Interviewee: Sarah Merrick, Founder and CEO, Ripple Energy Limited
Interviewer: Yuno Dinnie
I first came across Ripple Energy and its CEO Sarah Merrick at the Fully Charged Live event in 2021. She was one of the panelists at a session where she talked about what her company was doing, and it was something I never thought was possible: building consumer-owned wind farms.
We are all familiar by now with the idea of owning rooftop solar panels and selling excess electricity back to the grid. But owning a wind farm? They are by nature massive, usually located far away from population centers, and the construction costs are beyond the budget of ordinary households. So what does Ripple offer?
This is how it works: Ripple builds a wind farm. Individual energy consumers buy shares in the wind farm and become its co-owners as part of a wind farm co-operative. Energy suppliers buy the electricity generated by the co-op’s wind farm and supply the electricity to the co-op members’ homes. Because wind – along with solar – is the cheapest energy source in the UK, members receive the difference between the cost of wind power and the market energy price in the form of a discount on their electricity bills. The more shares you own, the bigger the discount is, and the higher the market energy price is, the bigger the discount rate and the more money you save.
Sarah Merrick founded Ripple Energy in 2017, and at the time of that talk in the summer of 2021, Ripple’s first project was under construction in Wales, and the company was taking reservations for the second project, to be built in Scotland. I was more intrigued than enthused at first, but the more I investigated the proposition, the more it made sense. Two years on, I am a proud part-owner of Kirkhill, an 18.8 MW wind farm currently under construction in Southwest Scotland, as well as Derril Water, which is Ripple’s third project and first solar park.
I am delighted that Sarah has kindly taken time out of her busy schedule to answer a few questions about how Ripple came about and share her vision for the future.
Creating a ripple in the wind industry
— I understand that you have always worked in the renewables industry throughout your career. What attracted you to the sector?
Sarah: Yes, I have worked in renewables since I finished university. Prior to establishing Ripple Energy, I’d worked in the wind industry for 20 years as an economist, working mostly on strategy, energy policy and communications. My first role was for an electricity trade body that covered all electricity, but even back in 2000, it was pretty clear that renewable energy was going places. I was attracted to the sector because I found there were lots of opportunities for me to progress doing something I knew was right — making clean energy mainstream.
— How did you come up with the idea for Ripple? What made you decide to start your own company?
Sarah: I’ve worked at the heart of the wind sector for 20 years. Once wind became the UK’s cheapest source of power, there was a big push for wind farms to sell their green electricity to large corporate companies like Google or Facebook. It seemed really unfair to me that these big companies could access the cheapest and greenest electricity around, but an ordinary household consumer like myself couldn’t. Making it possible for people like me to directly access and own this authentic type of green electricity was the reason I established Ripple Energy.
— What was the reason for choosing the co-operative ownership model? How important was the idea of shared ownership to you and why?
Sarah: The transition to a zero-carbon economy opens up new ways of doing things. Shared ownership enables genuine energy democracy. Co-operatives are a great way to make that happen. Ripple enables people to own their own source of clean power to power their home. We no longer need assets to be owned by large companies, people can be empowered to own the assets that provide the energy they use.
— How hard was it to persuade investors that your idea would work? Do you think being a woman made it harder to be taken seriously?
Sarah: Initially those who worked in the sector didn’t think the Ripple model was possible, it was too different from the status quo. But as we move to a net zero future, we need innovation and to look for new ways of doing things. Now we’ve got one project up and running and two more being built, the industry is much more receptive to the model.
I’ve worked in the wind industry for 20 years and never felt particularly hampered by being a woman or mum in my career – until I became a founder. When I learnt that women who led start-ups secure less than two per cent of venture capital funding in the UK, it was a hammer blow. It’s just not fair. That’s why we’ve gone for crowdfunding as it seems to be a lot more open to female founders. As a result, Ripple has nearly 4,000 amazing investors.
— Unlike area-based community energy projects, Ripple’s model requires partnering with energy retailers. Has it been hard to convince energy suppliers to come on board? Are you seeing any changes since the first project?
