REG - Renew Infra Grp Ld - Announcement of Final Results

Renewables InfrastructureAnnouncement

28/02/2024 07:00

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RNS Number : 6956E  Renewables Infrastructure Grp (The)  28 February 2024

 

 

28 February 2024

The Renewables Infrastructure Group Limited

"TRIG" or "the Company", a London-listed investment company advised by
InfraRed Capital Partners ("InfraRed") as Investment Manager and Renewable
Energy Systems ("RES") as Operations Manager.

Announcement of 2023 Annual Results

TRIG announces its Annual Results for the Company for the year ended 31
December 2023. The Annual Report and Accounts are available on the Company's
website: www.trig-ltd.com (http://www.trig-ltd.com/)

Highlights

For the year ended 31 December 2023

Strong underlying performance with modest decline in valuation

-     Robust pro-forma portfolio EBITDA of £610m(1) (2022: £677m)
reflecting strong achieved power prices.

-     Healthy cash flow generation with dividend cover of 1.6x
(2022:1.5x); or 2.8x (2022: 2.6x) before the repayment of £219m of
project-level debt.

-     6.9p reduction in NAV per share(2) to 127.7p (31 December 2022:
134.6p) driven by lower power price forwards and higher valuation discount
rates.

-     Power prices trended down during 2023 following reductions in gas
prices. Since the balance sheet date, forwards for 2024-2026 have further
reduced by c. 20%. Over a five-year horizon, a 10% reduction in power prices
would reduce the Company's NAV by 2.2p/share(4).

-     The weighted average Portfolio Valuation(3) discount rate as at 31
December 2023 has increased to 8.1% (31 December 2022: 7.2%), reflecting the
higher return environment.

Disciplined capital allocation

-     Reduction in project-level gearing to 37% (31 December 2022: 38%),
following debt repayment of £219m. Project-level debt is fixed rate and
amortises over the subsidy periods.

-     Retained cashflows and disposals helped reduce Revolving Credit
Facility ("RCF") drawings by £34m. In 2024, the Company expects to be able to
reduce RCF drawings to about £150m.

-     Construction projects completed, with 301MW of capacity delivered
during the year across five projects. All construction spend in 2023 was
funded from retained cash flows.

-     2024 dividend target(5) set at 7.47p/share, a 4% increase on 2023's
achieved dividend of 7.18p/share, balancing the strength of the Company's
inflation-correlated cash flows with moderating power prices and inflation.

Opportunity for capital growth

-     TRIG has an exclusive development pipeline of 1GW by 2030 from
repowering, co-location & extensions and new site developments.

-     Investing in development activities offers strong prospective
risk-adjusted returns, significantly ahead of the portfolio weighted average
discount rate, and provides optionality to take projects forward through build
and into operations.

-     Investment decisions consider an elevated return hurdle rate, which
includes the return offered by the buying back the Company's own shares,
portfolio construction and the Company's funding position.

-     TRIG has the potential to fund the delivery of the development
pipeline without the need for equity issuance, through retained cash,
divestment proceeds and structural debt capacity. Company's durable balance
sheet and amortising debt is projected to see portfolio gearing reduce to 23%
by 2030 on the current portfolio, whilst 38% of the portfolio remains
ungeared.

-     Operational and technical enhancements deliver capital growth
through improving the generation output of TRIG's existing portfolio. Examples
include AeroUp, which has delivered a 5% energy yield increase at the initial
trial site.

 

1    The unaudited EBITDA figures presented are based upon the aggregation
of SPV-level revenues and operating costs measured on a consistent basis
across regions.

2    The NAV per share as at 31 December 2023 is calculated on the basis of
the 2,484,343,784 Ordinary Shares in issue as at 31 December 2023 (see Note 11
of TRIG's 2023 Annual Report) plus a further 800,776 Ordinary shares to be
issued to the Managers in relation to part payment of the Managers fee for H2
2023 (see Note 18 of TRIG's 2023 Annual Report).

3   On an Expanded basis. Please refer to the Financial Review section of
TRIG's 2023 Annual Report for an explanation of the Expanded basis.

4   Sensitivity as set out in the Valuation of the Portfolio section of the
2023 Annual Report

5   This is a target only and not a profit forecast. There can be no
assurance that this target will be met.

 

 

Richard Morse, Chairman of TRIG, said:

"It has been an important year in the Company's history. The underlying
performance of the Company is strong and cash generation has never been
healthier, whilst the Managers have been working hard to create additional
value from within portfolio. This is against a challenging backdrop for the
share price, with tighter monetary conditions contributing to a decline in the
Company's valuation and a sustained discount to net asset value as market
return requirements have increased. If the interest rate cycle continues as
expected, the coming year is showing signs of a more benign macroeconomic
environment for the Company.

It is also an important year from a personnel perspective. After a decade at
the helm of TRIG's investment management team, Richard Crawford is retiring
from full time duties in the summer and will be handing over the reins to
Minesh Shah at InfraRed with effect from 1st July 2024. My Board colleagues
and I are extremely grateful for Richard's contribution to TRIG's success over
all these years and we're very pleased to continue with Minesh, with whom the
Board has worked closely over the last few years. We are pleased that TRIG
will continue to benefit from Richard's long history with the Company as he
remains a key part of TRIG's investment and advisory committees."

 

 

Enquiries

InfraRed Capital Partners
Limited                              +44 (0) 20
7484 1800

Richard Crawford

Phil George

Minesh Shah

Mohammed Zaheer

 

Brunswick
+44 (0) 20 7404 5959 / TRIG@brunswickgroup.com
(mailto:TRIG@brunswickgroup.com)

Mara James

 

Investec Bank Plc
                                               +44
(0) 20 7597 4000

Lucy Lewis

Tom Skinner

 

BNP Paribas
                                                       +44
(0) 20 7595 9444

Virginia Khoo

Carwyn Evans

 

Notes

The Company

The Renewables Infrastructure Group ("TRIG" or the "Company") is a leading
London-listed renewable energy infrastructure investment company. The Company
seeks to provide shareholders with an attractive long-term, income-based
return with a positive correlation to inflation by focusing on strong cash
generation across a diversified portfolio of predominantly operating projects.

TRIG is invested in a portfolio of wind, solar and battery storage projects
across six countries in Europe with aggregate net generating capacity of over
2.8GW; enough renewable power for the equivalent of 1.9 million homes and to
avoid 2.3 million tonnes of carbon emissions per annum. TRIG is seeking
further suitable investment opportunities which fit its stated Investment
Policy.

Further details can be found on TRIG's website at www.trig-ltd.com
(http://www.trig-ltd.com/) .

 

Investment Manager

InfraRed Capital Partners is an international infrastructure investment
manager, with more than 170 professionals operating worldwide from offices in
London, New York, Sydney and Seoul. Over the past 25 years, InfraRed has
established itself as a highly successful developer and custodian of
infrastructure assets that play a vital role in supporting communities.
InfraRed manages US$14bn+ of equity capital(1) for investors across the globe,
across listed and private funds in both income and capital gain strategies.

