Nextenergy Solar Share Discussion Threads

[fordtin] 21/11/2022 21:21

EC2 re "This would not work in this situation ..."

GSF stated;

"Whilst ancillary services are currently the predominant revenue
stream in the portfolio, the Company also derives revenues from
Capacity Market (“CM”) contracts, Triads, and participation in
energy arbitrage (“Trading”)".

Https://www.gsenergystoragefund.com/docs/librariesprovider22/archive/reports/annual-report-2022.pdf


GRID stated;

"Due to the Asset Optimisation strategy, the investments are able
to benefit from a range of revenue streams, either arbitrage on
power price volatility or FFR and other similar income streams"

Https://greshamhouse.com/wp-content/uploads/2021/09/GRID-Interim-Report-30-June-2021-final.pdf




I see no reason why NESF and their peers can't use their recent investments in energy storage projects to participate in a bit of arbitrage.

[ec2] 21/11/2022 20:44

It's standard risk control practice for all of the renewable generators to hedge their production. In the case of NESF they updated today in the RNS that 93pct of their 22/23 non government subsidised production is hedged around the GBP86/MWh level. The counterparties to the hedges e.g. investment banks / energy traders take on the risk until they sell on e.g. into the spot market.To the question below regarding battery storage. This would not work in this situation 1) because batteries only store generally up to a max of two hours and 2) because to retain ownership of the electricity would not be a hedge. Final point, no one is exploiting the market and pushing up electricity prices, it's simple supply and demand economics. Hope this clarifies.For what it's worth since it's already been commented on by others, a very positive and comforting trading update today. Takes a lot of the uncertainties away that had been depressing the share price. Let's hope gilt yields continue to behave themselves going forward and all will be fine.

[fordtin] 21/11/2022 17:25

marktime1231 - re #503
"Who is buying or has bought (some) NESF output at £85 and is selling it at £200+?"

isn't that the incentive for NESF and their peers to expand into energy storage projects?

[marktime1231] 21/11/2022 15:56

That is interesting EC2. Are you saying generators are the wrong target for a windfall tax, and that it is energy traders making surplus profit? Who?

Who is buying or has bought (some) NESF output at £85 and is selling it at £200+? The hedge funds? NESF obviously selling itself higher too, average price £110-120/MWh I think in H1.

So who is exploiting the market and forcing our energy costs up?

[ec2] 21/11/2022 13:23

Interesting comments today from NESF highlighting where energy windfall profits are being made. NESF have entered certain hedges at around GBP85/MWh but the market is in turn now selling energy on at in excess of GBP200/MWh. Seems some further levelling up is required as to where the windfall levies are applied.

[marktime1231] 21/11/2022 11:05

A boost from the uprated NAV welcome.

Solar performance around 10% ahead of budget, it was a sunny Summer. Income not translated in to cash flow, a wait until year end to convert receivables in to cash perhaps? Quite difficult document to read. 42% gearing. No increase in capacity since March, not sure when the next addition will be. Coupling solar with battery storage cannot come soon enough. And asset optimisation, obviously.

Nothing to say whether NESF would be happy to migrate old sudsidy and unsubsidised assets on to fixed price contracts at £NN/MWh, but the long term price budget is under £46 in 2022 prices so take a deal at £75?

Fluffed the opportunity to calculate what the windfall tax might mean, by my quick sums there could be a £5-10M hit next Summer. Eg NESF would have made about £48M in Summer 2022 at £75/MWh but reported revenues were £77M. Mostly but not all UK? Adjust for solar 10% above budget. 45% on the difference less a £10M allowance. That is quite a hit. Is there a quid-pro-quo eg tax relief on development expenses?

[panshanger1] 21/11/2022 09:44

Picked up a bit now !!Market seems happy

[tuftymatt] 21/11/2022 08:08

All seems very positive to me and the small climb at the opening would support that view I guess 👍🏻

[masurenguy] 21/11/2022 07:14

Interim Results for period ended 30 September 2022

NextEnergy Solar Fund is pleased to announce its interim results at 30 September 2022.

Financial Highlights

-- +9.4p (c.8.3%) increase in Net Asset Value ("NAV") per ordinary share to 122.9p over the six-month period (31 March 2022: 113.5p).

-- +£56.2m increase in ordinary shareholders' NAV to £724.7m (31 March 2022: £668.5m).

-- Earnings per ordinary share of 13.1p (30 September 2021: 7.74p).

-- Total Gearing (including preference shares) of 42% (31 March 2022: 42%).

-- Second interim dividend of 1.88p per ordinary share for the quarter ended 30 September 2022 (30 September 2021: 1.79p).

-- Estimated cash dividend cover of 1.3x - 1.5x for FY22/23 (31 March 2022: 1.2x).

-- Total dividends paid of 3.76p per ordinary share in respect of the six months ended 30 September 2022 (30 September 2021: 3.58p).

