Next Energy Solar Fund (NESF.L. FTSE Small Cap Index. Market capitalisation: £432m, 73p, 3.5 per cent of JIC Portfolio (3.5 per cent target) and 0 per cent of JIC Funds Portfolio (0 per cent target) Medium Risk/High Reward
Net capacity moves above 1GW with the commissioning of the Camilla battery storage asset.
Conclusion: £35.79 per/KW looks attractive and should add £202,000 in revenue in the 12 months from 1 October. In the meantime, NESF’s share price languishes and is now on an 11,4% dividend yield. The fourth quarterly payment of 2.09p will go ex in May and be paid in June. We should hear what it intends to pay for the year to March 2025 with its results in June. I would expect at least an inflation-linked increase, although forecasts are for a more generous increase of 9.0%. That leaves the shares on a yield of 12.4% to March 2025. You can get near 5.0% risk-free nowadays, but having such a premium for NESF, which has sold forward much of its electricity production at high prices and has an element of inflation protection built in, seems erroneous. I dearly want to remove NESF from the JIC Portfolio and re-invest in more exciting growth opportunities, but I can’t bring myself to sell at this valuation. I probably should be adding, but maybe 3.5% is enough. Unhappy Holder!
1GW Milestone and 50MW Energy Storage Asset Online
NextEnergy Solar Fund, a leading specialist investor in solar energy and energy storage, is pleased to announce that the Company's maiden standalone 50MW energy storage asset, named Camilla, has successfully begun commercial operations. This is a significant milestone for the Company as it increases NESF's total installed net capacity above 1GW to 1,014MW.
Camilla connected to the National Grid in December 2023 and progressed successfully through its final phases of commissioning early this year. Camilla is a 50MW 1 hour lithium-ion battery located in Fife, Scotland, which has been pre-configured for augmentation to 2 hours. Camilla is the first asset to be delivered through the Company's £300m Joint Venture Partnership programme with Eelpower Limited.
The Company is encouraged by the recent progress made by the National Grid as it continues to make improvements in the dispatching capability of batteries in the Balancing Mechanism and the introduction of additional reserve products. This is positive for new operating assets entering the market at this point, such as Camilla, as it represents additional revenue opportunities.
On 20 February 2024 National Grid ESO published the provisional results of its T-1 Capacity Market Auction for delivery in 2024/25. Camilla successfully bid and secured a contract with a clearing price of £35.79/kW. The contract was secured with a derated capacity of 5.659MW and is expected to generate £202k (£4k/MW on a total capacity basis) of additional contracted revenue for the period 1 October 2024 through to the end of September 2025.
The Company's disciplined approach to capital allocation focuses on accretive investment activity, consistent with the Company's investment objective of providing ordinary shareholders with attractive risk-adjusted returns, principally in the form of regular dividends.
Helen Mahy, Chair of NextEnergy Solar Fund Limited, commented:
"I am pleased that NESF has achieved commercial operations of its first standalone energy storage asset, Camilla a 50MW battery in Fife Scotland. Camilla is conveniently located adjacent to the Glenniston substation and is already connected to the National Grid, supporting constraints on Grid interconnector capacity to areas of high demand. Energy storage assets will play a crucial role in the UK's transition to net zero and we are proud to play a central role in achieving this."
Michael Bonte-Friedheim, Founding Partner and CEO, NextEnergy Group, commented:
"I'm delighted to confirm that Camilla's energisation increases NESF's total installed net capacity to over 1GW, alongside the recent energisation of NESF's first two international solar co-investments. Expanding into energy storage complements NESF's existing large portfolio of solar assets on a standalone and co-located basis and provides multiple diversification benefits for shareholders."
Mark Simon, CEO of Eelpower, commented:
"Eelpower is very pleased that the 50MW project at Camilla Farm has entered commercial operations and are proud to have delivered it with our partners NESF. We look forward to Camilla joining the market-leading assets we have commissioned over the last seven years, delivering on the promise that flexible battery assets represent for Scotland and supporting the transition to net zero in Great Britain."
Comentários