 

A long-term sustainability-led mindset is integral to how InfraRed operates as
it aims to achieve lasting, positive impacts and deliver on its vision of
Creating Better Futures. InfraRed has been a signatory of the Principles of
Responsible Investment since 2011 and has achieved the highest possible PRI
rating(2) for its infrastructure business for eight consecutive assessments,
having secured a 5-star rating for the 2023 period(3). It is also a member of
the Net Zero Asset Manager's Initiative and is a TCFD supporter.

 

InfraRed is part of SLC Management, the institutional alternatives and
traditional asset management business of Sun Life. InfraRed represents the
infrastructure equity arm of SLC Management, which also incorporates
BentallGreenOak, a global real estate investment management adviser, and
Crescent Capital, a global alternative credit investment asset
manager. Further details can be found on the website at www.ircp.com
(http://www.ircp.com/) .

 

(1) Uses 5-year average FX as at 30th September 2023 of GBP/USD of 1.2944;
EUR/USD 1.1291. EUM is USD 13.597m

(2) Principles for Responsible Investment ("PRI") ratings are based on
following a set of Principles, including incorporating ESG issues into
investment analysis, decision-making processes and ownership policies. More
information is available at https://www.unpri.org/about-the-pri
(https://www.unpri.org/about-the-pri)

(3) In the 2023 Principles for Responsible Investment ("PRI") assessment,
InfraRed achieved a 5 star rating for the Policy Governance and Strategy and
Infrastructure and a 4 star rating for the newly created Confidence Building
Measures. Please find InfraRed's report available for download on our website
here: https://www.ircp.com/sustainability/
(https://www.ircp.com/sustainability/)

Operations Manager

 

TRIG's Operations Manager is RES ("Renewable Energy Systems"), the world's
largest independent renewable energy company.

 

RES has been at the forefront of wind energy development for over 40 years,
with the expertise to develop, engineer, construct, finance and operate
projects around the globe. RES has developed or constructed onshore and
offshore wind, solar, energy storage and transmission projects totalling more
than 23GW in capacity. RES supports over 12GW of operational assets worldwide
for a large client base. Headquartered in Hertfordshire, UK, RES is active in
14 countries and has over 2,500 employees engaged in renewables globally.

 

RES is an expert at optimising energy yields, with a strong focus on safety
and sustainability. Further details can be found on the website
at www.res-group.com (http://www.res-group.com/) .

 

Chair's Statement

The past year marks a decade since TRIG's IPO in 2013. Our diversified
portfolio now has generation capacity of 2.8GW, ten times that at IPO, and can
produce enough clean energy to power 1.9m homes and displace 2.3m tonnes of
CO(2) per annum.

The portfolio's strong, inflation-linked cash flows have supported healthy
dividend coverage and enabled TRIG to fund organically the delivery of 300MW
of new generation capacity since IPO. This year, robust cash flows were
achieved despite the strained macroeconomic environment as interest rates rose
to the highest levels during the Company's history. This macroeconomic
backdrop has negatively impacted the share prices of renewables investment
companies, including TRIG.

The portfolio's revenues have benefited from high power prices relative to
historic norms and the direct inflation linkage of over half of the
portfolio's revenues through government-backed offtake contracts, while our
portfolio cash flows have benefited from having fixed interest rates across
the vast majority of TRIG's debt. These solid foundations produced
distributable cash flow(1) of £283m, after the repayment of £219m debt
across the Group,(2) and delivering a net dividend cover of 1.6 times.

Investor return expectations have increased consistent with the higher yield
available from government bonds in TRIG's key markets. In addition, near-term
power prices have reduced from their recent peaks, particularly in the last
quarter of 2023. Reflecting these changes, we have during the year increased
the Portfolio Valuation discount rate by 0.8% to 8.1% and reduced our
near-term power forecasts. As a result, the Company's Net Asset Value has
decreased by 6.9p per share over the course of the year to 127.7p per share at
31 December 2023. This valuation reduction feeds directly through into the
Company's reported earnings. The full impact of these factors was, in part,
offset by increases in inflation and active management of the portfolio.

Market transactions continue to support the Portfolio Valuation, including the
divestment of three projects by TRIG during the year at a 26% premium to
valuation. The Managers are actively progressing with several further
divestment opportunities, which represent an opportunity to make strategic
adjustments to the portfolio and to achieve a priority objective of reducing
the level of our outstanding Revolving Credit Facility. The Company expects to
provide further updates on these in due course. Preliminary offers have been
consistent with or above the Portfolio Valuation.

The payment of an attractive, resilient dividend to shareholders is also a
core priority. Consistent with our policy of increasing the dividend when it
is prudent to do so while retaining flexibility to take advantage of
opportunities to invest for attractive capital growth,(3) I am pleased to
report a dividend target for 2024 of 7.47p per share (2023: 7.18p per share).
In increasing the target dividend by 4% above the 2023 level, the Board and
the Managers have considered not only inflation which in 2023 was c.4% across
portfolio geographies and in 2024 is forecast to be c.2.75%, but also the
strength of the Company's cash flows and prospects underpinned by its indexed
government-backed income. The 2024 target dividend represents a 6.6% yield by
reference to TRIG's closing share price on 31 December 2023.

Excess cash generation and disposal proceeds were reinvested in line with our
disciplined capital allocation strategy, which in 2023 prioritised reducing
borrowings under the revolving credit facility ("RCF") given the prevailing
equity market conditions, while still permitting completion of existing
in-construction projects, where the returns on the remaining investment were
attractive. The Company expects to be able to reduce RCF drawings over the
next 12 months to about £150m which is within 5% of Portfolio Value, using
proceeds from disposals and organic cashflows.

The Investment Manager, with the support of the Board, continues to consider
selective investment opportunities, where these are strategic and accretive.
One example is the recent acquisition of Fig Power, a UK developer with a
focus on battery storage systems.

Battery storage is an area of strategic focus for the Managers, recognising
the role flexible capacity needs to fulfil within the energy transition and
the diversification benefits for the portfolio. Fig Power brings the
opportunity to contribute mid-teens returns from our own proprietary pipeline,
enhancing portfolio diversification and continuing the evolution of TRIG's
strategic direction established in recent years towards a greater proportion
of value-add investment within the development and construction phases.

Investment activity would draw on the RCF as a bridge to funding from excess
cash generation, divestment proceeds and/or structural debt. All investments
are carefully considered against the alternative of returning cash to
shareholders (e.g. via share buybacks) and will only be made to the extent
that they are consistent with the Company's strategic priorities, continued
careful balance sheet management and the pursuit of delivering attractive
shareholder returns.

Active management

TRIG's operational portfolio continues to expand. Five projects were
commissioned during the year across Sweden and Spain. Construction has also
commenced for the Ryton battery storage project in the UK, and development
activities continue to progress well for the Drakelow battery storage project
in the UK and the repowering of five onshore wind projects across France and
Northern Ireland. Construction and development activities continue to provide
attractive risk-adjusted returns and the opportunity to leverage the deep
experience of TRIG's Managers: InfraRed and RES in renewables generation and
flexible capacity, as detailed further in the Investment Report and Operations
Report, including RES's progression of aerodynamic improvements to turbine
blades that are being installed at six of our GB projects following a
successful trial.

