Increases in power price forecasts provide boost for Bluefield, Octopus Renewables

Bluefield Solar’s unaudited NAV has risen to £630.2 million. Image: Bluefield Solar.

Bluefield Solar and Octopus Renewables Infrastructure Trust (ORIT) have detailed the continued impact of the high power prices seen across Europe in a lingering trend across the sector.

The adoption of power price curves from Bluefield’s power forecasters, alongside Power Purchase Agreement (PPA) fixes, the acquisition of Good Energy’s 47.5MWp solar and wind portfolio and Shaw-Energi’s 20MW battery storage project, as well as rolling forward its portfolio working capital and operating assumptions have all raised the company’s net asset value (NAV) during Q1.

It rose from an unaudited NAV of £610 million on 31 December 2021 to £630.2 million as at 31 March 2022.

Bluefield announced plans to restrike 150MWp of contracts – around 25% of its portfolio – during H1 2022 earlier this year, with James Armstrong, managing partner at Bluefield Partnets, telling Solar Power Portal at the time that these were to be restruck “at significantly higher levels than they are currently”.

Increases in short-term wholesale energy price forecasts, particularly in Sweden, Poland and Finland, have also driven up ORIT’s NAV by £9.8 million to £587.5 million.

Power prices have surged since late summer last year, leading to higher household energy bills and the creation of new government strategies to ensure energy security. Foresight Solar Fund recently detailed how during 2021, the average power price across its UK portfolio including fixed price arrangements increased 83% year-on-year, from £37.05/MWh in 2020 to £67.93/MWh.

Additionally this week, Foresight announced it had recorded revenues significantly above budget during the first quarter of 2022, with this driven by surging power prices. Like ORIT and Bluefield, this also lifted its NAV.

Following the increases in power prices, ORIT has fixed pricing on what it said is a significant portion of output for the remainder of 2022 and 2023 at its Ljungbyholm, Saunamaa and Suolakangas wind farms in Sweden and Finland. As at 31 March 2022, 56% of ORIT’s forecast revenue over the 24-month period to 31 March 2024 is fixed, with this figure having increased to 61% as at 30 April 2022, excluding the recent impact of the Lincs offshore wind farm acquisition. 

Bluefield, meanwhile, said it has continued its strategy of fixing power price contracts for periods between 12 and 36 months with most contracts continuing to be struck for a minimum of 18 months. The company has a price confidence level of 100% to June 2022 and 82% to June 2023 over its power and subsidy revenue streams.

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