its wholly owned subsidiaries (“GEGAN group”). The
sale of GEGAN group was completed on 19 January 2022. At 31 December 2021 GEGAN group was classified
as a disposal group held for sale and as a discontinued operation. The business of GEGAN group represented
the entirety of the Group’s Electricity Generation operation segment until 24 November 2021. With GEGAN
group being classified as discontinued operations, the Electricity Generation segment is no longer presented in
the segment note.

The results of GEGAN group for the year are presented below:

Revenue

Revenue from contracts with customers

FiT/ROC subsidy revenue

Inter-segment revenue

Inter-segment adjustment

Total revenue

Cost of sales

Gross Loss

Administrative Expenses

Operating Loss

Net finance income/(costs)

Impairment loss/(profit) on the
remeasurement to fair

Loss before tax from discontinued operations

Taxation benefit: Related to pre-tax loss from the
ordinary activities for the year

Loss for the year from discontinued operations

2021

£000’s

405

2,109

5,974

(5,974)

2,514

(5,250)

(2,736)

(383)

(3,119)

(2,309)

(1,324)

(6,752)

1,206

(5,546)

Restated 2020

£000’s

1,761

1,232

5,786

(5,786)

2,993

(5,509)

(2,516)

(869)

(3,385)

(3,194)

(6,579)

156

Good Energy Annual Report 2021

In accordance with IFRS 5, inter-segment revenue between the discontinued group and the continuing
business totalling £6.0m (2020: £5.8m) has been excluded from revenue. Without this adjustment, the loss
before tax for the discontinued group would have been £1.0m (2020: loss before tax of £0.8m).

The major classes of assets and liabilities of the GEGAN group classified as held for sale at 31 December
2021 are, as follows:

Non-current assets

Property, plant and equipment

Right-of-use assets

Intangible assets

Restricted deposit accounts

Total non-current assets

Current assets

Trade and other receivables

Cash and cash equivalents

Total current assets

Cost to sell

Held for sale assets

Non-current liabilities

Deferred taxation - NC

Borrowings - LT

LT Financial Liabilities

Provisions for liabilities

Total non-current liabilities

Current liabilities

Borrowings - ST

Trade and other payables

ST Financial Liabilities

Total current liabilities

Liabilities directly associated with assets held for sale

Net assets directly associated with disposal group

2021

£000’s

57,506

4,280

385

866

63,037

910

2,175

3,085

(1,325)

64,797

4,759

33,665

3,263

1,339

43,026

1,485

409

302

2,196

45,222

19,575

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Financial statements

The net cash flows of the discontinued operations in the year are as follows:

Operating

Investing

Financing

Net cash outflows

Loss per share: discontinued operations

Basic

Diluted

2021

£000’s

3,193

3,665

(7,764)

(906)

2021

£000’s

(33.8)

2020

£000’s

3,352

(3,692)

(253)

2020

£000’s

(40.2)

Write down of property plant and equipment

The recoverable amount has been taken as the final agreed sale price subsequent to the sale completion of
GEGAN group on 19 January 2022, less costs to sell. A remeasurement of discontinued operations of £1.3m
was performed at the held for sale date.

158

Good Energy Annual Report 2021
Notes to the Financial Statements
6. Segmental Analysis

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:-

•

Electricity Supply

FiT Administration

• Gas Supply

•

Electricity Generation companies (including wind and solar generation companies),

Energy as a Service (including Zap-map and nextgreencar.com),

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 in a manner similar to transactions with third parties.

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159

Financial statements

Notes to the Financial Statements

6. Segmental Analysis (continued)

Year ended 31
December 2021

Electricity
Supply

FIT
Admin-
istration

Gas
Supply

Total supply
companies

Electricity
Generation

Energy as a
Service

Holding
companies/
consolidation
adjustments

Total

£000’s

Revenue

Revenue from
contracts with
customers

FiT/ROC subsidy
revenue

116,521

5,323

23,491

145,335

Total revenue

116,587

5,323

23,491

145,401

Expenditure

Cost of sales

(103,339)

(647)

(14,851)

(118,837)

Inter-segment
cost of sales*

Inter-segment
cost of sales
adjustment

(5,974)

5,974

(5,974)

5,974

Gross profit/(loss)

13,248

4,676

8,640

26,564

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

(17,849)

(1,578)

7,137

(67)

7,070

63,415

(47,826)

15,589

1,746

643

145,979

146,045

(154)

(28)

(119,019)

(5,974)

5,974

489

(27)

27,026

(1,448)

(3,612)

(22,909)

(134)

(1)

(1,713)

(1,093)

(3,640)

2,404

(2)

(501)

(570)

(1,095)

(4,141)

1,834

633

(6,201)

57,847

(1,549)

1,281

(48,094)

(916)

(4,920)

9,753

1,749

*The corresponding intersegment revenue is associated with the Generation assets segment which is being
presented as a discontinued operation. See note 5.

160

Good Energy Annual Report 2021

Notes to the Financial Statements

6. Segmental Analysis (continued)

Year ended 31
December 2020

Electricity
Supply

FIT
Admin-
istration

Gas
Supply

Total supply
companies

Electricity
Generation

Energy as a
Service

Holding
companies/
consolidation
adjustments

Total

£000’s

Revenue

Revenue from
contracts with
customers

FiT/ROC subsidy
revenue

Inter-segment
revenue

97,385

5,467

24,462

127,314

1,761

342

1,232

5,786

129,417

1,232

(5,786)

Total revenue

97,385

5,467

24,462

127.314

8,779

342

(5,786)

130,649

Expenditure

Cost of sales

(77,826)

(600)

(16,909)

(95,335)

(5,509)

(60)

(161)

(101,065)

Inter-segment
cost of sales

(5,786)

5,786

Gross profit/(loss)

13,773

4,867

7,553

26,193

3,270

282

(161)

29,584

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

Additions to non-
current assets

(19,622)

(869)

(598)

(2,481)

(23,570)

(1,812)

(124)

(1,936)

4,759

2,401

(316)

(2,766)

4,078

(42)

(3,194)

(827)

(4,063)

(13)

4,717

(793)

(316)

(3,606)

54,502

73,815

41,217

61,723

13,285

12,092

899

320

215

105

4,778

133,415

(2,372)

100,783

7,150

32,632

928

All turnover arose within the United Kingdom.