Active management of the portfolio by InfraRed and RES is a key competitive
advantage for TRIG, which both preserves and enhances the value of the
portfolio - thereby delivering value to shareholders. Specific technological
and commercial enhancements made during the year are also detailed in the
Investment Report and Operations Report.

The Company's principal risks are monitored by the Board and the Managers and
mitigated where practicable. TRIG continues to have three enduring principal
risks with a high residual impact which are: political/regulatory risk; power
prices and production performance. Additionally, since the 2022 Annual Report,
counterparty credit has become an elevated principal risk with a

high residual impact due to the current macro environment. These and other
risks are considered and expanded on in the Risk and Risk Management section.

Governance

In 2023, Klaus Hammer retired from TRIG's Board of Directors, having made a
significant contribution from his appointment in March 2014 onwards. We are
very grateful to Klaus for his dedication to TRIG and wish him well for the
future. We have also welcomed to the Board Selina Sagayam, a leading City
solicitor, who among other things chairs our new ESG sub-committee, an area in
which she is an acknowledged expert. The new sub-committee will consider ESG
performance, emerging regulations, good practices and risks within this area,
reinforcing TRIG's strong commitment to market leadership in this area.

These changes conclude the Board's immediate succession plan. Effective
succession is just one aspect of long-term stability. At a Board level, we
seek to maintain strong governance and engage with our shareholders. This year
the Board has met with investors directly through site visits and shareholder
meetings, as well as corresponding with shareholders, providing an opportunity
for engagement beyond the Company's AGM.

After a decade leading the day-to-day investment management of TRIG, Richard
Crawford is retiring from full time employment at InfraRed and will be handing
over his responsibilities to Minesh Shah with effect from 1 July 2024. The
Board is extremely grateful to Richard for his huge contribution to the
success of TRIG, the Company's track record and the energy transition. Minesh
is well known to the Board and to many of our investors, having spent the last
four years supporting Richard in the development of the Company's strategy,
screening pipeline transactions and risk management. The Board looks forward
to working with Minesh going forward, whilst continuing to benefit from
Richard's long history with the Company as he remains part of the TRIG
Investment and Advisory Committees.

Costs

Our results are presented net of management and administrative costs. The
headline 'ongoing charges ratio' of 1.04% compares favourably with our peers.
Under current regulations, we are aware that it is not consistently recognised
that the share price, dividend yield and track record are presented net of all
management and administrative costs of the Company, and the presentation of
the 'ongoing charges ratio' can result in 'double counting'. We are grateful
for the work of InfraRed alongside shareholders, our brokers, industry bodies,
the London Stock Exchange, and other investment company boards and managers,
in engaging with politicians and the FCA on this matter. We hope that this
pressure continues and leads to a positive outcome for the investment company
sector.

Outlook

As we look ahead, the secular themes of decarbonisation and energy security
continue to give us confidence in our strategy and outlook. The deployment and
operational performance of renewables assets remains a high priority for
governments across Europe. TRIG is well positioned to be at the forefront of
the energy transition and our Managers will continue to look for ways to
advance our 1GW development pipeline of potential generation and storage
capacity, through selective investment to progress TRIG's strategic priorities
and improve shareholder returns.

Our balanced portfolio of wind, solar and battery storage projects continues
to perform well, deliver inflation-correlated returns, and generate strong
operational cash flows with low sensitivity to interest rate movements. By
taking a disciplined approach to capital allocation, and with two leading
Managers steeped in investment expertise and operational excellence, TRIG is
well positioned to build on our strong decade-long track record.

Richard Morse

Chairman

27 February 2024

 

1.     This is referred to as distributable cash flow in the Financial
Review section on page 51 of TRIG's 2023 Annual Report. Reported on an
Expanded basis.

2.     The Company, TRIG UK, TRIG UK I and its portfolio of investments
are known as the "Group".

3.     The Company's dividend policy is to increase the dividend when the
Board considers it prudent to do so, considering forecast cash flows, expected
dividend cover, inflation across TRIG's key markets, the outlook for
electricity prices and the operational performance of the Company's portfolio.

 

Investment Report

Financial Highlights

Financial performance and valuation

The Group's operational cash flow(1) generation for the year has been strong
at £558m or £502m less fund expenses, which represents 2.8 times cover of
the £176m cash dividend paid to shareholders and was used to repay £219m
portfolio-level debt. After operating, finance costs and working capital, the
Group's distributable cash flow of £283m (2022: £249m) during the period
covered the cash dividend 1.6 times. Pro-forma EBITDA(2) for the year was
£610m. The table below shows TRIG's share (pro-rated for TRIG investment %)
of revenues from its investments, EBITDA and cash received from investments.

                               2023 (£m)   2022 (£m)   Commentary
 Pro-forma portfolio revenues  793         838         TRIG's share of revenues for each project in the portfolio
 Pro-forma portfolio EBITDA    610         677         Revenue less operating costs such as operations, maintenance, rent, business
                                                       rates and insurance
 Portfolio EBITDA Margin       77%         81%         EBTIDA as a percentage of total revenues
 Cash from projects            558         451         EBITDA less interest payable by projects on project finance debt, tax payments

before debt repayments                               and working capital movements
 Cash received from            339         284         Cash from projects of £558m, less portfolio-level debt repayments of £219m

projects                                             during the year

The above balances are not on a statutory IFRS basis, but are proforma
portfolio balances which show the Group's share of the revenue and EBITDA for
each of the projects. These balances have been provided in order to provide
shareholders with more transparency into the Group's capacity for investments
and ability

to make distributions.

Revenues have declined slightly as average power prices have reduced in 2023
versus 2022 partially offset by additional projects moving into operations.

In general, it takes one to two months between earning revenue and receiving
the cash up from investments. Consequently, there are always elements of
working capital which produce variations between earnings measures and cash
measures. In periods of rising prices these working capital balances are
expected to grow, therefore increasing the differences, and in periods of
falling prices the reverse is likely to be true.

EBITDA margin is strong at 77% with operating costs representing

a small proportion of revenues. After servicing project finance interest and
debt repayments, tax and working capital cash is available to pay up to TRIG.

The Company's Net Asset Value as at 31 December 2023 was 127.7p per share (31
December 2022: 134.6p per share) and the Company's Portfolio Valuation was
£3,509m. Earnings for the period were 0.2p per share (2022: 21.5p),
principally due to the reduction in the portfolio valuation as a result of
lower power price forecasts and higher valuation discount rates.

This performance has benefited from the following factors:

-    Continued active financial and operational management of TRIG's
portfolio, including:

o  The successful delivery of c.300MW new generation capacity through
construction into operations: four solar projects in Spain and the Grönhult
onshore wind farm in Sweden.

o  Disposing of three onshore wind farms in the Republic of Ireland for a
combined consideration of c.€25m, representing a 26% premium to the
valuation of the wind farms as at 31 December 2022.(3)

o  Fixing power prices for multiple projects at attractive prices on
pay-as-produced basis, including the signing of a ten-year corporate power
purchase agreement for the Blary Hill onshore wind farm and the fixing of
pricing of Renewable Energy Guarantees of Origin certificates ("REGOs").

o  The reversal of the retroactive feed-in-tariff reductions introduced by
the French Government for older solar projects.

