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NextEnergy Solar Fund Limited (NESF) announced on 31 October 2022 the acquisition of development rights, permits, and initial grid milestones for 'Project Lion', a 250MW battery storage portfolio in the East of England, for £32.5 million. This increases NESF's announced standalone battery storage in its joint venture with Eelpower to 300MW, with the 500MWh system expected to be energised in 2025. Full construction is subject to shareholder and FCA approval due to NESF's existing investment policy limit of 10% of Gross Asset Value into energy storage.
| Date | 31 Oct 2022 |
| Time | 07:00:07 |
| Category | Acquisitions and alliances |
| ID | 5699E |
LEI: 213800ZPHCBDDSQH5447
31 October 2022
NextEnergy Solar Fund Limited
("NESF" or the "Company")
250MW Battery Storage Project Acquisition
NextEnergy Solar Fund, the specialist solar and energy storage climate impact fund with a combined installed power capacity of 865MW, is pleased to announce it has acquired the development rights, permits, and initial grid milestones for a 250MW portfolio of high-quality battery storage projects and grid connections. The strategic portfolio named 'Project Lion', located in the East of England, was acquired for a consideration of £32.5m and will increase the current announced standalone battery storage in NESF's joint venture partnership with Eelpower to 300MW.
Once constructed, the project will provide vital grid balancing services whilst harnessing excess electricity generation from wind at low import prices and then exporting electricity at times of low generation and high prices. The project has secured planning permission and grid connection rights.
The project provides a very attractive return profile for the Company's portfolio as battery storage is a highly complementary technology to solar photovoltaics, being uncorrelated and providing further diversification to the Company's portfolio from a technology, revenue and geographic perspective.
The project is a two-hour (500MWh) duration system and is expected to be energised in 2025, targeting an asset life of at least 50 years.
This announcement sets another key milestone for the Company and further increases NextEnergy Solar Fund's participation in the UK battery storage market. Once energised, the project will significantly contribute to increasing the UK's energy independence and will help accelerate the increased penetration of renewable energy in the UK.
Full construction of the project remains subject to shareholder and FCA approval due to the Company's existing investment policy being limited to 10% of Gross Asset Value into energy storage. The Company's investment manager and advisor, NextEnergy Capital, will continue to consult investors over the coming months to seek support to increase this limit to allow the Company to fully capture the energy storage growth opportunities available to the fund.
Kevin Lyon, Chairman of NextEnergy Solar Fund commented:
"This acquisition of development rights adds significantly to NESF's participation in the UK battery storage investment space. The project will take our battery storage programme up to a capacity of 300MW, showing how NESF has been able to secure a significant development pipeline of storage projects in a short timeframe. NESF offers investors a unique investment opportunity, making a real difference in the transition to net zero."
Michael Bonte-Friedheim, CEO of NextEnergy Group said:
"The project will provide crucial grid balancing services for a congested area in the UK, helping manage the ebbs and flows of renewable energy generation and nationwide demand for electricity. For NESF, it is a site that adds to its burgeoning exposure to UK battery storage, a sector where we, as the investment advisor, see enormous growth potential with synergies to NESF's current solar portfolio. We look forward to constructing this project by 2025 and to operating it for decades into the future."
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For further information: NextEnergy Capital Group Michael Bonte-Friedheim |
020 3746 0700 |
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Aldo Beolchini |
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Ross Grier |
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Peter Hamid (Investor Relations)
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RBC Capital Markets |
020 7653 4000 |
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Matthew Coakes |
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Kathryn Deegan
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Cenkos Securities |
020 7397 8900 |
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James King |
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William Talkington
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Camarco |
020 3781 8334 |
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Owen Roberts |
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Eddie Livingstone-Learmonth |
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Ocorian Administration (Guernsey) Limited |
014 8174 2642 |
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Kevin Smith |
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Notes to Editors1:
About NextEnergy Solar Fund
NESF is a specialist solar and energy storage climate impact fund. The Company is structured as a renewable energy investment company listed on the premium segment of the London Stock Exchange that invests in utility-scale solar power plants and energy storage. The Company may invest up to 30% of its gross asset value in non-UK OECD countries, 15% in solar-focused private infrastructure funds, and 10% in energy storage.
NESF currently has a diversified portfolio comprising of the following:
Solar PV:
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100 operating solar assets across the UK and Italy (primarily on agricultural, industrial, and commercial sites) |
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A 50MW co-investment into a Spanish solar project alongside NextPower III ESG, currently under construction |
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A 210MW co-investment into a Portuguese solar project alongside NextPower III ESG, currently under construction |
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A UK solar project under construction (Whitecross 36MW) |
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A ready-to-build UK solar project (Hatherden 50MW) |
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A $50m commitment into NextPower III ESG (a private solar infrastructure fund providing exposure to both operating and under construction, international solar assets) |
Energy Storage:
Joint Venture Partnership with Eelpower:
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A 50MW standalone battery storage project in Fife, Scotland, currently under construction (part of a £300m joint venture with Eelpower) |
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A portfolio of 250MW pre-construction standalone battery storage projects in the East of England
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Co-located programme:
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First site identified for a 6MW co-located battery storage project at North Norfolk Solar Farm |
The NESF portfolio has a combined installed power capacity of 865MW (excluding NextPower III MW on an equivalent look-through basis).
