The Renewables Infrastru... Share Discussion Threads

[pinemartin9] 12/2/2024 22:00

Is this getting too cheap? Solid 7.5% dividend. Trading well below NAV. I'm thinking of a buy, but worried by the closeness of results.

[speedsgh] 07/2/2024 11:58

Selloff tempts Rathbones into core infrastructure funds for the first time -

#TRIG #HICL #INPP #GCP

[andyadvfn1] 06/2/2024 12:25

Announcement date is a couple of weeks later than previous schedules however the payment date is the same

[neilyb675] 05/2/2024 12:14

104.20 - 105.00 (GBX) at 11:45:58
on Market (LSE)

[keyno] 05/2/2024 11:46

I have 15 Feb marked as div announcement. Ex-div 22 Feb.

See hxxps://www.trig-ltd.com/investors/calendar/

[tuftymatt] 05/2/2024 11:45

I was expecting one, unless I have missed something, and looking at the past couple of years it's announced around now. Hopefully something gets said in the next few days.

Good luck all 👍🏻

[4spiel] 05/2/2024 11:18

Is there a quarterly dividend?

[igoe104] 23/11/2023 09:46

Good news for renewables in the budget.

New projects will be exempt from Electricity generator Levy from today..

[pinemartin9] 14/11/2023 13:24

Cyclical impacts here. They need the wind to blow to generate revenues obviously, also impacted by wholesale prices. There will come a point when the assets they own are getting older and need to be repowered or replaced. That said, if you can squeeze out a few more years beyond the design life then that is all profit versus the original projections when the wind farm was commissioned. That can lead to a significant revaluation.
I've been toying with an entry here for a while. I've never pressed - wish I had sub 100p. Watching though.

[pavey ark] 10/11/2023 09:34

Bought here recently and doubled up today.

I hold s few renewables ...all high yield and secure looking debt.

Just one point that seems to have been overlooked...If wind projects are being halted because of rising costs does that not make existing projects more valuable ?

Anyway 7% yield, over 20% discount and decreasing project debt makes this look attractive to me.

[jong] 09/11/2023 09:44

XD today. 1.795p per share payable on Friday 29 December.

[davebowler] 29/10/2023 16:21

htTPs://www.msn.com/en-GB/finance//id-buy--shares-of-this--renewable-energy-stock-for-k-a-year-in-passive-income/ar-AA1j21a5?ocid=sapphireappshare

[makinbuks] 18/10/2023 10:07

Not familiar with the full list of offshore wind farms but I believe most are very close to the coast and very unlikely to see Russian activity. If they were so minded they would more likely go for a DC interconnector. Any insurance would be at the asset level. Cables do fail from time to time anyway so repairs are not uncommon

[aqc888] 18/10/2023 08:29

I have some trig and would like to buy more… however I’m a bit worried about the Russian hobby of cutting deep sea cables at the moment. I imagine power cables from sea wind farms might be an early target should relations get worse. Do they have insurance for this?

[yump] 17/10/2023 09:37

Its not just interest rates per se. Debt costs and construction costs are an issue, but those may well have hit the sector indiscriminately.

Interest rate drops will help the income attraction improve. Rates and inflation above the persistent lows of the last decade will presumably still affect debt costs and construction.

[alan pt] 16/10/2023 18:48

A downward path in sight for interest rates should do it

[seanyboy] 16/10/2023 13:32

What do you think is required for renewables to come back in vogue? Is it just the economic climate or is there more to it? TIA

[alan pt] 06/10/2023 16:00

Well, my limit just triggered, so I'm in for just under £1, surely got to be decent value at this price???

[pinemartin9] 02/10/2023 17:55

This is starting to get interesting again. Had it on my watchlist for quite a while now. These prices seem very good. When renewbles come back in vogue this could do well. Meanwhile underpinned by about 6% recovery at these prices.

[andyadvfn1] 15/9/2023 08:08

SeanyboyI think interest rates need to come down significantly before we see the 150s, I believe it's the main driver.

[keyno] 14/9/2023 16:46

How about when our porcine friends take to the wing? :(

[gbcol] 14/9/2023 14:56

Well once interest rates have peaked that will help (and I don’t think that is far off, may have already happened) but may need to start falling before the discount to NAV is significantly reduced. I’m very exposed to the sector, so it’s very disappointing to see the drop from premiums to NAV we had to the large discounts we currently have. However all my divis have been reinvested and I’ve topped up whenever I can because the income is still decent and capital growth should come in the medium term if not sooner.