-    Strong achieved pricing performance of REGOs in the UK and Guarantees
of Origin certificates ("GoOs") in the EU, resulting in increased forecast
revenues accounting for c.3% of total revenues.

These factors positively influenced the portfolio valuation by 7p per share
and have been partly offset by below budget generation, predominantly driven
by low wind resource in the UK during the period.

Macroeconomic movements which have impacted the portfolio valuation by in
total around 11p per share, and therefore earnings, included:

-    Decreases in short- and medium-term power price forecasts over the
next five years across the markets where TRIG invests which reduced portfolio
value. The decreases in power prices over 2023 significantly reduce the impact
of the windfall taxes introduced in 2022 on the Company's NAV. TRIG benefits
from 68% of revenues being fixed through government-backed revenue contracts,
which are predominantly inflation linked over the next five years.

-    Increases in the portfolio's weighted average discount rate by 0.8% to
8.1% (UK +1.0%, EU +0.5%). This increase has reduced the portfolio valuation.
The higher adopted discount rates reflect the increased return expectations
for yields over the period, particularly in the UK.

-    Increases in inflation assumptions which mitigated the impact of the
higher discount rate on TRIG's portfolio valuation. This has positively
contributed to the portfolio valuation as these inflation assumptions flow
into revenue forecasts through index-linked government-backed revenue
contracts and indirectly increase power price forecasts. Over 50% of the
Company's forecasted revenues are directly linked to inflation indices over
the next ten years.

Other factors which impacted the portfolio valuation include lower wind
resource in the year, revisions to energy yield budgets and sum to a reduction
of NAV by approximately 3p per share.

Looking ahead, near-term power price expectations have reduced, inflation
expectations have also moderated and government bond yields look to have
peaked in the near term. However, cash flows are expected to continue to be
elevated compared to historical levels prior to the Ukraine crisis, supported
by the portfolio's inflation linkage and strong power prices, which remain
significantly ahead of forecasts two years ago as at 31 December 2021 and
prior to the Ukraine crisis, on a like-for-like basis. When the NAV movement
is considered over the past 24 months, higher cash flow forecasts have
translated into a NAV uplift of 23p over the same period and have
substantially offset the 15p NAV decline resulting from the 1.3% increase in
the discount rate

Greater detail on the valuation movements for the year ended 31 December can
be found in the Valuation of the Portfolio section on page 38.

Gearing and capital allocation

Responsible balance sheet management and disciplined capital allocation are
key priorities for the Company's Board and Managers, in the current
macroeconomic environment with particular reference to the prevailing elevated
cost of capital compared to recent historic levels and reduced liquidity
within the equity markets. Against this backdrop, managing the Company's
floating rate revolving credit facility ("RCF") and meeting the Company's
construction commitments remain the primary uses of excess cash flows from the
portfolio and proceeds of asset sales.

TRIG's RCF is used to fund investment activities and is repaid from surplus
cash flows, equity fund raises and/or disposal proceeds. The RCF, which was
refinanced in February 2023, has total

funding capacity of £750m and matures in December 2025. As at 31 December
2023, the RCF was drawn £364m.

During the year, the RCF was reduced by £34m as a result of surplus cash
flows generated by assets exceeding construction commitments and the
application of £22m proceeds from asset sales in the year. In

addition the Group's long-term project-level debt, which is predominantly
fixed rate (average of 3.5%), reduced by £219m in the year, to £2.1bn at 31
December 2023.

Over the next 12 months, the Company expects to be able to reduce RCF drawings
to about £150m, which is within 5% of Portfolio Value, using proceeds from
disposals and organic cash flows.

Portfolio-level debt is structured to amortise over the remaining period of
government subsidy and revenue support mechanisms. On current projections,
portfolio gearing is expected to reduce to 23% by 2030, providing capacity to
regear to fund future investment activities.

The Company has limited cash flow exposure to rising interest rates due to
fixed interest rate borrowings and no refinancing risk across the project
companies. All portfolio-level debt amortises over the subsidy period.

The reduction in RCF drawings is expected to be achieved through a combination
of excess portfolio cash flows and further divestments. When establishing
which assets to divest, consideration is given to the impact of the divestment
on portfolio composition, including technology, revenue and geographical
diversification.

Surplus portfolio cash flows have also been used to fund the Company's
construction activities during the year. Over 2023, construction spend of
£92m was met by surplus operational cash flows. Remaining commitments of
£131m in 2024 and 2025 are also expected to be funded from operational cash
flows.

The Company may also make accretive investments where there is a compelling
rationale to further the Company's strategic priorities. In the absence of
compelling investments, the Company may consider share buybacks. Any such new
investments may, in the first instance, be funded from drawings under the RCF,
which would act as a bridge to permanent funding for example from organic
excess cash flows, divestment proceeds and/or structural debt.

Dividend

The dividend target for 2024 has been set at 7.47p per share, representing a
4% growth on the 2023 dividend. In increasing the dividend by 4% from 2023,
the Board and the Managers have considered not only inflation which in 2023
was c.4% across portfolio geographies and in 2024 is forecast to be
c.2.75%,(1) but also the strength of the Company's cash flows and prospects
underpinned by its indexed subsidy income and construction and development
activity.

1.     Operational cash flow generated is reconciled to the cash flow
statements as follows: Cash flow from investments £339m less Company
(including its immediate subsidiaries TRIG UK

and TRIG UK I) expenses £56m plus project-level debt repayments £219m.

2.     The unaudited revenue and EBITDA figures presented are based upon
the aggregation of SPV-level revenues and operating costs measured on a
consistent basis across regions.

3.     The most recent audited valuation, adjusted for cash distributions
received since 31 December 2022.

Investment Highlights

TRIG consistently benefits from a large, diversified and balanced portfolio
with investments spread across different geographies, technologies, revenue
types and project stages to mitigate risk.

The Investment Manager takes a careful and considered approach to portfolio
composition. The risk-reward profile of new investments is appraised alongside
alternative uses of the Company's surplus cash flows, in particular reducing
RCF borrowings and share buybacks.

The Managers' successful delivery of projects through development and
construction stages into operations is a key route to creating value for
shareholders. Several significant milestones were reached during the year,
including the commissioning of four solar projects in Spain and the Grönhult
onshore wind farm in Sweden. Adding 301MW of operational capacity to the
portfolio, these projects strengthen and further diversify the Company's
revenues. Approximately half of the construction risk premia across these
investments has been released and reflected in an increase in the valuation of
these investments by c.0.6p per share. The remaining construction risk premia
will be released as operational performance

is further evidenced in steady state operations.

TRIG's ongoing construction projects continue to progress well. At the
Ranasjö and Salsjö (Twin Peaks) onshore wind farms in Sweden, all turbines
have been erected with the commissioning phase well progressed. The sites are
expected to be operational by the end of Q1 2024.

