COMMENT: Can one man alone drive the green revolution?

Tom Youngman, a young climate activist from South West England, reflects on his meeting with Dale Vince, the CEO of Ecotricity, the world’s first green electricity company and now the UK’s leading dedicated green energy supplier. 

It is a time of change in the energy sector. This does not happen often: it has only really happened twice, the First and Second Industrial Revolutions.

Confronted by climate change, resource depletion and growing demand for electricity, the development of renewable energy and more intelligent methods of distribution (the ‘smart grid’) is essential.

Vince set up Ecotricity in 1996 - it now has over 65,000 customers, generating energy from the wind and sun

Dale Vince, and his company Ecotricity, is one of a generation of entrepreneurs participating in this transition.

Ecotricity currently has 53 wind turbines and sees itself rising to become the ‘Big Seventh’ energy supplier to challenge the UK’s traditional ‘Big Six’ utilities.

However with 65,000 customers and only capacity to power 32,300 homes, it is clear that this vision is a long way off: their Big Six rivals each have over 5 million customers.

Vince dismisses other green energy companies – describing his nearest renewable supply rival, Good Energy, as “not in it for the long term” – implying that his company alone will be the driving force behind the transformation of the British energy industry.

This is a mighty ambition for both Dale Vince and Ecotricity. It is important to understand that in many respects Vince and his company are one and the same. Ecotricity’s publicity proudly describes it as having “no shareholders”. In fact it has one: Dale Vince.

Vince made it clear in our discussions that he is the boss, stating: “I make the decisions. I set the strategy of the company.”

Founded on the climate fight

To assess Ecotricity, one must assess Dale Vince.

Vince’s clarity of purpose for Ecotricity is striking.

“Climate change has been there for us from the beginning. The choice of electricity for us as something to tackle, was because it’s the single biggest source of carbon emissions in Britain, responsible for about 30% – it seemed sensible to me to tackle the biggest issue,” Vince explained.

Ecotricity’s foundation, according to Vince, was a calculated result of questioning how best to tackle climate change. Vince recalled the company’s description of themselves from their early days: “We were environmentalists doing business, we weren’t a business doing the environment.”

An Ecotricity wind turbine near Swaffham, Norfolk, UK. (Source: Flickr/Mr ATM)

This mantra appears still true for Vince. Rather than being a hindrance, it appears that the company’s strong ethical values drive both Vince and Ecotricity to success – a lesson that many businesses would do well to observe. Vince is clear about the grand scope of these aims: “I started Ecotricity to change the world, I didn’t start it to make money.”

Vince seems to attempt to redefine the cliché of a ‘hard-headed’ businessman: he possesses the stubbornness of an entrepreneur but shows that success in business can be defined by more than the simple pursuit of profit.

His stubbornness was obvious throughout our conversation. One of the first questions I asked – for my own benefit, as much as anything – was what advice he would give to a young person thinking of starting a green business. His response: “One of my favourite pieces of advice is, don’t take advice. That’s important.”

Vince credits much of his success to his stubbornness, as he explained: “I’m not a person that likes to be told something can’t be done or that I can’t do it. I’m not saying that drove me on, but I just refused to accept other people’s view.”

“Back in the day, the early 90s, the common thing that everybody said to me was ‘what is green electricity?’ – they didn’t know the concept – ‘who’s going to want it?’ and ‘you’ll never be able to sell it because it’ll cost more money’.

“My view on that was that if we made it available, people would want it – that we would create the demand for it by making it possible… I just had my own view and wasn’t deflected by other people’s opinions. The fact it was something that hadn’t been done before doesn’t mean it can’t be done.”

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Vince’s single-minded determination continues to be valuable for Ecotricity today.

His refusal to be constrained by barriers dismissed as insurmountable by others sparks innovation. When confronted by the credit crunch, Ecotricity refused to accept the financial hand dealt them by the banks, instead selling £20 million in ‘Ecobonds’ to customers and non-customers for investment in wind turbines.

As Vince explains, it has been a practical yet unique alternative to leaving Ecotricity’s fortunes in the hands of the banks: “If you put your money into a bank, today they’re giving you 1.5, 2%. If they lend that to us, they’re charging us 7 or 8%. So we said, don’t give your money to the banks so that they can lend it to us, just give it straight to us. It’s a great concept.”

City of London syndrome

Dale Vince’s firm principles and determination have brought success and an innovative spirit to his company, which has pioneered the concept of ‘green electricity’. Vince deserves full credit for this – his OBE shows that the political establishment certainly warrant him it.

Vince’s sole ownership of the company could well be interpreted as a risk. While the benefits of avoiding the influence of less ethically-minded shareholders are clear (Vince referenced avoiding “City of London Syndrome”, which he defined as profit-focussed short-termism), it does leave Ecotricity entirely dependent on Vince, with its capital in his hands alone.

This could create a rather inequitable situation, although Ecotricity’s business model, where no profits leave the company, for now negates this. Nevertheless, Ecotricity’s repeated emphasis on the benefits of having ‘no shareholders’ (a half-truth: Vince being the shareholder) still leaves me a little cold.

This is not a failing of Ecotricity in achieving it’s main goal of increasing the UK’s renewable energy capacity – but it is a missed opportunity to pursue a more progressive model of ownership, such as mutualisation among customers or employees.

This represents Vince’s pragmatism in action – the abstract question of ownership is considered irrelevant as long as Ecotricity continues towards its main goal. Perhaps this pragmatism has brought Dale Vince and Ecotricity success in other areas, but here it has created an example of the failure to think long-term that Vince so despises in other businesses.

Green economics

Ecotricity alone – at least at its present size – has not transformed UK energy generation. While Britain’s renewable electricity generation has increased – in 2011 it comprised 9% of the total – it lags far behind its European neighbours: by the end of 2011 German electricity was 20% renewable and Portugal’s was more than 50%.

Vince’s vision for bridging this gap relies on “hideous” energy costs persuading the ‘Big Six’ to change their ways, as he puts it, “not because it’s the right thing to do environmentally but because it’s imperative economically”.

While a sensible argument, it ignores the possibility of extra investment in nuclear power and ignores the present situation: energy costs are increasing – I’m sure many of the 4.75 million UK households living in fuel poverty would already describe them as “hideous” – yet as Ecotricity’s website emphasises, investment in renewables from the ‘Big Six’ remains low.

While in time I can see Ecotricity fulfilling Vince’s stated goal of becoming the ‘Big Seventh’ energy supplier, I cannot see the ‘Big Six’ following Ecotricity in basing their business models on increasing renewable energy capacity and solving climate change.

My conclusion is clear – Ecotricity has not and likely will not transform the UK energy industry alone, at least not on its current trajectory. The UK is not yet on a path to being renewably powered. Further intervention – perhaps by government, perhaps by civil society, perhaps by other businesses – is necessary.

This does not mean that whatever does cause this energy transformation, this ‘Third Industrial Revolution’ as it has been dubbed, will not owe a great debt to Ecotricity and to Dale Vince.

Vince started Ecotricity when the concept of ‘green’ electricity was almost entirely alien and followed it through until it became distinctly mainstream. Dale Vince and Ecotricity have already played a very significant role in the UK’s response to climate change.

It may be expecting a little much to criticise them for not yet sparking an industrial revolution. Then again, in Vince’s words, he did start Ecotricity “to change the world”. Vince said to me that he would describe Ecotricity as a ‘youthful’ business. I am excited to see what Ecotricity can achieve as it matures.

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