Sarah: Lots of energy suppliers are interested in working with us because there is the demand from their customers. Individuals are looking for ways to make the largest climate impact, Ripple offers this, and people are pushing their suppliers to work with us. Due to the energy crisis over the last 2 years, suppliers have naturally had a lot to focus on. But now we’re coming out of the crisis, we’re having lots of positive conversations with suppliers and hope to bring more onboard soon. For our first project, we just worked with Your Co-op Energy (powered by Octopus). We’re still working with them as well as E.On Next, one of the biggest energy providers in the UK, and commercial energy supplier Unify Energy for our business customers.
Wind and the sun, across the country and beyond
— Ripple’s first project, Graig Fatha, attracted 900 people to sign up as members. The second project, Kirk Hill has more than 5,000 members. What level of interest is your third project, Derril Water, receiving?
Sarah: The Derril Water share offer has been open for a few weeks. On the first day we had more people join than the whole of Graig Fatha, and within the first week we had more people join than all of Kirk Hill. We’ve got thousands of new people signed up, which is just fantastic.
— Derril Water is not a wind farm but a solar park project. Was England’s onshore wind ban a factor in the choice, or was it always a plan from the outset to offer a mix of different technologies?
Sarah: We always planned to expand to other technologies including solar and offshore wind. We have a healthy pipeline of wind projects in Scotland and Wales and more solar projects in England. But ending the onshore wind ban in England is still an essential part of reaching broader net zero goals and decarbonizing our energy system. Poll after poll has proved that people like wind farms and they like the cheaper, greener power they produce — we need to update the planning laws so we can get more of them built.
— What future plans do you have for Ripple — e.g., more onshore wind, solar, offshore wind, energy storage or any other technologies?
Sarah: We’re open to any fuel-free technologies. For now, that’s onshore wind and solar. We hope to launch lots more of these projects. We were part of an offshore wind consortium, but it didn’t secure a seabed lease. We hope to offer offshore wind through Ripple in future though. We have considered battery storage but it wouldn’t work with our current co-op model. The revenue stack is a lot more complicated and there’s far less of a direct link between a member and the storage revenues. However, if we did offer storage it would need to be a mature and well proven storage technology. We don’t think members should be exposed to the sort of risk associated with novel technologies. It is why we offer wind and solar rather than wave or tidal; technology risk is negligible, and with maturity (usually) comes low cost. They are cheapest and deliver the greatest benefit to members.
— Do you have an ambition to expand outside the UK? Are you getting enquiries from outside the UK?
Sarah: Yes, we wanted to first get the Ripple model really well established in the UK. With two projects under our belt and another currently open, we’re now evaluating which market to enter into next. We’re in the market research stage currently to work out where our expansion will begin but we’ve got big plans for the next few years.
— In Japan, renewables make up only a quarter of electricity supply. What potential do you think Japan’s wind energy sector has and what are its challenges? What do you think the Japanese government, businesses and people can do to accelerate the country’s energy transition?
Sarah: In the past decade, we have seen the global wind power market quadruple in size and establish itself as one of the world’s most competitive and resilient power sources. Wind is clean, free, and readily available — what we need now is the deployment of more wind turbines on a global scale to harness the opportunities it brings for accelerating net-zero. Thanks to its substantial coastline but deep seas, Japan has huge potential for floating offshore as well as plenty of onshore wind and solar. To capitalize on this, the government needs to ensure energy policy is aligned with net zero targets and industrial strategy to enable the rapid deployment of more wind power. Individuals can make their support for renewable energy known to help incentivize greater development.
The Derril Water Solar Park share offer closed at the end of May. It raised over 20 million pounds, which is the largest ever amount raised by a UK Co-op Society for a single project. The previous holder of this title was Ripple’s second project, Kirk Hill Wind Farm, which raised 13.2 million pounds, which means that Ripple members’ co-operatives now hold the number 1 and number 2 spots for the largest single raises in UK Co-operative history. Ripple Energy has also been shortlisted for the British Renewable Energy Awards 2023 in the Community category. The ripple Sarah created in the energy industry six years ago is becoming a tidal wave of climate action.