Renewable energy is a proven asset class for institutional and private investors.
By investing into sustainable real assets such as wind and solar, investors can hold the asset for the long term income stream, providing stable inflation linked returns.
The development opportunities to invest in consented Renewable Obligation Certificate (ROC) and Contract for Difference (CfD) projects are now limited. However a significant number of opportunities exist to invest in operational assets. Operational assets have a proven track record and c.50% of the revenues are secure as ROCs and CfDs are grandfathered. They are not subject to the government's early closure of the Renewables Obligation and CfD regimes.
Currently onshore wind and ground mounted solar are the most established of the renewable energy technologies and are two of the lowest cost technologies. For more details on investment opportunities please contact FIM.
Attractive Index Linked Income Streams
The UK is a prime location to invest in renewable energy projects.
- UK demand for electricity is forecast to rise on an annualised real basis of c.2% over an assets life, despite the drive for energy efficiency as much has now been implemented. Meanwhile, supply from traditional thermal generators continues to decline in line with government emission reduction schemes, e.g all coal stations to close by 2025. This should lead to upward pressure on power prices over the medium and long term.
- UK power prices have declined over recent times and FIM believe now is a good time to acquire renewable energy assets whilst power prices are relatively low.
- UK Government has legislated 15% of total energy consumption to come from renewable sources by 2020.
- The UK has the best wind resource in Europe and assets enjoy high capacity factors generating high levels of electricity output and therefore revenues.
- These market conditions provide attractive returns to investors through indexed linked cash flows and potential upside from the expected power prices.
There are a significant number of UK direct investment opportunities for equity investors in both operational wind farms and solar parks.
FIM is able to source and structure a transaction to suit your investment requirements.