Bluefield Solar Income Share Discussion Threads

[ammons] 27/8/2022 09:19

"............Like other renewable energy funds, BSIF has been boosted by soaring power prices and surging inflation. Nearly two-thirds of its revenues come from government-backed, inflation-linked subsidies..........."

Given the position the government is in I fully expect Kwarteng, likely new chancellor, to take a very, very close look at that. I cant see that situation persisting.

[masurenguy] 26/8/2022 23:33

‘Cheap’ solar fund

Investors haven’t quite caught up with the impressive, unscheduled full-year update Bluefield Solar Income (BSIF) released on Monday, with the renewables fund making a surprise appearance at the top of this week’s ‘cheap’ list. Shares in the £844m alternative income fund rose 4.5% to 138p in the week to Thursday after it reported an investment gain of 10% in the three months to 30 June that pushed its net asset value (NAV) to 140p per share. That puts shares that have advanced 16% this year on a 5.9% dividend yield, which looks attractive on their small 1.6% discount. That does look cheap compared to the average 5.8% premium at which they have stood in the past year and gives them a low Z-score of -3. On average, renewables funds stand on a premium of 3.6%. BSIF did, however, slip to a small discount after its £150m share issue at 130p in June. Stifel analyst Iain Scouller suggested a 5% premium would not be unreasonable which would lift the shares to 147p.

Like other renewable energy funds, BSIF has been boosted by soaring power prices and surging inflation. Nearly two-thirds of its revenues come from government-backed, inflation-linked subsidies. With its 2p quarterly dividend included, it generated a total three-month return of 12%, beating analysts’ expectations. Fund managers James Armstrong and Giovanni Terranova are targeting total dividends of 8.16p for the full year, which they say will be fully covered by operational cashflows. Annual results next month will reveal more on where the growth came from and what discount rate BSIF is using to value its cash flows and assets.

[smidge21] 22/8/2022 17:23

I suspect that politically-inspired event risk is starting to weigh on share prices (after recent notable strength)

[adamb1978] 22/8/2022 16:54

Any views on why this is trading at a discount to NAV?

[williamcooper104] 22/8/2022 16:05

The sound bites are alarming - the possible detail seems a little less so - if it's an offer to stop selling spot for longer term contracts and give up ROCs for again longer term fixed price contracts - then so long as it's a choice (even with a fair bit of political pressure) then may not be so bad. Cutting corporation tax will be NAV accretive and I wouldn't be surprised if the new 15 year contracts took away that benefit Loss of an upside not in the NAV is not so alarming But with this government always a risk they do something ideological because they hate renewables

[spittingbarrel] 22/8/2022 14:56

I did see this over the weekend which concerned me:

[williamcooper104] 22/8/2022 14:19

AY in the US worth checking out too They are actually HQ/top company in the U.K. so you don't suffer any US withholding tax on dividends

[steve73] 22/8/2022 14:09

As I understand it, the electricity market operates by "generating" co.s all offering a selling price & quantity for every 30 minute time period throughout the day, to the central & regional distributors.

"Base-load" generators such as nuclear, wind/solar, (and previously coal) will typically offer the cheapest price (since they have fewer variable operating costs), to ensure their output is maximised.
Peak-load generators (gas, oil, etc) will offer higher prices since they need to cover their increased input costs (fuel). In addition, "interruptible" consumers may be asked to cut back their usage, and are "paid" for not taking power...

Peak-load prices may be 10x or more than the "typical" unit price for just a couple of time-slots. The distributor then has to manage all these input costs, and ensure their retail prices are above their their costs. They will also vary the "standing charge" to disguise higher unit prices.

Obviously as the peak-load prices increase (as higher cost providers are utilised) so the base load generators will increase their bid prices to maximise their profits, although they may typically be locked into longer term contracts, quarterly , annual, or even longer in the case of nukes.

At least this is how it operated a decade or so ago... with the inter-connector from France (nuclear) providing an extra base-load.. I'd expect the French generators are currently supplying much of Europe to cover the gas supply restrictions, with little excess to supply the UK.

[cynicalsteve] 22/8/2022 13:53

I'm surprised by the share price rise today, I'd assumed the expected good news was already in the price, so much for Efficient Market Theory! Are we reaching the point where we need to remember that as profits increase so does political risk? I've been reducing my mainly UK fund holdings and concentrating on AERS that invests in European assets plus ORIT and DORE that have a mix of UK/European assets. I've also bought some USFP, the political risk in the USA is smaller but the returns don't look so good. I want to spread my risk so I'm getting out of concentrated funds like BSIF. But risk works both ways, BSIF could have further to go!

[tartshagger] 22/8/2022 13:39

Let's be absolutely clear about who is responsible for huge increase in energy prices - it is the FOSSIL FUEL CARTEL who have arbitrarily imposed them upon us. The reason why they are doing so is because cheap renewable electricity is an existential threat to their business model. For 25 years the fossil fuel lobby has denied that they are responsible for the climate emergency that we face - in the face of overwhelming scientific evidence to the contrary. Now, when climate change is obvious to all as the world heats up and burns, they are howling that it's the fault of the renewable energy industry, which should now be subjected to the windfall profits tax. The immediate solution is to freeze the price cap NOW, as have France, Germany, Poland, Italy, Austria etc

[williamcooper104] 22/8/2022 13:15

Don't get your point Electric prices are governed by a CFD in which case they are paying excess profits to the government Or else on the market at whatever they can get in the market

[topvest] 22/8/2022 12:03

The markets won't be working like this soon given the market is effectively now broken by war effects. The top two producers are enemy states (Russia and Iran). Then its Qatar. The US are 4th at 5%.