The Board and the Managers continues to see battery storage as a critical
sector for the European energy transition as batteries can respond to price
signals, provide flexibility and support grid stability. Storage assets are
particularly complementary within a portfolio of renewables generation assets
which can absorb the higher volatility commensurate with the higher returns
battery storage investment offers. The development of the four battery storage
projects each of two-hour duration which were acquired in late 2022 has
progressed well. Final Investment Decision ("FID") on the 74MW Ryton project
was reached in Q3, with construction scheduled to commence in Q1 2024.
Operational takeover is expected during 2025. On the 90MW Drakelow battery
storage project design work is underway with FID expected in H1 2024.
Additionally, a follow-on mezzanine loan was made to the Phoenix investment in
France to enable our partner, Akuo, to enhance existing solar sites with 25MW
of new co-located battery storage capacity on Corsica and La Reunion.

Significant value in battery storage investment is secured through strategic
land rights and grid connections secured at the development stage. The
acquisition of Fig Power post period end comprising an advanced pipeline of
400MW across eight projects with grid offers ranging from 2025 to 2033, and a
further 3.6GW of identified sites, provides TRIG with the opportunity to
capitalise on the attractive UK battery storage market. In addition to a
pipeline of projects for TRIG to build, the Investment Manager expects that,
taking into account factors including portfolio balance and weightings, there
will be opportunities to sell developed projects to third parties and
crystallise a development profit for TRIG.

Development activities have also progressed for the repowering of the Cuxac
and Claves onshore wind projects (23MW) in France, and the Altahullion onshore
wind farm (38MW) in Northern Ireland. Additionally, the opportunity to
leverage the grid connection and land space at the Cadiz solar projects
through the addition of onshore wind is being evaluated.

In total, the Managers have identified a development pipeline of c.1GW to
reach FID by 2030, including development stage projects acquired and portfolio
repowering, expansion and co-location opportunities. Return hurdle rates in
current market conditions for new development stage investments on a develop,
build and hold basis is typically 12%+ depending on the remaining development
milestones, the complexity of construction and operations, which can be
technology dependent, risk allocation and the expected revenue profile. The
Company's robust capital structure, the excess cash flows generated by TRIG's
existing portfolio and the Investment Manager's active approach to asset
rotation means the pursuit of this pipeline is not dependent on equity capital
markets.

Current outstanding commitments

As at 31 December 2023, the Company has outstanding investment commitments
(for construction activities) of £131m relating to the Swedish onshore wind
construction projects (Ranasjö and Salsjö), two of the UK battery storage
projects (Ryton and Drakelow), and in relation to the acquisition cost of Fig
Power and expected funding of the company's overheads and development
expenditure for the initial two years of the business plan set out in the
table below by expected due date. The Company's £750m committed RCF was drawn
£364m as at 31 December 2023. The vast majority of the investment commitments
relate to investment in higher returning and diversifying UK battery storage
projects.

                                2024  2025  Total
 Outstanding commitments (£m)   60    71    131

 

 

 

 

 

 

Revenue profile

TRIG benefits from diversification across several power markets, with projects
in Great Britain, the Single Electricity Market (Northern Ireland and the
Republic of Ireland), the main continental European power market (France and
Germany), the Nordic market (Sweden) and the Iberian market (Spain).

TRIG's portfolio cash revenues have substantial medium-term protection from
movements in power prices as the portfolio receives a high proportion of its
revenue from government subsidies such as Feed-in-Tariffs ("FiTs"), Contracts
for Difference ("CfDs"), Renewable Obligation Certificates ("ROCs") or from
selling electricity generated via Power Purchase Agreements ("PPAs") with
fixed prices or from other hedges, together referred to as fixed revenues.

The Group(1) receives a portion of its revenues in Euros; 42% of the portfolio
by value is invested in Euro-denominated assets,(2) the Group employs foreign
exchange hedging to significantly mitigate the cash flow and valuation
exposure to this risk, as expanded upon in the Valuation of the Portfolio
section on page 41.

The Investment Manager implements the Company's foreign exchange hedging
policy through Sterling-Euro swaps for up to four years forward. As a result
of the interest rate differential between UK and the Eurozone, forward foreign
exchange contracts over the next four years have been struck at levels better,
in Sterling terms, compared to the foreign exchange rate as at 31 December
2023 and used in the portfolio valuation.

The chart on page 23 of TRIG's 2023 Annual Report reflects the portfolio's
forecast revenues.

Principal risks and uncertainties

TRIG's principal risks, approach to risk management and counterparty exposures
are set out in the Risk and Risk Management section of this report. Below is a
commentary on the key movements in these risks in the period.

In addition, in a macroeconomic environment where inflation and interest rates
have been elevated, the correlation of portfolio returns to inflation and the
Company's approach to long-term, fixed-rate and amortising structural debt are
key risk mitigants. The macroeconomic backdrop has also increased pressure on
supply chain balance sheets where fixed price contracts are being delivered
whilst costs are increasing and original equipment manufacturers ("OEMs") are
reducing their spares capacity as they focus on improving their profitability.

Regulation and taxation

The risk of government or regulatory support for renewables changing
adversely.

2023 saw the implementation of windfall taxes on the electricity generation
sector by UK and mainland European countries. In the UK, the Electricity
Generator Levy is in place until 2028. In the EU, some of these levies expired
on 30 June 2023 with several countries, including Germany, not extending the
period of application. There remains a risk that further intervention may
result if electricity prices were to increase significantly again; however,
current power price forwards and the forecasts used in the valuation of the
portfolio are below the recent intervention price levels.

The UK and EU governments continue to assess options to reform electricity
markets, including how the wholesale electricity price is set and whether new
long-term revenue support contracts should be made available to existing
generators. TRIG's approach to diversify political and regulatory risk across
jurisdictions helps to reduce the impact on the portfolio from individual
risks at the national level. A range of technologies and locations across the
UK reduces, but does not remove, the risks associated with the potential
implementation of locational pricing in the GB power market.

Power prices

The risk of electricity prices falling or not increasing as expected.

Power prices have been particularly volatile since 2020, with periods of very
low pricing experienced during the Covid-19 pandemic and very high prices
since the outbreak of the conflict in Ukraine.

Power prices trended lower during 2023 with forwards continuing

this trend for the next three years, but they remain elevated compared to
pre-Covid-19 levels. This decline is driven by increased levels of European
gas storage, projected increases in LNG supply from 2025, reduced demand due
to milder weather patterns and reduced fears of French nuclear supply
problems. Windfall taxes including a combination of infra-marginal power price
caps implemented in Europe and the Electricity Generator Levy in the UK
reduced sensitivity to this change. Near-term forwards are now at levels below
government intervention thresholds.

There has been little change in the long-term fundamentals of power prices in
the period, leading to limited movements in long-term power price forecasts
compared to those as at 31 December 2022 in most geographies.

The valuation of the Company's portfolio overlays market derived forward
prices to a blend of cannibalised power price forecast curves produced by
three independent forecasters. There is a risk that actual power prices
achieved are below these forecasts.

As the penetration of renewables increases and therefore intermittency of
energy systems increases, TRIG will be more actively seeking to provide
balancing services to the grid through battery storage. By discharging
electricity during periods of low generation and absorbing excess electricity
in periods of high renewable availability, batteries are able to smooth the
intra-day price volatility associated with variable renewable resource.

