Foresight Solar Q1 2023 NAV decreases due to lower near-term power prices. Image: Foresight.
Foresight Solar Fund has seen its Q1 2023 net asset value (NAV) decrease to £757.5 million as a result of lower near-term power price forecasts.
The fund, which invests in ground-based solar PV and battery storage assets across the UK and internationally, saw its NAV decrease from £771.5 million on 31 December 2022.
According to Foresight, near-term power price and revenue forecasts for the period between 2023 and 2026 were notably lower as volatile energy prices begin to stabilise. The fall in near-term power prices in the UK had also been lowered via the introduction of the Electricity Generator Levy.
The 2022 Autumn Statement introduced the highly controversial 45% windfall tax on all electricity generators, something that had been condemned by the generation industry.
Foresight previously disclosed in November 2022 that the Levy would have a small impact on its portfolio and no impact on its UK battery portfolio whatsoever. This has now been confirmed with the results having stated that the fall in near-term power prices also lowered forecast payments for the Electricity Generator Levy. The result led to an upward movement of two pence per share for NAV.
One of the leading aspects which impacted Foresight’s NAV was the inclement weather in the UK in March. The result saw its global portfolio generate 3.8% of electricity below base case for Q1 2023.
This is a contrast to Foresight’s 2022 results which saw its UK assets produce 8.6% above budget. The portfolio, which at the time consisted of 50 assets, capitalised on several heatwaves to help deliver the fund’s best generation year to date.
As temperatures across the UK soared to over 30°C amid August’s heatwave, on Tuesday 19 July, solar power output met up to a quarter of the UK’s power demand.
Generation hit a peak of 7.7GW by midday according to Sheffield Solar’s PV Live website, more than six times the capacity of the country’s largest nuclear power station, the 1.3GW Heysham 2 plant in Lancashire.
Foresight also said its contracted revenues reached 88% for 2023, 82% for 2024 and 70% for 2025. The fund has also announced a share buyback programme of up to £10 million in recognition of the current discount to NAV.
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