The Renewable Investment Group (TRIG) was able to partially offset a fall in wholesale power prices in H1 by beating its electricity production forecast.
Generation from the renewable investor’s assets was above budget by 9%, producing 2,141GWh, some 50% higher than the comparable period of 2019. Solar generation was 6% higher than expected, thanks in part to high irradiation in April and May.
Reflecting the mild winter and the severity and timing of COVID-19 measures, power demand was significantly reduced at the peak of movement restrictions across TRIG’s key markets, and are now averaging approximately 7% below demand levels that would be expected without the impact of COVID-19. In the UK, TRIG’s largest market, average demand is running approximate 10% below 2019 levels.
Due to the contraction in economic activity as a result of the ongoing pandemic, TRIG warned in April it may face a possible reduction in net asset value (NAV) of 5 pence per share. However, good asset availability and favourable weather conditions meant this figure was limited to only 2 pence per share for H1.
The company said its portfolio has “substantial near-term protection” in cash revenues from movements in wholesale power prices as it receives a high proportion of its revenue from selling electricity generated through power purchase agreements with fixed prices as well as from government subsidies.
However, in the longer term, based on its current portfolio, TRIG is expected to have greater exposure to wholesale electricity price volatility as subsidies and contracts with pre-determined pricing run-off. Over the next five years, 74% of its electricity sales will be conducted at a fixed price, falling to 67% over the next ten years.
TRIG said the impact of COVID-19 on operations during H1 was kept to a minimum through the deployment of “robust contingency plans” and forward investments in technology and capabilities over the preceding years to provide resilience.
“The challenges during the first half of this year have been significant for many companies, including TRIG,” said chairman Helen Mahy. “In light of this backdrop, I am pleased to report that our financial performance has remained resilient, sustained by strong operational performance.”
As of 30 June 2020, TRIG’s portfolio comprised 74 investments in the UK, Republic of Ireland, France, Sweden and Germany, including 45 wind projects, 28 solar parks and one battery storage facility.