JLEN NAV impacted by power price fall – JLEN’s NAV has dropped from 104.7p to 101.8p over the final three months of 2019. The reason is a fall in assumptions about long-term power prices – a topic we covered in another story this morning – “electricity price forecasts have reduced by c. 7.5% from the half-year report on a fairly uniform basis across the forecast curve, reflecting the consultants’ views on continuing deployment of off-shore wind and strong supply of natural gas. This has reduced the portfolio valuation by £21.6m (4.3p per share)“.
GCP Infrastructure had already cut its NAV on the power price drop and we expect other renewable energy funds to do the same over coming weeks. As JLEN points out, it is actually one of the least affected by this as it has a much higher proportion of its income coming from subsidies and concession-based payments than competing funds.
JLEN also reports lower than budgeted output from its wind and solar projects – it wasn’t windy enough in October and November. JLEN has improved the availability of its wind projects – addressing the issues that Senvion’s bankruptcy created. A lightning strike disrupted production at a solar farm but this kind of outage is insured. One other plant was offline for a while for maintenance.
In marked contrast to the problems that SQN Asset Finance Income and GCP Infrastructure have been reporting with their anaerobic digestion plants, JLEN’s continue to outperform budget.
[The final quarter of 2019 wasn’t a great one for JLEN but most of the adverse things are outside its control (notably the weather). It is good to see the anaerobic digestion side doing well, given the expansion in that area, and the advisers continue to find new ways to diversify the fund’s revenue streams as evidenced by the food waste AD plant purchase and yesterday’s commitment to a fund financing new assets under construction.]