[seanyboy] 14/9/2023 14:00

Have had trig on my radar now for 3 years & still to pull the trigger - no pun intended! I like the sector of course but it seems to be doing squiddly well actually worse than that as this is the lowest I have seen it for a while! Can anyone see in what scenario the share price can get above 150p which well beyond current price any views appreciated

[gateside] 31/8/2023 08:23

Hopefully this has seen its lows, and will start heading back to +120p

[davebowler] 11/8/2023 16:10

As we have noted on several occasions over the past few months, despite poor share price returns, the underlying fundamentals of the renewable energy sector remain strong, particularly for those companies benefitting from inflation-linked subsidies and exposure to wholesale power prices. In many cases, these tailwinds have more than offset the adverse impact of rising discount rates on NAVs. While these weigh on returns in the short term, it is difficult to see how such wide share price discounts can be maintained for long, even with the increased politicking that we have seen of late, which Cherry Reynard has commented on here.

Within the sector, some companies have fared better than others and it does not seem like a coincidence that the three trusts trading on the tightest discounts also happen to be the largest by market cap, with Greencoat UK Wind (UKW), Greencoat Renewables (GRP), and the Renewables Infrastructure Group (TRIG) all multitudes larger than the peer group median. This is likely an indication that the main sellers of renewables funds have been the larger wealth managers, who are increasingly obsessed with liquidity. While scale in isolation is certainly not a reliable indicator of success, all three trusts have continued to show continued fundamental stability despite the volatile macro environment.

This week, following the publication of its interim results, I got a chance to sit down with some of the key members of TRIG’s management team. Despite trading on one of the narrowest discounts in the sector, TRIG stands out as a particularly attractive proposition at current prices thanks to the clear, long-term potential of the fund’s assets and the willingness of its managers to embrace the opportunities present in the sector.

The company owns the largest diversified portfolio of renewable energy investments within the UK investment company sector, spread across eight countries and four asset classes. This is in contrast with the majority of the other funds that are either single mandate or specialists in individual assets, exposing them to considerable and often unhedgable risks, which are exacerbated further by the intermittent nature of renewable energy generation. We have seen this play out over the last few years, particularly with regard to generation from wind, with prolonged periods of below average wind speeds causing energy output drop by over 30% for some producers. TRIG certainly was not immune to these challenges, however the overall impact on its portfolio as a whole was limited thanks to its geographic, technological, and revenue diversification.

The diversity within TRIG appears to be an extension of the proactive nature of the management team and its ability to identify opportunities within this fast-moving sector. As technology accelerates and the cost of various infrastructure investments continues to fall, managers who remain stationary, or those unwilling, or unable to take certain risks, get left behind. That is true in any industry but is particularly relevant here given the speed at which renewable production is changing, and the variety of technologies available.

In 2021, the managers requested an increase to the fund’s mandate to invest in development projects – from 15% of the fund to 25% – identifying a potential value add to shareholders. While these projects come with elevated risks, these are mitigated to an extent by the stability of the company’s existing portfolio, particularly its six offshore wind projects, which benefit from protected cash flows, reducing the sensitivity of its equity returns to changes in power price levels. Over the first half of 2023, these investments delivered operational cash flows of £264m, representing three times cover of the £87m cash dividend paid to shareholders (at a yield of over 6%). Outside of paying down portfolio level debt, the bulk of these cashflows were reinvested into construction projects, including the commissioning of four solar projects in Spain, an onshore wind farm in Sweden and the development of two near term battery storage projects in the UK, further highlighting the desire of TRIG’s managers to generate shareholder value through effective diversification.

The company is also able to leverage its scale, and balance sheet to deliver projects that would be beyond the scope of many other funds in the sector, particularly relating to increasing merchant risk. Subsidy-free projects are becoming more common place as the market matures, particularly for solar installations, and TRIG’s ability to be a relative first mover provides considerable advantages, both in terms of the ability to select prime developments, and to negotiate agreeable rates of return that reflect the increased risk (which can be as much as two to four times greater than construction risk). Again, thanks to the structure of the portfolio, the managers can branch out into higher return investments with the knowledge that over 50% of forecast revenues are linked through subsidy support mechanisms providing a natural hedge to increasing return expectations.

The expertise in developing these projects should also not be discounted given the increasing complexity that exists when taking on merchant risk, and the potential opportunities that will arise as long-term project subsides roll off in the coming years will likely be substantial.

One of the key challenges of investing in renewable energy over the years has been to manage the disconnect between the clear, long term, opportunity that exists, and the bottom-up reality of the assets in the sector. We all know that renewables will need to make up the bulk of the world’s energy supply over the next century, and that regulatory tailwinds to drive investment are immense. However, identifying tomorrow’s winners has proved to be no easy task. Investors must navigate a revolving door of technologies, confusing business models, and a patchwork regulatory environment. This remains the case today, even as the industry has begun to mature. The value of funds like TRIG is that they are capable of navigating these complexities, thanks to a wealth of technological expertise, while also having structures in place to manage the downside risks that are unfortunately commonplace given the variable nature of production (such as wind generation mentioned above).

Renewable energy investment is a long game, and as with any investment, preserving capital is key to generating long term, compounding returns. TRIG appears as well equipped as any to achieve this thanks to the level of diversity within its portfolio, and the continued execution by its managers.