LONDON (Reuters) - Hartree Partners has launched a green venture to supply low-carbon energy to British businesses with tailor-made installations, the energy trading firm said in a statement on Tuesday.
The venture, Hartree Solutions, will fully finance and build low-carbon power generation for clients with an energy bill of 500,000 pounds ($634,900) a year or higher. The aim is to reduce a company’s bill by up to 30% via a long-term fixed-price contract.
Hartree’s move is part of a growing trend among major energy and commodity traders like Vitol [VITOLV.UL] or Trafigura [TRAFGF.UL] to adapt their business models to the energy transition.
“Everyone wants to go green and everyone wants cheaper bills, but the two don’t generally go hand in hand,” Adam Lewis, a partner at Hartree, said.
As Hartree takes a very long-term view on the assets, their client’s electricity charges will be lower compared to a standard utility provider that needs a return on capital expenditure after two to three years, Lewis told Reuters.
Hartree will install solar, wind, gas-powered generation and battery storage for large energy consumers.
So far, the new venture has outfitted a hotel in southern England with a combined heat and power plant (CHP) with more in the pipeline.
“The client’s energy bill dropped 80% because now they only buy a fifth of their power from the grid,” Andy Harper, sales director at Hartree Solutions, told Reuters.
“We’re targeting SME types (small and medium enterprises) who do manufacturing as we believe they are underserved.”
The tailor-made systems can also be optimised as power markets fluctuate.
“When UK power demand crashed during the COVID-19 lockdown, there were many negative price periods...we could optimise against this so our customer actually got paid for electricity during COVID,” Lewis said.
New York-based Hartree, formerly HETCO, is owned by its senior staff, managers and Oaktree Capital that has over $113 billion of assets under management.
Reporting by Julia Payne; editing by Jason Neely and Emelia Sithole-Matarise