Triple Point Energy - Update on Operations, Deal Exclusivity and RCF
01/02/2022 06:59
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RNS Number : 2295A Triple Point Energy Efficiency 01 February 2022
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1 February 2022
Triple Point Energy Efficiency Infrastructure Company plc
("TEEC" or the "Company" or together with its subsidiaries, the "Group")
Update on Operations, Deal Exclusivity and Revolving Credit Facility
Triple Point Energy Efficiency Infrastructure Company plc (ticker: TEEC), a
closed-ended investment company investing in a diverse portfolio of energy
efficiency assets in the United Kingdom, is pleased to provide an update on
its operations, deal exclusivity and pipeline development.
Update on the Hydro Portfolio
· Towards the end of 2021, TEEC invested £47 million across a
portfolio of nine ungeared hydroelectric power assets, with a total generation
capacity of 6.6 MW.
· Q4 2021 performance of the portfolio was 17 per cent. ahead of
budget (which provides the base case for valuation purposes) from a generation
and revenue perspective, and 5 per cent. ahead in terms of availability.
· c.90 per cent. of revenues for the Hydro Portfolio are
underpinned by government supported Feed in Tariffs ("FiT") with a remaining
FiT period of c.14 years.
· All FiT revenues under the Hydro Portfolio benefit from annual
indexation to UK RPI, with the next uplift due in April 2022. With UK RPI
currently at c.7.5 per cent., this is expected to result in a meaningful
uplift to revenues and underpins the highly defensive and attractive nature of
this portfolio.
· The Investment Manager and the operations and maintenance
provider have commenced investigative work aimed at enhancing the performance
of the hydro assets further (the "Hydro Enhancement Programme").
· The Hydro Enhancement Programme revolves around optimising the
flow from the catchment area which will improve the generation profile for the
assets. A key aspect of this programme is the re-instatement of peatland which
has significant associated environmental benefits related to biodiversity and
carbon sequestration.
Update on the CHP+ Portfolio
· Earlier in 2021, TEEC invested a total of £29 million across
three CHP+ assets in the form of senior debt with a weighted average return on
capital of 7.65 per cent. The underlying assets comprise:
o Harvest and Glasshouse (March 2021) - two operational, established energy
centres on the Isle of Wight comprising 22 MW of power generation facilities;
and
o Spark Steam (June 2021) - one operational, established energy centre
located in Teesside comprising 3.3 MW of power generation facilities.
· Each of the CHP+ assets supply heat, electricity, and also carbon
dioxide to the UK's largest tomato grower.
· Spark Steam has signed a new, additional Power Purchase Agreement
with a well-known, large food manufacturer through a private wire arrangement.
This arrangement benefits the food manufacturer by providing it with savings
against its electricity costs, whilst enabling Spark Steam to benefit from a
greater level of contractual cashflows at more attractive rates. By supplying
power through a short private wire, significantly greater energy savings will
be made than previously expected due to much reduced transmission losses as
compared to sales to the national grid.
Deal exclusivity and Pipeline development
Battery Energy Storage Systems opportunity
The Investment Manager, on behalf of the Company, has been looking at a number
of opportunities to invest in grid-scale battery energy storage systems in the
UK. These fall within the distributed energy segment of TEEC's mandate.
We are pleased to announce that the Investment Manager has secured, under
exclusivity, a near-term pipeline of £108 million of grid-scale battery
energy storage systems assets which it is progressing.
With the continued roll-out of intermittent renewable energy facilities across
the UK's grid, demand for grid balancing and storage solutions in the UK is
likely to stay high for a significant period of time. Grid-scale battery
energy storage systems provide one of the most effective and proven solutions
to the issue of loss of electricity in transmission, storing power when it is
produced in excess and then making it available when demand is higher.
Wider pipeline
In addition to the grid-scale battery energy storage system opportunities
under exclusivity, the Investment Manager is also in discussions on a wider
pipeline of £454 million across a range of sectors.
RCF
Following the investment in the additional portfolio of Hydro Assets announced
in December 2021, TEEC is now substantially deployed. To fund the short-term
pipeline and to allow greater financial flexibility going forwards, TEEC is in
the process of arranging a revolving credit facility ("RCF") of up to £40
million.
John Roberts, the Company's Chairman, said:
"I am pleased with the performance of TEEC's existing investments as well as
the emerging diverse pipeline of high quality assets which provides a great
opportunity to accelerate TEEC's growth ambitions. Batteries are essential to
improve front of meter energy efficiency, to maximise and make use of the
intermittent power from the grid scale renewables which are making up an
increasingly larger proportion of the UK's generating capacity."
For further information, please contact:
Triple Point Investment Management LLP 020 7201 8989
Jonathan Parr
Jonathan Hick
Akur Limited (Financial Adviser) 020 7493 3631
Tom Frost
Anthony Richardson
Siobhan Sergeant
RBC Capital Markets (Joint Broker) 020 7653 4000
Matthew Coakes
Jill Li
Kathryn Deegan
Winterflood Securities (Joint broker) 020 3100 0000
Neil Langford
Hande Derinkok
LEI: 213800UDP142E67X9X28
Further information on the Company can be found on its website:
www.tpenergyefficiency.com (http://www.tpenergyefficiency.com) .
NOTES:
The Company is an investment trust which invests exclusively in a diversified
portfolio of Energy Efficiency assets in the UK, which have a positive
environmental impact. The Company's investments will focus on the core sectors
of industrial energy efficiency, distributed generation, and battery storage
solutions.
The Investment Manager is Triple Point Investment Management LLP ("Triple
Point") which is authorised and regulated by the Financial Conduct Authority.
Triple Point manages private, institutional, and public capital, and has a
proven track record of investment in Energy Efficiency and decentralised
energy generation projects.
The Company was admitted to trading on the Specialist Fund Segment of the Main
Market of the London Stock Exchange on 19 October 2020 and was awarded the
London Stock Exchange's Green Economy Mark.
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