Consolidation adjustments relate to inter-company sales of generated electricity and the elimination of
inter-company balances.

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161

Financial statements

Notes to the Financial Statements

7. Operating Profit and Administrative Expenses

Note

The operating profit is stated after charging:

Depreciation of property, plant and equipment

Depreciation of right of use assets

Amortisation of intangible assets

Auditors’ remuneration

Audit of parent and consolidated financial statements

Audit of subsidiaries

Additional fees in relation to 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

Depreciation and amortisation

WIP writedown

Impairment loss

Revaluation loss

(Loss)/Gain on disposals

Total

Split between:

Continuing administrative expenses

Non-underlying costs

Total

162

2021

£000’s

516

1,133

109

108

225

2020

£000’s

3,621

856

1,218

132

143

353

12,090

11,475

2,772

1,739

3,143

3,134

1,713

(7)

3,080

1,344

2,783

3,719

1,960

325

522

221

24,622

25,506

23,816

806

24,622

25,029

477

25,506

Good Energy Annual Report 2021Notes to the Financial Statements

7. Operating Profit and Administrative Expenses (continued)

Non-underlying costs in the year relate to third party and legal and professional advice in response to a
takeover bid by Ecotricity on 22 July 2021 for the entire issued ordinary share capital of Good Energy Group
PLC not already owned by Ecotricity. These costs incurred are not part of the ongoing and underlying success
of the business and have been reported separately.

Non-underlying costs in the prior year relate to our investment in a customer services technology platform
with Kraken Technologies Ltd. These costs incurred are not part of the ongoing and underlying success of the
business and have been reported separately.

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

Total expensed staff costs

2021

£000’s

9,928

1,173

515

11,616

2020

£000’s

10,719

1,024

498

12,280

Details of share based payments can be found in note 30.

No staff members were employed by the parent company during the year. The average monthly number of
employees, including the Directors, during the year was as follows:

Operations

Business services

Total management and administration

2021

Number

185

277

2020

Number

183

272

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Financial statements

Notes to the Financial Statements

10. Directors' and Key Management Remuneration

Directors’ and Key Management emoluments

Short term employee benefits

Post employment benefits

Share based payments

Total

2021

£000’s

1,118

287

1,469

2020

£000’s

1,031

1,111

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 3 Directors of the Group (2020: 3) in respect of money
purchase pension schemes.

In respect of the highest paid Director, the Group paid remuneration of £565,000 (2020: £237,000), including
contributions to money purchase pension schemes of £27,580 (2020: £28,000).

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
(2020: 21,822). The aggregate amount of gains made by current Directors or Key Management on the
exercise of share options was £474,312 (2020: £nil).

Details of the Directors’ remuneration as required by AIM rule 19 are given in the table in the Directors’
remuneration report on page 98 and are included in this note by cross reference.

11. Finance Income

Bank and other interest receivables

Fair value gains

Total finance income

2021

£000’s

2020

£000’s

109

Fair value gains in the prior year primarily relate to the write back of an initial contingent consideration liability,
set up for a product milestone target for Next Green Cars Ltd. This target failed to be met in July 2020.

164

Good Energy Annual Report 2021
Notes to the Financial Statements

12. Finance Costs

On bank loans and overdrafts

On corporate bond

Other interest payable

Interest on lease liabilities

Total finance costs

13. Taxation

Analysis of tax charge for the year

Current tax

Adjustments in respect of prior years

Adjustments in respect of assets held for sale

Total current tax (see below)

Deferred tax

Origination and reversal of temporary differences

Adjustments in respect of prior years

Total deferred tax (see note 23)

Tax on profit on ordinary activities

2021

£000’s

485

584

2021

£000’s

(35)

(25)

(979)

(15)

(994)

(1,019)

2020

£000’s

2,782

831

232

327

4,172

2020

£000’s

(66)

225

(178)

(19)

Adjustments in respect of prior year deferred tax amounts are from differences in profit before tax and
qualifying fixed assets arising on finalisation of tax computations.

Income tax expense reported in the statement of
profit and loss - continuing operations

Tax from Discontinued operations

Total tax charge for the year

2021

£000’s

187

(1,206)

(1,019)

2020

£000’s

(19)

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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 (2020: higher) than the standard rate of corporation tax in the UK of
19.00% (2020: 19.00%). The differences are explained as follows:

Accounting profit/(loss) before tax from continuing
operations

Loss before tax from discontinued operations

Accounting loss before income tax

Loss before tax multiplied by the standard rate of
corporation tax in the UK of 19.00% (2020: 19.00%)

Tax effects of:

Expenses not deductible for tax purposes

Effects of changes in tax rate

Share-based payment adjustment

Prior year adjustments

Deferred tax on losses not recognised

2021

£000’s

1,834

(6,752)

(4,918)

(934)

(61)

(79)

(50)

Total tax charge for the year

(1,019)

2020

£000’s

(82)

(16)

(244)

(19)

Factors that may affect future tax charges

The UK Budget 2021 announcements on 3 March 2021 included measures to support economic recovery as a
result of the ongoing COVID-19 pandemic. These included an increase to the UK’s main corporation tax rate to
25%, which is due to be effective from 1 April 2023. These changes were substantively enacted at the balance
sheet date and have been reflected in the measurement of deferred tax balances at the year end.