Production performance

The risk that portfolio electricity production falls short of expectations.

Weather resource was below budget in the period, particularly wind in the UK
and Ireland. The overall shortfall against budget was moderated by portfolio
diversification, particularly the solar portion of the portfolio which was
ahead of budget for the period. Portfolio diversification has been enhanced in
the period with the commissioning of the Cadiz solar projects in Spain and the
Grönhult onshore wind farm in Sweden. The Operations Manager continues to
develop and oversee the deployment of energy yield value enhancements to
improve generation output.

Counterparty credit

The risk of failure of a major supplier

TRIG's portfolio is weighted towards wind-power assets, a sector that is
dominated by a small number of equipment manufacturers. Counterparty failure
could result in equipment not being supplied to construction projects or
operational and maintenance services not being provided to commissioned
projects or being disrupted. Given the current challenges faced by some
equipment manufacturers due to cost escalation in the current macro
environment, counterparty credit risk has been elevated in the period (for
further detail, see the Risk and Risk Management section).

Construction activities are limited by TRIG's Investment Policy cap of 25% of
portfolio value and were 7% of portfolio value at 31 December 2023. Equipment
for the Twin Peaks (Ranasjö and Salsjö) construction projects has been
delivered to site reducing counterparty credit risk. Remaining construction
projects are in the battery storage sector where there is a wider range of
equipment suppliers compared to the wind sector.

The increase in independent operations and maintenance service suppliers
reduces dependence on the original equipment manufacturers, particularly with
respect to onshore technologies.

Outlook

The volatile macroeconomic environment continues to be the primary driver of
public market valuations across the real assets sector. However, towards the
end of 2023 market signals indicated that the interest rate cycle has peaked
across developed markets, with inflation now significantly below recent highs.
Despite the increase in valuation discount rates, particularly significant in
the UK, resilient valuations were evidenced in the period through TRIG's
divestments together with the strong underlying cash flow generation of the
portfolio. These results demonstrate the continued disconnect between private
and public market valuations for renewable infrastructure.

As long-term investors through multiple economic cycles, it is the Investment
Manager's experience that having a robust balance sheet, a disciplined capital
allocation framework and strong governance allows the most nimble parties to
access emerging opportunities as markets recover. TRIG has significant growth
potential with c.1GW capacity across existing investments that could be
developed, built and commissioned by 2030. The Fig Power investment represents
a platform from which TRIG can create further development pipeline and
investment opportunities, both for TRIG and to sell on to third parties. The
Company's structural de-gearing creates debt capacity, which taken together
with asset rotation can fund investment opportunities as they arise without
dependence on equity capital markets.

These activities mean that the Company is well placed to continue its track
record of delivering income and capital growth - with the potential for
capital growth to become a more meaningful element

of the total return to shareholders.

1.     The Company, TRIG UK, TRIG UK I and its portfolio of investments
are known as the "Group".

2.     Including Sweden which receives electricity revenues from Nord Pool
in Euros.

 

Operations Report

Operational performance

                              2023 Electricity production (GWh)  2023 Variance to budget
 Onshore   UK & Ireland       1,492                              -13%
           France             662                                +1%
           Scandinavia        675                                -12%
 Offshore  GB                 1,472                              -2%
           Germany            808                                -7%
 Solar     GB, France, Spain  877                                +1%
 Total                        5,986                              -6%

The financial performance of the portfolio remains strong, driven by elevated
electricity and renewables certificate pricing, despite underlying generation
having been 6% below budget for the year.

The geographic diversification of the portfolio has meant the lower than
long-term average weather resource in three regions (UK & Ireland Onshore,
GB Offshore and Scandinavia) was partly offset by above budget weather
resource in three other regions (France, Germany Offshore and Solar).

Underlying generation performance was affected by grid downtime in excess of
budget allowances, and site-specific factors including repair or enhancement
works to improve the operational resilience of generation equipment and
electrical infrastructure.

The newly constructed Spanish solar projects near Cadiz performed well in
their first year of full operations, further bolstering the portfolio's
technological and geographical diversification.

The Ranasjö and Salsjö Swedish onshore wind farms have also commenced early
generation, as detailed in the Construction section on page 31.

Onshore wind

UK & Ireland

Performance in the region was negatively impacted by low wind resource despite
good availability across most GB sites. Availability in Northern Ireland was
adversely affected by major component replacement works and exacerbated by
long lead times on spare parts.

New operations & maintenance contracts were signed for three projects,
further leveraging TRIG's portfolio purchasing power while capturing
site-specific technical requirements.

At Blary Hill, TRIG's first subsidy-free GB windfarm, a ten-year corporate PPA
was signed, securing fixed revenue per unit generation at an attractive price.

A multi-year blade repair programme commenced in the year across five sites.
The opportunity was taken to undertake aerodynamic studies and commence a
related blade enhancement project beginning with installation at two of these
sites - as referenced in the Enhancements section. This is in addition to
other blade enhancement activities elsewhere within the region.

Grid constraints and curtailments continue to be an issue in both Northern
Ireland and the Republic of Ireland.

France

Across France, wind resource was very strong in 2023. Good availability across
the 11 sites in the north of France was offset by poor availability at the
four older sites in the south.

The repowering activities at the four southern sites continue to progress
well, with ongoing operations adjusted to reduce exposure to high loading
during more turbulent wind periods, to preserve the operational life of the
major components in their remaining years - see the Enhancements section on
page 32 for more information.

In July 2023, Rosières wind farm suffered a total blade loss on one of its
eight turbines following a large lightning storm. Replacement activities and
an insurance claim are underway. The turbine is expected to return to service
in Q1 2024.

The Vannier wind farm completed its first full year of operations, achieving
high, above-budget availability, maximising the wind farm's ability to take
advantage of the good wind resource in the year.

Scandinavia

Jädraås continues to perform well operationally with strong availability;
however, poor wind resource and significant icing-related losses have led to
below budget performance.

2023 was Grönhult's first year of operations. Downtime associated with
troubleshooting activities in the ramp up phase is compensated under the
turbine manufacturer's availability warranty.

Offshore wind

GB

Production for the GB offshore wind portfolio was marginally below budget for
the year. Wind resource in South East England was above long-term averages,
and in North East England and off the East coast of Scotland was below
long-term averages.

A scheduled transmission outage at one of TRIG's offshore wind projects, to
enable connection to the grid of a neighbouring site, was delayed by the grid
company from the low-wind summer months to mid-winter. Upon re-energisation, a
third-party switchgear failure notably extended the outage for half of the
site, with higher associated uncompensated losses incurred.

Another offshore site suffered a partial outage of the offshore transmission
cable owned by the OFTO post period end.

Construction of a neighbouring site to one of TRIG's offshore projects
resulted in wake compensation payments being received to offset some of the
valuation impact of a reduction in the forecast energy yield.

Materially improved terms were secured on a major operation and maintenance
contract for one asset in the region, with the value upside materialising over
the 10-year term of the contract.

End of warranty inspections have been a core theme for the region given the
young age of the assets, with a campaign of proactive investigative works
underway to identify and resolve any potential defects under warranty or
secure protection against their subsequent cost of resolution. There are also
a range of ongoing contractual performance protections post warranty.

