NextEnergy Solar Fund (NESF) plans to commence construction “shortly” on an 8.5MWp subsidy-free extension, reiterating the minimal effect COVID-19 has had on its operations.
In an operating update released yesterday (8 April), the investor confirmed that for the year ended 31 March 2020, its UK portfolio performed above expectations with a generation outperformance of 4.6%. This is, however, a drop compared to the year ended 31 March 2019, which saw a generation outperformance of 9.4%.
This was true across the whole of its portfolio, with solar irradiation 4% above budget in comparison to 9% for 2019 and generation 4.7% above budget compared to 9.1% for 2019.
Of the revenues derived from the sale of power - expected to be around 39% of its revenue - the company has secured fixed price agreements covering 95% of its electricity generation for the summer of 2020 and 50% of its generation for the 2020/21 winter.
Subsidy-free build out and the impact of COVID-19
The company’s build-out of subsidy-free solar assets has long been underway, having completed the 50MWp Staughton last year as well as its maiden subsidy-free asset Hall Farm II. In its update, NESF confirmed that initial site entry works have been completed on its subsidy-free High Garrett site, an 8.5MWp extension to an existing 5MWp ROC farm NESF acquired in 2016.
Major construction works on the site are set to commence shortly, it said, although this is subject to COVID-19 impacts, with energisation expected to take place towards the end of Q3 2020.
NESF has, however, reiterated that it is not experiencing any significant impacts due to COVID-19 at present. It is not expecting any significant complications along its spare parts chain having built up a stock of spare parts during H2 2019.
Its key service providers have continued to provide contracted services and the company hasn’t experienced any significant technical, operation or financial impacts resulting from COVID-19.
However, it announced last month its shares had fallen by approximately 20% as of the close of business on 19 March 2020, and it committed to cancelling its scrip dividends. In today's update, it said it plans on offering the scrip dividend again for the next dividend payable in June 2020.
It also confirmed its target of a full-year dividend of 6.87p per Ordinary Share for the financial year ended 31 March 2020.