166

Good Energy Annual Report 2021
Notes to the Financial Statements

13. Taxation (continued)

Corporation tax payable

Parent Company

Consolidated

2021

2020

2021

2020

£000’s

UK Corporation Tax on profits for the year

14. (Loss)/Earnings 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 250,880
(2020: 268,270) shares held by Clarke Willmott Trust Corporation Limited in trust for the Good Energy
Group Employee Benefit Trust.

(Loss)/Profit attributable to owners of the Company
(£000’s)

Basic weighted average number of ordinary shares
(000’s)

Basic (loss)/earnings per share

Continuing operations

Profit attributable to owners of the Company
(£000’s)

Basic weighted average number of ordinary shares
(000’s)

Basic earnings per share

Consolidated

2021

(3,389)

16,399

(20.7p)

2021

2,157

16,399

13.2p

2020

146

16,350

0.9p

2020

146

16,350

0.9p

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Financial statements

Notes to the Financial Statements
14. (Loss)/Earnings per Share (continued)

Diluted

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).

The greater any such excess, the greater the dilutive effect. The average market price of the Company’s
ordinary shares during the year was 269p (2020: 184p). The dilutive effect of share-based incentives was
145,752 (2020: 395,679). The dilutive effect of share-based incentives for continuing operations was 145,752
shares (2020: 395,679 shares). The conversion of share options has an anti-dilutive effect in 2021 therefore the
basic and diluted earnings per share are presented as the same figure.

(Loss)/Profit attributable to owners of the
Company (£000’s)

Weighted average number of diluted ordinary
shares (000’s)

Diluted (loss)/earnings per share

Continuing operations

Profit attributable to owners of the Company
(£000’s)

Weighted average number of diluted ordinary
shares (000’s)

Diluted earnings per share

Discontinued operations

Consolidated

2021

(3,389)

16,544

(20.7p)

2021

2,157

16,544

13.0p

2021

Loss attributable to owners of the Company (£000’s)

(5,546)

Weighted average number of diluted ordinary
shares (000’s)

Diluted loss per share

16,544

(33.8p)

2020

146

16,746

0.9p

2020

146

16,746

0.9p

2020

(6,579)

16,746

(39.3)

168

Good Energy Annual Report 2021
Notes to the Financial Statements

15. Property, Plant and Equipment

Consolidated
Year ended 31 December 2021

Leasehold
improvements

Furniture,
fittings &
equipment

Generation
assets

Total

£000’s

Cost or valuation

At 1 January 2021

Additions

Revaluation adjustment*

Reclassified as held for sale (note 5)

677

107

1,072

120

62,045

63,457

248

(4,561)

(57,506)

At 31 December 2021

447

1,192

1,639

Accumulated depreciation

At 1 January 2021

Charge for the year

Disposals

Eliminated on revaluation*

(340)

(19)

(1,024)

(3,491)

(4,855)

(47)

(3,191)

(3,257)

6,682

At 31 December 2021

(359)

(1,071)

(1,430)

Net book value

At 1 January 2021

At 31 December 2021

121

58,554

58,602

209

* The generation assets were revalued at the held for sale date by £2,121k. This has been recognised in OCI
less deferred tax of £1,444k.

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Financial statements

Notes to the Financial Statements

15. Property, Plant and Equipment (continued)

Consolidated
Year ended 31 December 2020

Leasehold
improvements

Furniture,
fittings &
equipment

Generation
assets

Total

£000’s

Cost or valuation

At 1 January 2020

Revaluation of assets

Transfer of depreciation at revaluation date

Acquired from a subsidiary

Additions

Disposals

At 31 December 2020

Accumulated depreciation

677

1,317

(337)

340

(258)

1,072

60,721

15,914

62,715

15,914

(14,590)

(595)

62,045

63,457

At 1 January 2020

(543)

(1,256)

(14,590)

(16,389)

Transfer of depreciation at revaluation date*

Charge for the year

Impairment

Disposals

(118)

321

(12)

(5)

249

14,590

(3,491)

(3,621)

(5)

570

At 31 December 2020

(340)

(1,024)

(3,491)

(4,855)

Net book value

At 1 January 2020

At 31 December 2020

134

46,131

58,554

46,326

58,602

*This transfer relates to the accumulated depreciation as at the revaluation date that was eliminated against
the gross carrying amount of the revalued asset.

170

Good Energy Annual Report 2021Notes to the Financial Statements

16. Right of Use Assets and Leases

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:

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Financial statements

Notes to the Financial Statements

16. Right of Use Assets and Leases (continued)

Land, land
easements and
buildings

Furniture, fittings
and equipment

Generation
assets

Total

£000s

£000’s

£000s

£000’s

Consolidated
Year ended 31
December 2021

Cost

At 1 January 2021

Additions

Reassessment of lease liabilities

5,169

738

1,393

1,250

(1,250)

7,812

738

5,009

3,580

Assets held for sale (note 5)

(3,759)

At 31 December 2021

2,187

1,393

Accumulated depreciation

At 1 January 2021

(1,157)

(1,393)

(154)

(2,704)

Charge for the year*

Assets held for sale (note 5)

(702)

522

At 31 December 2021

(1,337)

(1,393)

Net book value

At 1 January 2021

At 31 December 2021

4,012

850

(55)

209

1,096

(757)

731

(2,730)

5,108

850

*The £55k generation assets charge and £186k of the land and buildings charge relates to generation assets
which is presented as part of the discontinued operations that are held for sale at the year end.