Germany

Performance in the region was below budget in the year largely due to
uncompensated grid outages on one site for which reinforcement works are
scheduled in 2027, whilst the other site suffered from several hydraulic and
cooling system challenges that will be resolved in Q1 2024.

Blade leading edge protection works at Merkur have progressed significantly
through the year to improve the long-term integrity of the blades. The
significant works are well progressed, having been performed under warranty by
the turbine manufacturer, including lost revenue protection.

At Gode 1, the grid operator has constructed and commissioned a new offshore
substation for future neighbouring windfarms. In the years until these
neighbouring projects are completed, this substation provides an alternative
electricity import and export route for Gode 1 in the event of an outage on
its main substation, thereby reducing the risk and extent of future
grid-related losses.

A change in German tax administration means that Merkur and Gode will be
changing from paying tax in arears to paying tax in advance, which will bring
tax payments forward and reduce 2024 distributions from these projects.

Solar

The solar portfolio outperformed budget for the year, as irradiance levels
were favourable across all geographies.

In Spain, the four Cadiz sites achieved full operations ahead of the budgeted
takeover date.

Within GB solar one site suffered a 12-week grid outage imposed by the local
grid network operator, which was uncompensated, but losses were successfully
mitigated by a focussed engagement with the grid operator to enable day-ahead
agreement of export hours.

Warranty claims are underway for underperforming PV modules across three of
the smaller sites. Proactive module replacement works were performed at one
site following a successful warranty claim; whilst this weighed on the site's
production in the year, it is expected to benefit from improved production in
periods to come.

In 2020, the French state sought to significantly reduce the tariffs awarded
to select solar projects from the 2006 & 2010 vintages. Through extensive
engagement in the tariff revision process and associated legal challenges, the
French state ultimately dropped the action, allowing the projects' value to be
fully preserved and a proactive operating strategy to maintain and enhance
performance to be reinstated.

Weather analysis

The graph on page 30 of TRIG's 2023 Annual Report shows hindcast analysis of
annual variances of wind and solar resource as a percentage variation to the
long-term average for TRIG's operating portfolio, by region/technology.

The analysis shows the variability of weather, with as much as 15%-20%
variation in any one region over the course of a year. When considered across
the portfolio this variation is reduced to within 10% of the long-term
average, illustrating one of the benefits of the geographic and technological
diversification of the TRIG portfolio.

Manufacturer exposure

Working with a range of suppliers is important to manage counterparty and
technology risk. TRIG's portfolio is diversified across a range of different
models and vintages of wind and solar technology. TRIG has exposure to many
different equipment manufacturers, with Siemens Gamesa Renewable Energy
("SGRE") being the largest of these on a Portfolio Valuation basis.

Issues with equipment inevitably occur from time-to-time across different
manufacturers. The Company has not been materially impacted by these due to
contractual protections in place and repairs or correction works being carried
out. This includes a range of different contract types, some of which are
long-term and all-inclusive, providing protection against expenditure and
downtime. End-of-Warranty inspections are also pro-actively conducted,
providing time for any issues to be rectified ahead of expiry, and we take a
pro-active approach to strategic spares - more information on this is
contained within the Enhancements section.

The combination of visibility across the TRIG portfolio, InfraRed's credit
monitoring and RES's market awareness, allows the identification of potential
issues in advance and focus on monitoring the areas with the greatest
potential risks.

Construction

The four Spanish Cadiz solar projects successfully reached operations in Q1
2023, significantly increasing the size of TRIG's operational solar portfolio
by 234MW and thus strengthening TRIG's technological and geographical
diversification. Our independent Owner's Engineer will continue to be closely
involved in the projects until the end of the construction warranty period, to
help ensure any defects are captured under the warranty and thereby protect
long-term quality and cost exposure.

Following first export in October 2022, the 67MW Swedish onshore windfarm
Grönhult achieved operational takeover in Q2 2023, with snagging works
completed in the year.

Swedish wind farms Ranasjö and Salsjö, in which TRIG has a 50% equity stake,
remain on target to achieve contractual takeover in H1 2024 with all turbines
erected during the year, the grid connection energised and early generation
achieved from the first turbines commissioned. Once fully operational, TRIG's
50% share of the two projects will represent 121MW generation capacity.

The Battery Supply Agreement for the 78MW / 156MWh (two-hour battery) Ryton
site was signed in Q3 2023. Pre-construction works commenced in January 2024.

Design works for the 90MW / 180MWh (two-hour) Drakelow battery storage project
are progressing well with a revised planning submission underway. The project
remains on track to start construction in Q4 2024.

Health & safety

Delivering high-quality health and safety continues to be the top priority for
the portfolio's companies. The portfolio company asset managers promote a
strong safety culture through a proactive approach, utilising safety drills,
training days and internal and external audits, among other activities, which
complement the core safety frameworks. The Operations Manager continues to
engage with the asset managers to ensure sharing of best practice and lessons
learned across the portfolio, with oversight being provided by each project
company board as well as the TRIG Advisory Committee and TRIG Limited Board of
Directors.

In respect of the year under review, health & safety performance compares
favourably against industry benchmarks.

The standard of health & safety reporting remains high across the
portfolio with good transparency and follow-up of incidents. There has been a
continued focus on leading indicators such as the number of independent and
internal safety audits or reviews, hazard identifications and safety walks.

TRIG continues to regularly host a biannual portfolio health & safety
coordination group to foster relationships between the various asset managers
across the portfolio, share information and discuss matters that have occurred
within the industry.

A large number of targeted drills and exercises were conducted across the
portfolio by RES. TRIG's partners also undertook drills and exercises
including the following: Drills were carried out by Fred Olsen in relation to
chemicals and first aid; Numerous drills were undertaken at Beatrice including
first aid, vessel fire, collision and man overboard; Merkur successfully
completed a helicopter medical incident and rescue drill; Gode undertook
drills in unexpected walk-to-work gangway disconnect and man overboard
training; the Cadiz projects hosted the fire service for familiarisation and
site-specific training. Learnings from all drills and exercises are shared
across the portfolio by the Operations Manager.

Enhancements

As Operations Manager, RES is dedicated to enhancing portfolio performance,
shareholder returns and stakeholder value through both commercial and
technical initiatives. RES applies a structured framework to identify,
appraise and implement enhancements at both individual and portfolio levels.
Examples of the enhancements secured during 2023 include:

Increasing revenues:

Blade improvements to increase generation:

-    The roll-out of a package of aerodynamic improvements to multiple
turbines' blades at five sites in the GB wind portfolio (100% owned projects
with total site capacities of 107MW) is well progressed, with the remaining
turbines to be completed in summer 2024. Parts are on order for two further
sites for installation in summer 2024 (TRIG's share of capacity 56MW). A
further three sites (TRIG's share of capacity 14MW) are being appraised for
potential deployment. Some packages also include a suite of parameter changes
to turbine controllers in order to maximise the additional energy yield gained
from the hardware upgrades. Energy yield uplifts of 5% are being targeted on
each site, consistent with the energy yield uplift achieved at the trial site.

