By Mark Williamson Group Business Correspondent
A prominent renewable energy investor appears set to expand a Scottish
windfarm portfolio which played a key part in the business achieving strong
growth in profits in the latest year.
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 £90m to £123m last year, during which it had
more windfarms in Scotland than in any other country.
Under the management of InfraRed Capital Partners, TRIG has amassed a
portfolio of 14 windfarms in Scotland out of 33 in total. Six Scottish
windfarms 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 windfarms 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 £234 million 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 windfarms 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.
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