172

Good Energy Annual Report 2021
Land, land
easements and
buildings

Furniture, fittings
and equipment

Generation
assets

Total

£000s

£000’s

Notes to the Financial Statements

16. Right of Use Assets and Leases (continued)

Consolidated
Year ended 31
December 2020 (Restated)

Cost

At 1 January 2020 Restated

Reassessment of lease liabilities

At 31 December 2020

Accumulated depreciation

At 1 January 2020

Charge for the year

Impairment

4,799

370

5,169

(539)

(545)

(73)

1,393

(1,154)

(239)

At 31 December 2020

(1,157)

(1,393)

Net book value

At 1 January 2020

At 31 December 2020

4,260

4,012

239

1,250

(100)

(54)

(154)

1,150

1,096

7,442

370

7,812

(1,793)

(838)

(73)

(2,704)

5,649

5,108

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Financial statements

Notes to the Financial Statements

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

Additions

Remeasurement of Lease liabilities

Accretion of interest

Payments

Liability arising on assets held for sale

At 31 December

Current (see note 24)

Non-current (see note 24)

Total

2021

£000s

4,307

738

319

(951)

(3,565)

887

562

327

889

The maturity analysis of lease liabilities is disclosed in note 24.

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)

2021

£000s

757

319

102

Total amount recognised in the Statement of Comprehensive Income

1,270

2020

£000s

4,349

370

371

(783)

4,307

612

3,695

4,307

2020

£000s

858

371

115

1,429

During the year, the Group had the following:

•

Total cash outflows for leases of £951,000;

• 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.

174

Good Energy Annual Report 2021
Notes to the Financial Statements

16. Right of Use Assets and Leases (continued)

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
2021

Power
supply
licence

Software
licences

Website
development
costs

Goodwill

Assets under
the course of
development

Total

£000’s

Cost

At 1 January 2021

180

7,425

213

2,369

491

10,678

Acquired in business
combination

Additions

Transfers from assets under
development

Disposals

Assets held for sale (note 5)

185

(120)

(1)

(64)

At 31 December 2021

180

7,500

219

749

760

(255)

(252)

(436)

(385)

1,984

(386)

733

10,616

Accumulated
amortisation

At 1 January 2021

Charge for the year

Impairment

Disposals

At 31 December 2021

Net book value

At 1 January 2021

At 31 December 2021

(5,470)

(166)

(1,108)

(25)

(6,576)

(148)

180

1,955

924

2,369

1,984

(209)

(5,845)

209

282

733

(1,133)

254

(6,724)

4,833

3,892

175

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Financial statements

Notes to the Financial Statements

17. Intangible Assets (continued)

Consolidated
Year ended 31 December
2020

Power
supply
licence

Software
licences

Website
development
costs

Goodwill

Assets under
the course of
development

Total

£000’s

Cost

At 1 January 2020

180

6,468

149

1,446

949

9,192

Acquired in business
combination

Additions

Transfers from assets
under the course of
development

Disposals

Impairment

402

875

(320)

923

1,333

473

(939)

(320)

(209)

At 31 December 2020

180

7,425

213

2,369

282

10,469

Accumulated
amortisation

At 1 January 2020

Charge for the year

Disposals

At 31 December 2020

Net book value

At 1 January 2020

At 31 December 2020

(4,640)

(1,150)

320

(98)

(68)

(5,470)

(166)

(4,738)

(1,218)

320

(5,636)

180

1,828

1,955

1,446

2,369

949

282

4,454

4,833

Assets under the course of development relate largely to implementation costs for the customer billing system
Ensek. All amortisation amounts are included within administration expenses.

176

Good Energy Annual Report 2021
Notes to the Financial Statements

17. Intangible Assets (continued)

The carrying values of indefinite life assets included in intangible assets are: goodwill of £1,984,000 (2020:
£2,369,000), and a power supply licence of £180,000 (2020: £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 excluding goodwill in Next Green Car Ltd are as follows:

Value in use assumptions

2021

2020

Gross margin*

15%-20%

20%-30%

Growth rate beyond five year plan

Pre-tax discount rate

*Annual margins have been modelled in the five year cashflow at varying levels.

When reviewing goodwill on Next Green Car Ltd we perform a value-in-use assessment using discounted
cashflows. This assessment is subject to significant estimation uncertainty surrounding appropriate growth and
discount rates. As a result of the impairment assessment the directors do not believe there is any reason for
impairment at this time.

The projected cash flows have been based on financial forecasts by senior management for a 10 year period
with a 5% nominal growth rate applied to periods within the forecasted period and a 1% terminal growth rate
after 10 years. This long term growth rate for Zap Map has been based on the expected long term growth rate
for the EV market. A period longer than 5 years has been used in this assessment because of expected short-
term negative net cashflows, and an expected higher growth rate in the EV market over the next 10 years
compared with the terminal growth rate. The post-tax discount rate applied to cash flow projections for the
Zap Map is 30%. This post-tax cost of capital was assessed at a higher rate than all other CGUs due to Zap-
Map’s entering its scale-up phase, as well as the specific risk characteristics of the forecast cash flows.

Sensitivity analysis has been conducted on the cost of capital for Zap Map and the Directors noted that an
increase of the post-tax discount rate by 6% was required before the carrying value of the CGU equalled its
recoverable amount. Also the terminal growth rate could decrease to 0% without causing an impairment.
Directors believe there to be significant headroom and therefore no impairment is required.

