Strengthened UK baseload power prices bolster NESF’s results

NextEnergy Solar Fund celebrates ‘milestone achievement’ as it reaches 150MWp subsidy-free target

Published: 10 Aug 2021, 10:35

Irradiation levels exceeded expectations by 4.8% for the quarter. Image: NESF.

NextEnergy Solar Fund (NESF) saw electricity generation come in 3.8% above budget in Q2 2021, boosting the company’s revenue by c.£1.1 million.

This was helped along by irradiation levels exceeding expectations by 4.8% for the quarter, with NESF also lauding the impact of short-term forward UK baseload power prices, which it said continue to strengthen and were in part already captured in its previous net asset value (NAV) due to its forward hedging strategy, which locked in higher prices as they emerged.

However, power price projections from NESF’s consultants have indicated that future power price estimates are currently lower than the figures used in March 2021, signalling a slight reduction in the power price estimates from 2027 onwards.

The outperformance of generation matches previous results, with electricity generation being +6.2% above budget over the year ending 31 March 2021, marking the seventh consecutive year of outperformance.

Meanwhile, Q2 2021 also saw the company’s total installed capacity jump to 893MW, up from 814MW in March 2021. NESF increased its operating solar assets to 99, energising five new assets in the quarter, with this including the 51MW South Lowfield site. In April, NextEnergy Capital claimed a new record for the UK’s largest solar farm, energising the 75MWp Llanwern asset, with total investment in the asset coming to c.£43 million.

NESF is continuing to advance its 400MW pipeline of international solar assets and 500MW pipeline of UK energy storage assets. NESF made its maiden battery storage play in 2018 with the acquisition of two utility-scale solar-plus-storage farms with a combined capacity of 7.2MW.

For Q2 2021, its unaudited NAV per ordinary share stood at 98.7p, a minor drop from the 98.9p of the previous quarter. Ordinary shareholders’ unaudited NAV came in at £580 million, down £1 million from the previous quarter.

It also secured a new £100 million Revolving Credit Facility at 120bps over Sterling Overnight Index Average (SONIA) during the quarter.

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