Octopus Renewables - Breach Solar Farm Update – 10 Year PPA Signed
03/03/2023 07:00
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RNS Number : 7301R Octopus Renewables Infra Trust PLC 03 March 2023
03 March 2023
LEI: 213800B81BFJKWM2JV13
Octopus Renewables Infrastructure Trust plc
("ORIT" or the "Company")
Breach Solar Farm Update - 10 Year PPA Signed
Octopus Renewables Infrastructure Trust plc has entered into a Power Purchase
Agreement (the "PPA") over the electricity to be generated at the Breach Solar
Farm ("Breach"), a c.67 MW solar PV project in Cambridgeshire, UK. Breach,
which was acquired in June 2022, is currently in construction and is expected
to become operational in Q4 2023.
The counterparty to the PPA is Iceland Foods Limited ("Iceland"), a unique
British food retailer with over 900 stores throughout the UK, a further 40
owned or franchised stores across Europe, and a global export business.
The Breach solar farm will provide c.64 Gigawatt hours (GWh) of energy every
year to power 150 sites, which will cover 14% of Iceland Foods' electricity
needs for its UK stores. This will reduce Iceland's emissions by nearly 22,955
tonnes of CO2 a year, equivalent to removing 12,590 petrol cars and planting
112,592 trees every year.
The PPA provides ORIT with a 10-year UK inflation (CPI) indexed price for 100%
of Breach's production each year and will provide Iceland with green
electricity for its operations in the UK. Iceland will be providing investment
grade credit support for the PPA.
The PPA will increase the percentage of ORIT's forecast revenues which are
fixed over the two years to 31 December 2024 to 71% and the percentage of
forecast revenues which are index linked over the next 10 years to 31 December
2032 to 56%*. The PPA is expected to be NAV-accretive when compared with the
power price assumptions included in the unaudited Net Asset Value as at 31
December 2022. This deal also further supports ORIT's dividend cover for the
coming years.
Elsewhere in the portfolio, Cumberhead, the 50MW wind farm under construction
in Scotland, which has a PPA with Kimberley Clark, recently participated in
auctions for the UK Capacity Market, which provides payments to new
electricity generators not participating in the Government's contract for
difference scheme. Cumberhead was awarded capacity market contracts which will
pay ORIT an inflation-linked revenue starting at over £200,000 per annum,
from 2026 until 2041, as well as a single-year contract for 2023/24 also
valued at over £200,000. This is more than double the assumptions used in the
Q4 2022 valuations in each case. This revenue is in addition to the revenue
expected to be received from Kimberley Clark under the PPA. The successful
award of the capacity market contracts is expected to have a positive impact
of c.£1 million on the Company's 31 March 2023 Net Asset Value**.
Phil Austin, Chairman of Octopus Renewables Infrastructure Trust plc,
commented: "We're delighted to be partnering with Iceland Foods, a major
British supermarket, through this corporate PPA. The Breach solar farm will
provide enough energy for a significant portion of Iceland's UK stores -
showing the vital role that renewables play in accelerating businesses'
transitions to Net Zero."
*Approximately 56% of the revenues forecast in the period to 31 December 2032
are now explicitly inflation linked (with reference to UK CPI, UK RPI, French
inflation, and Polish CPI).
**Investors should note that the information in this announcement does not
constitute an updated NAV of the Company. The unaudited NAV as at 31 March
2023 will be calculated in accordance with the Company's valuation policy and
is expected to be announced in May 2023. Shareholders should note that the
calculation of the NAV as at 31 March 2023 will take account of the latest
valuations of all of the Company's investments as at 31 March 2023. As such,
this announcement does not constitute or describe an updated NAV of the
Company.
For further information please contact:
Octopus Energy Generation (Investment Manager) Via Buchanan
Matt Setchell, Chris Gaydon, David Bird
Peel Hunt (Broker) 020 7418 8900
Liz Yong, Luke Simpson, Huw Jeremy (Investment Banking)
Alex Howe, Chris Bunstead, Ed Welsby, Richard Harris, Michael Bateman (Sales)
Buchanan (Financial PR) 020 7466 5000
Charles Ryland, Hannah Ratcliff, George Beale
Apex Listed Companies Services (UK) Limited (Company Secretary) 020 3327 9720
Notes to editors
About Octopus Renewables Infrastructure Trust
Octopus Renewables Infrastructure Trust ("ORIT") is a closed-ended investment
company incorporated in England and Wales focused on providing investors
with an attractive and sustainable level of income returns, with an element of
capital growth, by investing in a diversified portfolio of renewable energy
assets in Europe and Australia. ORIT's investment manager is Octopus Energy
Generation.
Further details can be found at www.octopusrenewablesinfrastructure.com
(http://www.octopusrenewablesinfrastructure.com/)
About Octopus Energy Generation
Octopus Energy Generation ("OEGEN") is driving the renewable energy agenda by
building green power for the future. Its London-based, leading specialist
renewable energy fund management team invests in renewable energy assets and
broader projects helping the energy transition, across operational,
construction and development stages. The team was set up in 2010 based on the
belief that investors can play a vital role in accelerating the shift to a
future powered by renewable energy. It has a 12-year track record with
approximately £6 billion of assets under management (AUM) (as of January
2023) across 12 countries and total 3.2GW. These renewable projects generate
enough green energy to power 2 million homes every year, the equivalent of
taking over 800,000 petrol cars off the road. Octopus Energy Generation is the
trading name of Octopus Renewables Limited.
Further details can be found at www.octopusenergygeneration.com
(http://www.octopusenergygeneration.com/)
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