Wind turbine software enhancements to improve operational efficiency using
advanced technologies:

-    The wake steering and collective control trial at Altahullion in
Northern Ireland has completed with independent energy yield uplift analysis
to conclude in Q1 2024. This enhancement is an innovative retrofitted upgrade
to increase production and reduce turbine loads. The application to further
sites is being considered.

-    Contracts have been agreed for the implementation of a turbine
manufacturer's wake steering system at two offshore wind farms, which reduces
wake losses by optimising individual turbines based on wind conditions and
operational states. Next steps are preparation works and a control
optimisation period. Proposals obtained for other offshore projects are being
considered.

-    Pitch and yaw optimisation upgrades have been successfully implemented
at one offshore site. The upgrades correct any existing yaw and pitch
misalignment while offering continuous monitoring for any future deviations.
Results to date indicate an energy yield uplift of c. 0.2%.

-    Validation of a suite of yield enhancing software upgrades implemented
by RES at Garreg Lwyd wind farm in Wales has been completed following
implementation in 2021, confirming a >1% increase in the energy yield.

Minimising lost production:

-    The advanced shadow flicker control system developed by RES has been
installed at Blary Hill in Scotland and is currently in its trial phase. The
cloud detection anti-shutdown control will reduce unnecessary lost production.

-    A framework agreement with RES for inverter strategic spares has been
signed across eight GB solar projects that will reduce downtime for long-lead
time items and thereby maintain production, whilst also enabling TRIG to
leverage the portfolio purchasing power.

Enhancing revenue quality:

-    The Blary Hill onshore wind farm entered into a Corporate Power
Purchase Agreement ("CPPA") for a ten-year period on pay-as-produced terms.
This provides the project with long-term price security and improves value on
a risk-adjusted basis.

Reducing operating costs:

-    A significant reduction in the cost of a core operations &
maintenance contract, with minimal changes to contract scope, for an offshore
wind farm was achieved following extensive negotiations alongside investment
partners, improving upon the investment case.

-    TRIG has an active approach to identifying and managing strategic
spares, enabling parts to be obtained on improved prices and terms and then
held for deployment across multiple sites, thereby reducing exposure to
downtime due to long lead-time items. The level and type of strategic spares
remains under appraisal as any tightening of supply is identified.

Project life extension and repowering:

-    Financing battery augmentation: The installation of additional battery
storage at a hybrid solar and battery project within the Phoenix
mezzanine-level bond portfolio, was completed. TRIG provided financing through
a follow-on loan.

-    Life Extension: Work continues across TRIG's onshore wind and solar
projects in the UK and Ireland. Key achievements in the period were extensions
to Meikle Carewe and Earlseat planning consents.

-    Repowering activities continue to progress in France: Land agreements
have been signed with the local municipality for Cuxac in the period and
index-linked tariff secured. Decommissioning of the first site is expected to
commence in Q4 2024.

-    First repowering joint venture is underway in UK and Ireland: Key
development agreements for Altahullion repowering have been signed with RES.
Negotiations on development agreements underway on more projects.

Portfolio operations crisis management

RES has a globally consistent approach to crisis and issues management
covering all areas of its business, aligned with the relevant international
standard.

RES adopts a process of assessing, planning, training and exercising for an
effective response to crisis management. It has put in place a crisis
management standard setting out its crisis definition and criteria, escalation
processes, roles and responsibilities, and training and exercising
requirements. This is supported by a Group Crisis Management Plan and specific
Country Crisis Management Plans. RES has undertaken an extensive training
programme.

During 2023, 80 people across RES were trained to undertake specific roles on
crisis management teams and exposed to exercise situations to create a crisis
resilience culture. RES has a rolling programme of crisis simulation exercises
at all levels across its business to test processes, approaches and
preparedness. Where RES enters a new market there is a clear process to align
and train people in its crisis management approach.

Directors' Statement of Responsibilities

The Directors are responsible for preparing the Directors' Report and the
financial statements in accordance with applicable law and regulations.

The Companies (Guernsey) Law, 2008 requires the Directors to prepare financial
statements for each financial year. Under that law the Directors are required
to prepare the group financial statements in accordance with International
Financial Reporting Standards (IFRS) as adopted by the European Union.

Under company law the Directors must not approve the financial statements
unless they are satisfied that they give a true and fair view of the state of
affairs of the Company and of the profit or loss of the Company for that
period.

In preparing these financial statements, International Accounting Standard 1
requires that Directors:

-    Properly select and apply accounting policies;

-    Present information, including accounting policies, in a manner that
provides relevant, reliable, comparable and understandable information;

-    Provide additional disclosures when compliance with the specific
requirements in IFRSs are insufficient to enable users to understand the
impact of particular transactions, other events and conditions on the entity's
financial position and financial performance; and

-    Make an assessment of the Company's ability to continue as a going
concern.

The Directors are responsible for keeping proper accounting records that are
sufficient to show and explain the Company's transactions and disclose with
reasonable accuracy at any time the financial position of the Company and
enable them to ensure that the financial statements comply with the Companies
(Guernsey) Law, 2008. They are also responsible for safeguarding the assets of
the Company and hence for taking reasonable steps for the prevention and
detection of fraud and other irregularities.

The Directors are responsible for the maintenance and integrity of the
corporate and financial information included on the Company's website.
Legislation in Guernsey and the United Kingdom governing the preparation and
dissemination of financial statements may differ from legislation in other
jurisdictions.

 

Directors' responsibility statement

We confirm that to the best of our knowledge:

-    The financial statements, prepared in accordance with International
Financial Reporting Standards, give a true and fair view of the assets,
liabilities, financial position and profit or loss of the Company;

-    The Chair's Statement, the Strategic Report and Report of the
Directors include a fair review of the development and performance of the
business and the position of the Company and Group taken as a whole together
with a description of the principal risks and uncertainties that it faces; and

-    The annual report and financial statements when taken as a whole are
fair, balanced and understandable and provide the information necessary for
shareholders to assess the Company's position, performance, business model and
strategy.

This responsibility statement was approved by the Board of Directors on 27
February 2024 and is signed on its behalf by:

Richard Morse

Chairman

27 February 2024

Publication of documentation

The above information is an extract from TRIG's 2023 Annual Report. The Annual
Report has been submitted to the National Storage Mechanism and will shortly
be available for inspection
at: https://data.fca.org.uk/#/nsm/nationalstoragemechanism
(https://eur02.safelinks.protection.outlook.com/?url=https%3A%2F%2Fdata.fca.org.uk%2F%23%2Fnsm%2Fnationalstoragemechanism&data=02%7C01%7Cphilippe.vuillaume%40partnersgroup.com%7C9921b2a94ca84f80abd008d83e0034f3%7C0bcc0075229d4973b0c30ef63eb9c51f%7C0%7C0%7C637327517903944751&sdata=7xdHtTc7SAh63in9nIZT0csRmMwIWJIIjmp6yNOLWDo%3D&reserved=0)
. It can also be obtained from the Company Secretary or from the Reports &
Publications section of the Company's website, at https://www.trig-ltd.com/
(https://www.trig-ltd.com/) .

 

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