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 Harburnhead Wind Farm. FIM's latest development for clients, two of which are pension funds. 50MW producing 150,000 MWh, enterprise value circa £125m.
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.