-- Target dividend of 7.52p per ordinary share for the year ended 31 March 2023 (a year-on-year increase of 5%, above the 4.1% calculated Retail Price Index ("RPI") rise for the 2021 calendar year).

[gateside] 18/11/2022 18:43

Yes... Interim Results due on the 21st

[marktime1231] 18/11/2022 17:56

Ahem. Prospective investment in battery storage, surely?

Interim report due on Monday I think, fingers crossed.

[carterit] 18/11/2022 17:41

From citywire today at 17.20
The exclusion of battery storage is clearly good for funds in this sub-sector: Gresham House (GRID), Gore Street (GSH) and Harmony Energy Income (HEIT).

Winterflood also pointed out that if biogas was confirmed as exempt, it would benefit JLEN Environmental Assets (JLEN), a diversified fund that generates some of its revenue from the sale of heat and biogas and enjoys some subsidy in the form of the feed-in-tariff scheme.

With its portfolio focused on Ireland and Europe, Greencoat Renewables (GRP) is also in the clear.

Chande said other funds with less than 30% UK exposure and at low risk from the levy were Thomas Lloyd (TLEI), Ecofin US Renewables (RNEW), Aquila European Renewables (AERI) and SDCL Energy Efficiency Income (SEIT).

VH Global Sustainable Energy Opportunities (GSEO) should also be excluded as its only UK asset is a gas-powered plant with carbon-capture facilities, said Chande.

‘While we do await finer details of the levy, the initial technical note indicated that behind-the-meter solar rooftop projects supplied by Atrato Onsite Energy (ROOF) will be exempt whilst Downing Renewables (DORE) is exempt due to UK capacity being under a 100GWh/pa de minimis allowance,’ the analyst said.

Funds such as Greencoat UK Wind (UKW) and Bluefield Solar Income (BSIF) with the highest exposure to subsidised CfD and ROC revenues should see a smaller reduction in NAVs, said Winterflood’s Ratnasingam.

UK Wind rose 3% yesterday, one of the biggest risers in the sector, and rallied another 3.7% today. Foresight Solar (FSFL) and NextEnergy Solar (NESF) gained over 2% yesterday.

The latter’s rise may have surprised Ratnasingam as he believed FSFL could be the most vulnerable to a knock to NAV as it had recently set its power price assumption at the higher end of the sector range of £80-£175/MWh for 2023 and £65-£150/MWh in 2024.

By contrast, he said NESF was ‘relatively attractive’ because of its investments in battery storage through a 500MW joint venture with Eelpower. Investor’s Newell estimated it was in line for a reduction in NAV of just 0.3%.

However, further clarification is needed as Chande included NESF, BSIF and UKW in a list of five that also included Renewables Infrastructure Group (TRIG) and JLEN he believed could see reductions of around 2.5% in NAV.

‘Arguably this is already reflected in discounts,’ he said. Until the smoke clears, however, those gaps between share prices and NAVs look set to remain.

[cruelladeville] 17/11/2022 18:46

No windfall tax here?

[starpukka] 17/11/2022 16:03

No mate, NESF went ex-div today. You needed to own by end of trading yesterday to get the divi.

[tuftymatt] 17/11/2022 15:03

EX divi tomorrow so those recently buying stand to do very well if the drop in the am is just 2p 👍🏻

[starpukka] 17/11/2022 13:09

Opened long spreadbet around 4.29pm last night for the divi. As occurred on last ex-div date, share price has bounced back above my buy price.
But on this occasion, might be more to do with the news of the day. Either way, I'm not complaining.

[nerja] 17/11/2022 12:52

He did say OLD renewables will be taxed, whatever that means

[masurenguy] 17/11/2022 12:50

No reference was made to renewable energy when the windfall tax on oil & gas was announced so one would assume that it is exempt.

[edward3] 17/11/2022 12:50

well the market has liked it ..

[cruelladeville] 17/11/2022 12:46

Good question. More news to come on this I guess.

[rogerramjett] 17/11/2022 12:13

So a 45% windfall tax applied to energy generators. How does that affect NESF ?

Does this or should this even affect green/renewable energy generators. Seems to go against the very purpose.

[cruelladeville] 10/11/2022 16:13

Thanks. From what I understand so far, it's a straightforward highwayman robbery raid on power generation with no enhanced allowances as per North Sea O&G producers. We're going to know very soon.

[bodgeman] 10/11/2022 13:21

They are reporting still (yesterday bloomberg) that it's on the cards. I think it would be an ok thing if profits are exempt if reinvested in infrastructure. Dont know what that would do to the dividend - nothing good I expect, but it would raise the NAV and maybe share price. Depends what you are looking for - div or share price Personally I think Gov should leave well alone and provide an environment for growth - the opposite to what people are saying will happen. We will see on 17th (or before)

[cruelladeville] 09/11/2022 17:24

Any concerns here for a windfall tax grab?