NextEnergy Solar Fund (NESF) is expecting to have amassed an operational subsidy-free solar pipeline as large as 150MW by the end of next year.
The solar investor announced last week that it had energised its maiden subsidy-free solar farm – the 5.4MW Hall Farm II – in August, with work having already started on a second, the 50MW Staughton project that lies on the Cambridgeshire/Bedfordshire border.
However, NESF expects these to be the first of many projects brought forward in the coming months. Within its interim results disclosure last week, the fund commented that its range of operational assets completed without the aid of subsidies could reach 150MW by the end of next year, equivalent to around 15% of its total portfolio.
It adds that developing 100MW–150MW of subsidy-free PV would come at an investment cost of somewhere between £55-£88 million.
In establishing subsidy-free sites, NESF is turning its attentions away from the market for subsidised built assets that it said continues to be competitive, with assets trading at prices above what the investor is willing to pay.
Alongside subsidy-free development NESF is now increasingly turning its attentions to optimising the 705MW it already owns. That includes extending their respective operational lifetimes beyond the previously-forecast 25 years, reducing its operating expenditure base, making technical improvements to particular sites and optimising its electricity sales strategy.
It said that power generation had been 5% above expectations during the six-month period ending 30 September 2019, a period which coincided with a record-breaking spell for temperatures during the UK.
This spell posed not just technical issues as temperatures in the UK rose far above the optimum 25 degrees Celsius, but also from a management perspective as high irradiance led to extended periods of curtailment experienced at certain sites.
Nevertheless, NESF chairman Kevin Lyon lauded the “robust” results as having been “characterised by another period of outperformance”.
That outperformance lifted profit before tax for the period to £21.1 million, up 13% from the £18.7 million recorded in the corresponding period last year.