CHAIRMAN'S STATEMENT

For the year ended 31 December 2007

It is a pleasure to report that in terms of operational improvement and financial results, 2007 was our Company's best ever year. A full review of the year is included in the Operating and Financial Review on pages5 to 8. We believe that further progress is likely to be achieved in 2008.

Since the formation of the Company, the Board has consistently asserted that Climate Change is happening and that its increasingly harmful effects require a commensurate response in the form of reduced carbon emissions. Accordingly and irrespective of the extent of political and regulatory initiatives, we introduced our 100% renewable electricity product as an immediately available solution for householders and businesses. 2007 has seen our 7th year of continuous growth in sales of this product.

It has been the Group's consistent intention to pursue its Climate Change goal as a properly structured commercial enterprise rather than as a lobby group, environmental trust or charity, and our high levels of environmental and ethical standards of course do not release us from our obligation to deliver good financial results and positive shareholder returns. 2007 demonstrates progress on this front.

We also believe that the Group's impact on wider public recognition of the need for a response to Climate Change is more than would be expected from a company of our size. Our Good Energy brand, our PR activity, and the valuable influence of our customers and shareholders in their communities are all leading to a rapidly expanding market for low carbon products and services.

We broadly welcome the proliferation of businesses, product offerings and investment funds that have arisen under the "green" banner. However we are entitled to suspect that some of these are more financially exploitative than authentic. It is time that our regulatory authority concluded its work on the establishment of a proper rating system so that potential customers may make informed decisions.

A key highlight of 2007 has been the management of cash in what is essentially a cash consumptive business model; that is, the Company lays out cash to expand its customer base before customers return the cash via their bill payments. At the time of this statement, the international economic and financial outlook is uncertain. Whilst this operating environment is not ideal for any company, we believe that underlying regulatory drivers behind the growth of renewable energy, concerns over energy security and the high cost of conventional fossil fuels should support the Group's business model. The Board believes that the Group's cash position makes it better placed to manage its growth than would otherwise be the case.

Our relatively strong year-end cash position has been helped by the results of the Share Offering in December 2007. I would like to take this opportunity to extend a warm welcome to the new shareholders in the Group. We now have over 1,700 shareholders and we do see these as a valuable resource.

Looking ahead, the Board recognises that it needs to continue to build, prudently, the Group's volume and profitability to a level which will give respectable financial returns to shareholders on a sustainable basis, and attract new capital if the need arises.

Finally, I want to acknowledge the contribution made by Juliet Davenport and her team; they have staked their careers in our business, and we should be impressed by their continuing enthusiasm and positive approach.

John Sellers

Chairman

31 March 2008