The key assumptions for value in use excluding goodwill in Good Energy Ltd are as follows:

- Growth rate beyond five year plan 1.0%

- Pre-tax discount rate 4.75%

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. It was concluded that the future cash flows
do exceed the value of indefinite life assets, and therefore no impairment is required.

Sensitivity analysis has been conducted on the cost of capital for Good Energy Ltd and the Directors noted that
an increase of the post-tax discount rate to 100% would still leave significant headroom before impairment was
required. Also the terminal growth rate could decrease to -5% with headroom remaining. Directors believe there

to be significant headroom and therefore no impairment is required.

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Financial statements

Notes to the Financial Statements

18. Investments and Subsidiaries

Parent Company
Year ended 31 December 2021

Shares in Group
undertakings

Loans to Group
undertakings

£000’s

Cost and net book value

At 1 January 2021

Additions

Assets held for sale

Repayments

At 31 December 2021

5,880

(2,605)

3,275

22,054

1,250

(17,793)

(4,261)

1,250

Parent Company
Year ended 31 December 2020

Shares in Group
undertakings

Loans to Group
undertakings

£000’s

Cost and net book value

At 1 January 2020

Additions

Repayments

Disposals

At 31 December 2020

4,646

1,234

5,880

24,514

9,046

(11,506)

22,054

Total

£000’s

27,934

1,250

(20,398)

(4,261)

4,525

Total

£000’s

29,160

10,280

(11,506)

27,934

Loans to Group undertakings are repayable by 31 December 2035. Interest rates charged on these loans
range from 0.00% to 8.85%. Repayments include dividends not settled in cash.

178

Good Energy Annual Report 2021

Notes to the Financial Statements

18. Investments and Subsidiaries (continued)

The Group had the following subsidiaries at 31 December 2021 (all of which have the same registered address
as Good Energy Group PLC unless otherwise noted, which can be found within the Directors and Corporate
Resources section on the final page of this report):

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

Country of
incorporation and
place of business

Proportion of ordinary
shares directly held by
Parent Company

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 wind
turbine machinery

Development of an energy
generating asset

179

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Good Energy Mapperton
Solar Park (007) Limited

Good Energy Tidal Limited

Good Energy Development
(No.1) 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.12) Limited

Good Energy Development
(No.16) Limited

Llangyfelach Community
Solar Farm C.I.C

Worminster Down Somerset
Community Solar Farm C.I.C

Good Energy Development
(No.24) Limited

Good Energy Development
(No.26) Limited

Good Energy Development
(No.30) Limited

Next Green Car Ltd**

100%

50.1%

Development of an energy
generating asset

Investment holding
company

Development of an energy
generating asset

Development of EV Charging
point platform app

*Entities indirectly owned by Good Energy Group PLC.

** Registered address: Unit 66, Spike Island, 133 Cumberland Road, Bristol, England, BS1 6UX.

The subsidiaries above have all been included in the consolidated financial statements.

180

Good Energy Annual Report 2021
Notes to the Financial Statements

18. Investments and Subsidiaries (continued)

Impairment

The Group performed an impairment test in December 2021. 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 2021, the market capitalisation of the Group was 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 4.75%, and cash flows beyond the five-year period are extrapolated using a 1.0% 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 discount rate of 50%
would still leave significant headroom, and would not trigger an indication of 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.

19. Inventories

Renewable Obligation Certificates

Emission Certificates

Total

Parent Company

Consolidated

2021

2020

2021

2020 Restated

£000’s

7,087

594

7,681

£000’s

13,116

148

13,264

As at 31 December 2021 there were Renewable Obligation Certificates (ROCs) of £5,584,765 (2020 restated:
£5,448,333) 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 any impairment value, and included in 'cost of sales' amounted to £14.0m
(2020: £12.1m).

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Financial statements

Notes to the Financial Statements

20. Trade and Other Receivables

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

2021

2020

2021

2020

£000’s

140

235

47,686

34,278

(11,792)

(8,882)

112

36,758

25,396

1,157

162

176

35,929

26,715

Where a customer account is in credit this is included in contract liabilities (see note 27 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

2021

£000’s

8,882

3,134

(224)

11,792

2020

£000’s

7,345

3,719

(2,182)

8,882

Trade receivables
31 December 2021

Contract
assets

Current

<30 days

Days past due

30-60
days

61-90
days

>91 days

Total

£000's

3.3%

7.9%

17.0%

31.2%

90.1%

30,934

4,294

1,488

804

11,030

48,550

1,015

340

253

251

9,931

11,792

Expected credit
loss rate

Estimated total gross
carrying amount at
default

Expected credit
loss rate

182

Good Energy Annual Report 2021

Notes to the Financial Statements

20. Trade and Other Receivables (continued)

Trade receivables
31 December 2020

Contract
assets

Current

<30 days

Days past due

30-60
days

61-90
days

>91 days

Total

£000's

Expected credit
loss rate

Estimated total
gross carrying
amount at default

Expected
credit loss

8.1%

13.9%

23.3%

80.8%

17,891

4,984

2,193

1,211

7,999

34,278

1,425

403

304

282

6,467

8,882

All trade receivables are designated as financial assets measured at amortised cost.

21. Cash and Cash Equivalents

Cash at bank and in hand

Short-term bank deposits

Security deposits

Total

Parent Company

Consolidated

2021

2020

2021

2020

£000’s

496

4,948

3,531

14,259

496

4,948

3,166

6,699

1,895

2,128

18,282

Included within cash at bank and in hand for both the Parent Company and the Group is £389,101
(2020: £372,000) 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:

A+

A-

BBB+

Total

Parent Company

Consolidated

2021

2020

2021

2020

£000’s

392

4,854

390

3,076

3,139

15,628

950

1,178

526

496

4,948

6,699

18,282

Cash and cash equivalents are all financial assets designated as financial assets at amortised cost.

