Image: Bluefield Solar Income Fund.

Bluefield Solar Income Fund has seen a slight drop in its NAV, but is lauding its generation portfolio as performing “extremely well”.

Bluefield’s unaudited NAV stood at £418.7 million as at 31 March 2020, or 113.2 pence per ordinary share, compared to its audited NAV of £447.4 million or 120.75 pence per ordinary share as at 31 December 2019.

The fund said this reflects its adoption of the most recent central power curves published by its two independent power forecasters, which Bluefield blends on a 50/50 basis. The curves used by the company have reduced by an average of 15% over the next five years, including a 25% reduction over 2020 and 2021. Bluefield’s estimated revenue for these periods is therefore less than previously forecast, resulting in a reduction in NAV of 6.7 pence per ordinary share.

The drop in power curves then corresponds to an average capture price of c.£41 per MWh for 2020-2024, Bluefield said, and £48 per MWh for 2020-2050 based on 2019 prices.

The company has previously lauded its power purchase agreement (PPA) strategy, which has allowed it to secure an average price of £56/MWh across its portfolio. However, there are concerns across the energy industry over power prices, with Aurora Energy Research predicting that they may not fully recover from the effects of COVID-19 until between 2022 and 2025.

Bluefield has 100% of its revenues contracted until 30 June 2020, 88% until 31 December 2020 and 77% until 30 June 2021. Its portfolio continues to “perform extremely well”, it said, with generation 4.8% above target as of 31 March 2020.

The company most recently acquired 13.5MWp of UK solar, with the £13.9 million transaction completing in January 2020. It's update echoes those of other investors in UK solar; in an update released yesterday (4 May 2020) Foresight Solar Fund announced its NAV had also fallen but that its portfolio was generating 9% above budget due to high levels of irradiation.

Likewise, the Renewables Investment Group (TRIG) predicted its NAV could fall by 5 pence per share due to reductions in power prices but stated its portfolio – a mix of renewables – had performed 22% above budget in Q1 2020.