Octopus Renewables Investment Trust calls for clearer direction in government energy strategy
Octopus Renewables Infrastructure Trust (ORIT) has urged the government to outline its energy goals in clearer terms ahead of its upcoming energy security strategy.
David Bird, investment director at ORIT told City A.M. it was not merely an issue of funding, as the logistics around ramping up renewables in line with the government’s net zero pledges had to be established.
He said: “It’s not about the availability of capital as much as it is around things like planning, availability of grid, and the timelines for getting connected to the network. Those are things we certainly hope can be addressed rapidly because renewables can then come forward quickly.”
Commenting on the government’s desire to enhance its energy independence, he added: “Whatever your views on other technologies, things like nuclear, they are not going to be deployed quickly. If we want quick wins in getting off Russian gas and oil then doing as much as possible to move renewables forward ever faster makes perfect sense for us.”
The investment director also called for planning laws to be relaxed so that it no longer requires local development plans designating areas for onshore wind.
He said the current situation “may as well be a moratorium” on onshore wind facilities, which went beyond just giving local communities a veto.
Chris Gaydon, investment director at ORIT, recognised a balance needed to be struck.
He described onshore wind as “comfortably the cheapest form of generating electricity” that could be key to energy independence and weaning the UK of Russian fossil fuels, however communities needed to still have input into schemes.
The investment director said: “That’s not to say development can just run run amok. I think we still have to be very cautious and sympathetic to the needs and views of local communities.”
He cited the Octopus Fan Club tariff as a solution which gives households situated near wind farms discounts when it is windy, which enabled them to “feel the benefits of having wind turbines in their local area.”
Prime Minister Boris Johnson is set to call for bolstering renewables, nuclear and North Sea oil and gas in the coming days, as he looks to outline the government’s supply security strategy.
Trust navigates pandemic with flurry of acquisitions
Octopus Renewables Infrastructure Trust (ORIT) has reported a 9.3 per cent growth in net asset value (NAV) and fully covered dividends in its full-year results.
The trust, which is listed on the FTSE All-Share, has navigated challenging headwinds such as the pandemic and the energy crisis, boosting the gross value of its portfolio 68 per cent through a flurry of acquisitions in 2021.
The overall value of ORIT’s assets has risen from £441m to £738m, after it wrapped up six separate deals over the 12-month window, totalling 179MW of capacity.
This included wind, solar and construction and operational assets, alongside two developer investments across three new countries.
Revenues have also risen, climbing to £38.5m for the full-year, up from £30.8m in 2020.
However, total shareholder return has dropped to 1.6 per cent from 7.8 per cent last year.
At the end of last year, the portfolio consisted of 31 assets across seven countries alongside two technologies and two developer investments.
Once fully invested, the ORIT’s portfolio has the potential to power the equivalent of 337,000 homes with clean energy, providing a reduction of 364,000 tonnes of carbon emissions.
In 2021, ORIT’s operational portfolio generated 348 GWh.
This was a 25 per cent boost compared to the previous year.
Looking ahead, half of ORIT’s forecast operational revenue in 2022 and 2023 is fixed, down from 91 per cent this year.
The reduction has been driven by sharp increases in global commodity prices and its recent acquisitions.
It has also lifted its dividend target to 5.24p for the upcoming year, representing a 4.8 per cent increase on 2021.
Phil Austin, chairman of ORIT, said: “During 2021 our Investment Manager added new renewable energy assets to the portfolio, increasing its diversification. Our investment manager’s performance continues to be excellent, delivering and developing pipeline opportunities for the Company and actively managing our portfolio across all stages of development.”
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