183

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Notes to the Financial Statements

22. Share Capital and Share Premium

Parent Company & Consolidated

Number of
Authorised
shares

Number of
shares issued
and fully paid

Share
Capital

Share
Premium
Account

Total

£000’s

At 1 January 2020

20,000,000

16,621,245

Proceeds from shares issued

21,822

At 31 December 2020

20,000,000

16,643,067

Proceeds from shares issued

140,847

At 31 December 2021

20,000,000

16,783,914

832

833

840

12,790

13,622

12,790

13,623

12,790

13,630

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 2021, the Company issued 140,847 ordinary shares of 5p each in settlement of the exercise of share options,
for a total exercise consideration of £7,000. This relates to a scrip dividend issue of 4,641 shares (2020: no scrip
dividends issued).

Clarke Willmott Trust Corporation Limited holds in trust 250,880 (2020: 268,270) 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 17,390 (2020:
25,000) shares as a result of options exercised and acquired nil (2020: nil) shares.

The Board recommend a final dividend for 2021 of 1.8p per ordinary share, taking the full year
dividend to 2.55p.

184

Good Energy Annual Report 2021Notes to the Financial Statements

23. 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

Acquisition of subsidiaries

Charged to equity

At 31 December

Deferred tax assets

On short term timing differences

Losses

Interest deductible

Total

Deferred tax liabilities

On accelerated capital allowances

Revaluation of Generation sites

Acquisition of subsidiary fair values

Total

2021

£000’s

4,135

(994)

1,442

4,583

2021

£000’s

130

2,212

2,342

2021

£000’s

(2,779)

(4,111)

(35)

(6,925)

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£000’s

903

3,123

4,135

2020

£000’s

132

878

1,064

2020

£000’s

(2,029)

(3,123)

(47)

(5,199)

185

Financial statements

Notes to the Financial Statements

23. Deferred Taxation (continued)

Accelerated
capital
allowances

Revaluation
of
Generation
sites

Acquisition
of subsidiary
fair values

Short-term
timing
differences

Losses

Interest
deductible

Total

£000’s

Deferred tax
assets/(liabilities)

At 1 January 2020

(2,060)

Credited/
(charged) to the
income statement

Acquisition
of subsidiary

Charged to equity

At 31 December
2020

(Charged)/
credited to the
income statement

(62)

(3,123)

181

976

(49)

(98)

(903)

(47)

(62)

(3,123)

(2,029)

(3,123)

(47)

132

878

(4,135)

(297)

(2)

1,334

(54)

994

Assets held for sale

(454)

454

Credited to OCI

(1,442)

At 31 December
2021

(2,779)

(4,111)

(35)

130

2,212

(1,442)

(4,583)

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 £220,169
relating to losses of £880,675.

186

Good Energy Annual Report 2021Notes to the Financial Statements

24. Borrowings and Other Financial Liabilities

Current:

Bank and other borrowings

Bond

Loans from Group companies

Lease liabilities

Total

Parent Company

Consolidated

2021

2020

2021

2020
(Restated)

£000’s

557

2,700

1,007

1,063

557

555

1,955

1,063

612

3,264

1,089

2,119

3,630

Parent Company

Consolidated

2021

2020

2021

2020
(Restated)

£000’s

Non current:

Bank and other borrowings

33,405

Bond

Lease liabilities

Total

4,749

16,331

4,749

16,331

317

3,695

4,749

16,338

5,066

53,431

The Group has an undrawn bank overdraft of £nil (2020: undrawn bank overdraft £10,000,000) as at 31
December 2021. There is a revolving credit facility of £4,000,000 in place, of which £1,000,000 was drawn
down at 31 December 2021. The facility in the prior year was secured by guarantees from Good Energy
Limited, Good Energy Gas Limited and other Group entities.

During the year the bank loans relating to the Parent Company’s subsidiary, Good Energy Delabole Wind
Farm Limited were repaid. This was previously 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.

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Financial statements

Notes to the Financial Statements

24. Borrowings and Other Financial Liabilities (continued)

At 31 December 2021, £38,310,000 (2020: £32,644,636) 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 £3,481,000 (2020:
£2,754,299) and are being amortised over the life of the loan.

After the year end the group completed a group restructuring. As part of this Good Energy Delabole Wind
Farm Limited was brought within the Good Energy Generation Assets No. 1 Limited sub-group, its bank loans
were repaid in full with additional debt issued to Good Energy Generation Assets No. 1 Limited as part of a
revised facility with Gravis Capital Partners LLP. This is a non-adjusting subsequent event, more details of this
transaction are disclosed within Note 34.

Parent Company

31 December 2021

Due less than 1 year

Due between 1 and 5 years

Total

Parent Company

31 December 2020

Due less than 1 year

Due between 1 and 5 years

Total

Inter-
company
loan

Bond

Bank and
other
borrowings

Lease
liabilities

Total

£000’s

2,700

Inter-
company
loan

557

4,749

5,306

Bond

3,264

4,749

8,013

Bank and
other
borrowings

Lease
liabilities

Total

£000’s

1,063

16,331

17,394

1,089

16,338

17,427

The maturity profile of the bond is included in note 3.1.1.

