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Greencoat Renewables recaps on a big year of growth

Greencoat Renewables GRP Monaincha wind farm

Greencoat Renewables (GRP) reported final results for the year to 31 December 2020, with key highlights from the year including the following:

  • 2020 Generation increased by 22% to 1,404GWh, 3 per cent below budget. (2019: 1,154GWh)
  • 2020 Net cash generation increased by 36% to €66.4 million (2019: €48.7million)
  • Dividend cover for 2020 of 1.7x
  • Increased the portfolio to 21 wind farm investments, net generating capacity to 557MW and GAV to €1,177 million as at 31 December 2020.
  • Acquisition of 4 wind farms in Ireland in the period
  • Placement of a new 3 year €300 million revolving credit facility and €200 million of 5-year term loans during the year adding more stability to the capital structure.
  • Issuance of 111 million new shares raising €125 million
  • The portfolio’s generation in 2020 was sufficient to displace thermal generation equivalent to 561,432 tonnes of CO2 and power 330,355 homes
  •  €0.8 million of funds committed to local communities across 114 community projects

Manager’s outlook

“The outlook for the group continues to remain positive with a growing secondary wind market in Ireland and France, a stable policy backdrop for wind assets underpinned by the REFIT and RESS frameworks in Ireland and the FIT framework and France. This continues to provide a significant opportunity for continued growth into attractive jurisdictions in Europe.

Irish Wind Market

The Irish wind market remains an attractive jurisdiction with both a stable and supportive regulatory regime and broad public support. The country has over 4.0GW of installed capacity either in operation or construction under REFIT 1, REFIT 2 or RESS, representing a c.€8bn market size.

The RESS framework successfully completed its first auction in August 2020, further demonstrating the Irish government’s commitment to generating 70 per cent of electricity from renewable sources by 2030.This year’s auction saw c.400MW of wind and c.800MW of solar PV awarded fixed-price support contracts guaranteeing the price of wholesale electricity until 2038. The successful transaction that the Group executed with Statkraft on a forward sale basis supports the strategy to continue to be able to grow in the Irish market and to secure contracted cashflows up to 2038.

With further auctions expected to occur annually, this continues to present a significant growth opportunity for the Group, with 8GW of onshore wind, 3.5GW offshore wind and 1.5GW of solar PV generating capacity expected to be in place by 2030.    

Continental Europe

Following the Group’s first investment outside of Ireland, acquiring 3 wind farms in France in June 2020, and the recent announcement of the Group’s agreement to acquire a wind farm in Finland in 2022, we continue to see the significant investment opportunities in continental Europe. We have an active pipeline in Belgium, France, Germany, the Netherlands and the Nordics through strong relationships with asset owners, developers and advisors. We are also conducting preliminary investigations of investments in Iberian markets, which have seen positive developments over the last few years. We see the European market providing the Group with access to a wide range of opportunities, mostly from sellers well known to the Investment manager, including European utilities and developers with whom we have transacted with previously.

We see the European market allowing the Group to continue to diversify the business, in terms of weather patterns, power markets and regulatory frameworks, while not taking any currency risk.

We continue to consider a range of revenue contracts, including government support regimes and corporate PPAs. We find particular value in the Nordics markets where subsidy-free renewable infrastructure development continues to see significant growth. Despite this investment opportunity, we continue to expect the portfolio to have a significant proportion of fixed price revenue underpinning its cashflow.”

GRP: Greencoat Renewables recaps on a big year of growth

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