Energy investor reaps benefits of favourable winds as profits rise
A PROMINENT renewable energy investor appears set to expand a Scottish wind farm portfolio which played a key part in the business in the latest year by achieving strong growth in profits.
The manager of The Renewables Infrastructure Group (TRIG) underlined the appeal of Scotland where a combination of favourable winds and a strong supply chain has helped the company achieve good returns on investment.
TRIG grew annual profits from £90 milion to £123m last year, during which it had more wind farms in Scotland than in any other country.
Under the management of Infrared Capital Partners, TRIG has amassed a portfolio of 14 wind farms in Scotland out of 33 in total. Six Scottish wind farms are included in its 10 largest investments.
“Within the UK, Scotland has the best environment for onshore wind projects,” said Infrared’s Richard Crawford, who added he expected Scotland to figure in TRIG’S growth plans.
TRIG underlined its interest in Scottish wind projects in June by acquiring a stake in the Solwaybank development in Dumfries and Galloway. It has invested £48.8m in the project with £33m to follow.
The company said in August that it would invest £20m in a battery storage facility in Broxburn, West Lothian that could a play a part in efforts to cope with fluctuations in the supply of renewable energy and demand for electricity.
Mr Crawford said TRIG is in advanced discussions about an investment opportunity in Scotland, without giving details.
He underlined the company’s confidence that investing in onshore sites in Scotland makes sense although the subsidy regime increasingly favours offshore developments.
In the results announcement TRIG said a good performance by its Scottish sites in the latest year helped mitigate shortfalls at its sites in England and Wales, where wind resource was below long-term average.
The fact there is a well-developed support base for renewable energy operators in Scotland helps boost the appeal of assets in the country.
“Development economics in Europe are favouring wind farms in the windier north, and solar parks in the sunnier southerly latitudes,” said TRIG. “Falling development costs are leading to projects being developed without recourse to government subsidies.”
Mr Crawford said Brexit could create supply chain and labour market complications but the prospect of it did not make the company less likely to invest in the UK.
TRIG told investors: “The UK’S ongoing negotiations to leave the European Union do not appear to be having a material impact on the renewables sector, with the UK Government expected to continue with policies and initiatives to help reach carbon emissions targets.”
The group said it is well placed over the longer term to take advantage of the drive towards global de-carbonisation and continued investor appetite for long-term yield from sustainable asset classes.
It raised £234m of equity funding last year and also won a vote of confidence from lenders including Royal Bank of Scotland and National Australia Bank.
TRIG said it had extended its Revolving Acquisition Facility in December until December 2021 on improved terms and with the facility size increased from £240m to £340m.
The group has 62 assets including wind farms in the UK, Ireland and France and solar plants in England and overseas.
“The company has an advanced pipeline comprising several investment opportunities where negotiations have reached an advanced stage for investments in wind farms located within France, the Nordics and the UK,” said TRIG, which declared dividends totalling 6.5p per share last year, up from 6.4p last time.
Within the UK, Scotland has the best environment for onshore wind projects