188

Good Energy Annual Report 2021

Notes to the Financial Statements

24. Borrowings and Other Financial Liabilities (continued)

Consolidated

Bond

Bank and
other
borrowings

Lease
liabilities

Total

£000’s

31 December 2021

Due less than 1 year

Due between 1 and 5 years

Due more than 5 years

557

4,749

1,008

Total

5,306

1,008

555

317

872

2,120

5,067

7,187

Consolidated

Bond

Bank and
other
borrowings

Lease
liabilities
(Restated)

Total
(Restated)

£000’s

31 December 2020

Due less than 1 year

1,063

1,955

612

3,630

Due between 1 and 5 years

16,331

10,404

1,541

28,276

Due more than 5 years

23,001

Total

17,394

35,360

2,154

4,307

25,155

57,061

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 2021 are:

2021

Fair
value

2021

Carrying
value

2020

Fair
value

2020

Carrying
value

£000s

Good Energy Delabole Wind farm Ltd

4,672

4,657

Good Energy Generation Assets No. 1 Limited

39,513

38,310

32,962

32,645

Corporate bond

5,189

4,902

16,586

17,422

Borrowings are designated as other financial liabilities held at amortised cost.

The Good Energy Generation Assets No. 1 Limited loan is included as part of the liabilities
that are held for sale.

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Financial statements

Notes to the Financial Statements

25. Changes in Liabilities Arising from Financing Activities

1
January
2021

Cash
flows

New
leases

New
Debt

Reclass

Other

Liabilities
assets HFS

31
December
2021

£000's

£000’s

£000's

£000’s

£000's

3,018

(13,419)

698

12,645

107

(1,485)

1,563

49,736

(4,657)

6,088

(12,645)

(105)

(33,665)

4,752

612

169

3,695

(785)

664

57,061

(18,692)

749

6,786

(9)

(302)

555

(3,263)

317

(1)

(38,715)

7,187

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

Total liabilities from
financing activities

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.

26. Provisions for Liabilities

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.

2021

£000s

1,316

(1,339)

2020

£000s

1,294

1,316

1 January

Charged to Profit or Loss

Liability associated with assets held for sale (Note 5)

31 December

190

Good Energy Annual Report 2021

Notes to the Financial Statements

27. Trade and Other Payables

Parent Company

Consolidated

2021

£000's

(16)

511

495

2020

£000's

373

2021

2020 (Restated)

£000's

6,532

25,948

1,334

7,097

£000's

1,905

27,460

1,050

6,482

390

40,911

36,897

Trade payables

Accruals

Social security and other taxes

Contract liabilities

Total

Trade payables, accruals and other payables are designated as other financial liabilities held at
amortised cost. The accruals include liabilities such as the ROC accruals for the current compliance
period, unbilled transmission network charges and the Groups FIT pot contribution.

All of the contract liabilities in 2020 as shown above were recognised as revenue in 2021.

28. Dividends Paid

Amounts recognised as distributions to shareholders in the year (based on the number of shares in issue
at the record date) are as follows:

Consolidated

Final dividend for prior year of 0p per share
(2020: 0p)

Interim dividend for current year of 0.75p per share
(2020: 0p)

Sub-total

Dividends waived

Total

2021

£000’s

108

2020

£000’s

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 1.80p per share was proposed on 29 March 2022, subject to shareholder approval at the
Company’s AGM.

Of the total dividend distributed for the year, £1,000 (2020: £nil) was paid in the form of scrip dividends with
a balance of £107,000 (2020: £nil) settled in cash.

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191

Financial statements

Notes to the Financial Statements

29. Cash Generated from Operations

Reconciliation of net income to net cash provided by operating activities:

Parent Company

Consolidated

2021

2020

2021

2020 Restated

£000’s

Profit before tax from continuing operations

Loss before tax from discontinuing operations

Profit/(loss) before income tax

Adjustments for:

Depreciation of PPE and ROU assets

Amortisation & impairment of intangibles

Loss on assets disposals

Impairment of assets

Revaluation of generation site

Fair value adjustment of contingent consideration

Net gain on financial assets at FVTPL

Share based payments

Share of loss of associate

1,998

(13)

649

(2)

(86)

(6)

Dividend income from subsidiaries

(5,917)

(4,000)

1,834

(6,752)

(4,918)

4,014

1,133

182

1,324

4,458

1,218

287

522

(86)

(6)

Other finance costs - net

533

917

2,257

4,156

Changes in working capital
(excluding the effects of acquisition and
exchange differences on consolidation)

Inventories

Trade and other receivables

Trade and other payables

(60)

105

(78)

142

Cash (outflow)/inflow from operations

(3,353)

(2,365)

5,582

(4,813)

(10,098)

4,424

3,900

2,844

2,766

11,425

192

Good Energy Annual Report 2021

Notes to the Financial Statements

30. Share-Based Payments

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. No costs in respect of these options (2020:
£39,000) are recognised in the Consolidated Statement of Comprehensive Income. As at 31 December 2021,
the following options had been issued:

Number of options

Weighted average
exercise price

Total exercise
consideration

2021

2020

2021

2020

2021

2020

(Number)

(£)

£000’s

Outstanding at beginning
of year

628,009

1,255,293

0.68

Granted

Exercised

473,109

(153,596)

(46,822)

Cancelled/surrendered

(238,994)

(580,462)

2.18

0.18

0.59

Outstanding at the end
of year

708,528

628,009

1.82

0.81

0.70

0.97

0.68

428

1,022

1,030

(27)

(32)

(140)

(561)

1,291

428

In order to partially fulfil the options granted, 250,880 (2020: 268,270) shares representing approximately
35% (2020: 43%) 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.

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Financial statements

Notes to the Financial Statements

30. Share-Based Payments (continued)

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)

2021

2020

2012-2015

2013-2016

2015-2017

2015-2018

2018-2021

2021-2022

2021-2024

2025

2023

2027

2028

2023

2025

0.50

1.15

1.25

2.29

2.25

0.05

1.78

2.51

144

141

258

709

104

144

330

628

There were 473,109 share options granted in the current year. The right to exercise share options expires in
line with contractual agreements between the group and the holder made at the grant date, or varied by
agreement with both the Group and the holder.