As at 30 June 2022, the Company had an unaudited gross asset value of £1,198m, being the aggregate of the net asset value of the ordinary shares, the fair value of the preference shares and the amount of NESF Group debt outstanding, and an unaudited net asset value of £717.2m.
NESF's investment objective is to provide ordinary shareholders with attractive risk-adjusted returns, principally in the form of regular dividends, by investing in a diversified portfolio of solar energy and energy storage infrastructure assets. The majority of NESF's long-term cash flows are inflation-linked via UK government subsidies.
For further information on NESF please visit www.nextenergysolarfund.com
Commitment to ESG
NESF is committed to ESG principles and responsible investment which make a meaningful contribution to reducing CO2 emissions through the generation of clean solar power. NESF will only select investments that meet the requirements of NEC Group's Sustainable Investment Policy. Based on this policy, NESF benefits from NEC's rigorous ESG due diligence on each investment. NESF is committed to reporting on its ESG performance in accordance with the UN Sustainable Development Goals framework and the EU Sustainable Finance Disclosure Regulation.
NESF has been awarded the London Stock Exchange's Green Economy Mark and has been designated a Guernsey Green Fund by the Guernsey Financial Services Commission.
Article 9
NESF is classified under Article 9 of the EU Sustainable Finance Disclosure Regulation and EU Taxonomy Regulation.
NESF's sustainability-related disclosures in the financial services sector in accordance with Regulation (EU) 2019/2088 can be accessed on the ESG section of both the NESF website (nextenergysolarfund.com/esg/) & NEC Group website (nextenergycapital.com/sustainability/transparency-and-reporting/).
About NextEnergy Group
NESF is managed by NextEnergy Capital, part of the NextEnergy Group. NextEnergy Group was founded in 2007 to become a leading market participant in the international solar sector. Since its inception, it has been active in the development, construction, and ownership of solar assets across multiple jurisdictions. NextEnergy Group operates via its three business units: NextEnergy Capital (Investment Management), WiseEnergy (Operating Asset Management) and Starlight (Asset Development).
NextEnergy Capital
NextEnergy Capital comprises the Group's investment management activities. To date, NEC has invested in over 350 individual solar plants for a capacity in excess of 2.4GW across it institutional funds. www.nextenergycapital.com
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NextEnergy Solar Fund ("NESF") is a solar infrastructure investment company focused on the UK and other OECD countries, which is listed on the premium segment of the London Stock Exchange. It currently owns 865MW spread among 100 individual operating assets in the UK and Italy, comprising an unaudited gross asset value of £1,198m. NESF is one of the largest listed solar energy investment companies in the world. |
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NextPower II ("NPII") a private fund made up of 105 individual operating solar power plants and an installed capacity of 149MW, focused on consolidating the substantial, highly fragmented Italian solar market. NPII was successfully divested in January 2022, a 2016 vintage vehicle that generated net IRRs in excess of its gross target of 10-12%. |
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NextPower III ESG ("NPIII") is a private fund exclusively focused on the international solar infrastructure sector, principally targeting projects in carefully selected OECD countries, including the US, Portugal, Spain, Chile, Poland and Italy. NPIII is a fund that provides a positive social and environmental impact to the countries it has and will invest into. NPIII completed its fundraise with a total of $896m, including an SMA raised. The target of the fund was $750m. |
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NextPower UK ESG ("NPUK") is a private unlevered fund investing in greenfield subsidy-free solar projects, with PPA's, in the UK. NPUK ESG recently announced its first close at £327 million, which is over 65% of the funds target of £500 million. The UK Infrastructure Bank is the cornerstone investor for the fund and plans to invest up to £250 million on a match funding basis. |
WiseEnergy
WiseEnergy® is NextEnergy Capital Group's operating asset manager. WiseEnergy is a leading specialist operating asset manager in the solar sector. Since its founding, WiseEnergy has provided solar asset management, monitoring and technical due diligence services to over 1,350 utility-scale solar power plants with an installed capacity in excess of 1.8GW. WiseEnergy clients comprise leading banks and equity financiers in the energy and infrastructure sector.
Starlight
Starlight is NextEnergy Group's development company that is active in the development phase of solar projects. It has developed over 100 utility-scale projects internationally and continues to progress a large pipeline of c.10GW of both green and brownfield project developments across global geographies.
Notes:
1: All financial data is unaudited at 30 June 2022, being the latest date in respect of which NESF has published financial information