It is ludicrous for a solar farm to be paid the price of a gas power station (as the marginal producer). The prices need to be regulated like the FiT to give them a return on capital. Let's face it 3/4 of their income was regulated anyway with the FiT or about 2/3rd for wind with the ROCs.

Overall, it would be taken quite well by the solar farms and wind farms as it cuts the volatility in prices and would increase investment in renewables. It would be a win win situation for consumers and producers alike in my view. There's no point them getting x10 the price for a year or two and then getting a windfall tax or some other very heavy handed clawback. Better to regulate in my view.

See Ofgem's consultation.


Oil is somewhat different (at the moment) with more of a liquid and working market.

[tournesol] 22/8/2022 11:16

"...It can't be right that solar farms are getting the same electricity price as a CCGT plant run on gas…

That's how markets work. Producers don't set the prices for their products on the basis of cost plus a reasonable margin, they sell for whatever they can get. Competitive forces make sure that excess profits are short lived.

Wouls you say that it's "not right" for Saudi to sell their oil (which is very cheap to produce) for the same price as the stuff from the N Sea (which is expensive to produce)?

Do you really advocate a system of price regulation based on some bureaucratic oversight?

That leads to state ownership and massive inefficiency.

BSIF and its shareholders deserve to make high returns in exchange for taking the risk of backing relatively new technology in volatile markets and for contributing to the transition away from fossil fuels.

[topvest] 22/8/2022 10:30

The market will have to be fundamentally changed by 1 Jan 2023 in my view. Gas price has hit 550p per therm this morning which is x7 the highest gas price EVER achieved. It's equivalent to having an oil price of 7*US$140 = US$980 a barrel. The market is broken so there is now very high political risk. So, the electricity and gas price (if extrapolated) is now equivalant to filling a large car with petrol or diesel for about £1k per fill.
How crazy is the world?

[masurenguy] 22/8/2022 10:01

Don't hold your breath waiting for that !

[williamcooper104] 22/8/2022 09:27

Do you have a source for that

[tartshagger] 22/8/2022 09:24

Nice uplift in the share price :)Kwarteng - who has repeatedly refused to put a windfall profits tax on the oil and gas cartel, who have imposed the eye-watering huge price rises - has notably failed to secure the nations energy supply for the coming winter. In desperation, he is now demanding that the same windfall profits tax be put on the renewable electricity producers, citing "excessive profits, subsidised CfD contracts and increased dividends"Clearly, the Register of Members Interests should be examined to establish Kwarteng's shareholdings in BP, Shell, Exxon, Gazprom etc

[masurenguy] 22/8/2022 07:16

Great update !

UNAUDITED NET ASSET VALUE AS OF 30 JUNE 2022

Bluefield Solar announces the Company's estimated unaudited Net Asset Value as of 30 June 2022 to be 140p per share. This represents an uplift of approximately 10% as compared with the previous unaudited Net Asset Value as of 31 March 2022, which was 127.04p per share. The audited Net Asset Value will be released by the Company within the annual results.

The valuation uplift is predominately due to an increase in power price forecasts and higher inflation expectations in the calendar year. These increases have been partially offset by a rise to the discount rates applied in the valuation, reflecting an increased proportion of non-solar assets in the portfolio and a rise in UK gilt rates. Bluefield Solar will announce its Full Year Results for the Year ended 30 June 2022 on Friday, 30 September 2022.

[rik shaw] 17/8/2022 12:45

Dividend payment date has been amended to 31/8.

[tournesol] 15/8/2022 19:52

...That's a political rant…

I'm surprised you haven't just used the filter button. Someone who resorts to such an offensive user name seems really unlikely to have any insightful analysis to offer.

[18bt] 15/8/2022 18:16

That's a political rant, but what effect will that have on the BSIF share price??

[tartshagger] 15/8/2022 16:45

Kwarteng, who is also a climate change denier and a fossil fuel lobby supporter, has recently announced a total of £17billion in subsidies to the oil majors to develop new, previously uneconomic oilfields in the North Sea and off the Shetlands which will take 25 years to come onstream and make us even more dependent on fossil fuel, while the planet cooks. Kwarteng has refused to apply a windfall profits tax on the oil and gas majors and has stated several times that he is opposed to "handouts" to the vulnerable to help pay their energy bills this coming winter. After all, if the pensioners all freeze to death the government will save millions on not having to pay their pensions.

[tartshagger] 15/8/2022 16:34

Truss has announced (twice) that she will ban new onshore solar installations on agricultural land. Truss is a climate change denier and recently forced Kwarteng to donate the BEIS "underspend" of £250m to the MoD to pay for more armaments to Ukraine. The money was going to pay for 100,000 EV charging points, housing insulation grants, another 7GW of offshore wind and a grid sized energy storage system developed by Manchester University