See note 10 for the total expense recognised in the Income Statement for share options granted to Directors
and employees.

31. 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 £518,000 (2020: £498,000).

Total contributions of £73,000 (2020: £148,000) 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.

194

Good Energy Annual Report 2021Notes to the Financial Statements

32. Related Party Transactions

As at 31st December 2021, Tidal Lagoon Power Ltd owed the Group £17,000 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.
£17,000 of this debt has been provided for through the Group’s expected credit loss provision.

On 8 April 2021 Good Energy Group plc made a £1m strategic investment via a convertible loan note into
Zap-Map’s parent company Next Green Car Ltd (“NGCL”). On 22 December 2021, Good Energy Group plc
provided a secured loan of up to £0.5m to NGCL.

A portion of Juliet Davenport’s annual salary related to her position as a non-executive director at Zap Map.
This non-executive position ended in March 2022.

During the year the Group sold some old office furniture to Juliet Davenport for £60.

33. Subsequent Events

Generation asset sale

As announced in a strategic update on 25 November 2021, the Company appointed KPMG LLP to lead a sale
process for the Company’s entire 47.5MW generation portfolio. Following a competitive process, the disposal
(Disposal) of the portfolio was completed with Bluefield Solar Income Fund (BSIF) on 19 January 2022.

The initial consideration of £16.4m, less distributions since the lockbox date of £0.7m, resulted in £15.7m being
paid to the Company on completion.

The final deferred consideration payment has been agreed as follows:

£4.3m has now been paid, with a further up to £0.5m to be paid on 30 June 2022, subject to Good Energy
meeting all its payment obligations up to that date for power supplied by the portfolio to it under the power
purchase agreements.

The total deferred consideration is there agreed to be up to £4.8m.

Of the £3.3m that will not be received, £2.3m arose due to the impact of a third-party energy yield assessment
on the agreed financial model and £1m arose during detailed technical and financial due diligence.

Total consideration received to date is therefore £20.7m, with an agreed final total consideration of up to
£21.2m by 30 June 2022.

Requisitioned general meeting

As announced on 14 January 2022, Ecotricity Group Limited requiring the Board to convene a general
meeting of shareholders for the purpose of considering two resolutions, namely:

• an ordinary resolution to remove William Whitehorn from office as a director of the Company

(“Resolution 1”); and

• a special resolution to direct the Board not to dispose of the Company’s generation assets without

shareholder approval (“Resolution 2”).

The requisitioned General Meeting was held at 9am on Friday 11 February 2022 at SEC Newgate, 14 Greville
Street, London, EC1N 8SB.

All voting was undertaken on a poll. The table overleaf shows the votes received for and against each
of the Requisitioned Resolutions.

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Financial statements

Notes to the Financial Statements

33. Subsequent Events (continued)

Requisitioned general meeting voting results

For

Against

Total

Withheld

Resolution

Votes

% ISC

Votes

4,581,943

4,658,286

41.7

42.8

6,411,473

6,226,697

58.3

57.2

10,993,416

10,884,983

65.5

64.9

35,198

143,631

Consequently, neither of the Requisitioned Resolutions received sufficient support from the Company’s
shareholders to be passed.

Invasion of Ukraine

The wholesale market for electricity and gas spiked significantly in the weeks following the invasion but has
since settled down to a level like what had been seen at various points in the past six months (when wholesale
markets were already proving very volatile). The Company’s hedge positions as outlined in the operating
review on pages 30 to 31, mitigates the immediate impacts of the conflict, but there will remain uncertainly
through 2022 as the conflict and related inflationary impacts develops. The Company has mitigations it can
employ through 2022 to offset further risks caused by the situation.

Zap-Map Board update

As announced on 10 March 2022, Nigel Pocklington has been appointed Chair of Zap-Map. He takes over the
role from Good Energy Founder and Non-Executive Director Juliet Davenport, who steps down from the Zap-
Map Board. Nigel bolsters the Board’s expertise in building successful online platform businesses, together he
and existing independent Non-Executive Director Tim Jones have a wealth of experience from leadership roles
at AutoTrader, Moneysupermarket.com Group and Hotels.com.

196

Good Energy Annual Report 2021Notes to the Financial Statements

34. 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.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.12) Limited
Good Energy Development (No.16) Limited
Good Energy Development (No.24) Limited
Good Energy Development (No.26) 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.
Good Energy Delabole Windfarm Limited

35. 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

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

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197

Financial statements

Directors and Corporate Resources

Directors

William Whitehorn (Non-Executive
Chairman)
Nigel Pocklington (Chief Executive)
Rupert Sanderson (Chief Financial Officer)
Juliet Davenport (Chief Executive)
Timothy Jones (Non-Executive Director)
Emma Tinker (Non-Executive Director)
Nemone Wynn-Evans (Non-Executive
Director)

Independent Auditors

Mazars
90 Victoria St
Bristol BS1 6DP

Financial Advisors

Investec Bank plc
30 Gresham Street
London, EC2V 7QP

Company Secretary

LDC Nominee Secretary Limited
70 Great Bridgewater Street, Manchester,
M1 5ES

Company Number

04000623

Principal Place of Business and Registered
Office

Monkton Park Offices,
Monkton Park
Chippenham
Wiltshire
SN15 1GH

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

Registrars

Computershare Investor Services PLC
The Pavilions, Bridgwater Road
Bristol BS99 6ZY