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 partially 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.
Watch a video of LDV Harburnhead Wind Farm. FIM's latest development for clients, two of which are pension funds. The site is made up of 22 Enercon E82 2.35MW wind turbines providing 51.70MW of generation. The site delivers approximately 139 GWh per annum, which equates to supplying approximately 33,000 homes and saves around 60,000 tonnes of C02 emissions per annum.
The wind farm began construction at the end of 2015 and was completed in December 2016, being both on time and under budget.
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 already been implemented. Meanwhile, supply from traditional thermal generators continues to decline in line with government emission reduction schemes, e.g all coal stations will close by 2025. This is forecast to 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 that 15% of total energy consumption should 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 associated revenue.
- These market conditions provide attractive returns to investors through partially indexed linked cash flows and potential upside from expected power price increases.
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.