NextEnergy Solar (NESF) announced an operational update and its unaudited NAV, as at 31 December 2020. NAV increased to 100.7p per ordinary share, compared to 99.6p, as at 30 September 2020.
Operational highlights from the period include:
- “763 MWp total capacity installed to date (30 September 2020: 755 MWp), across 91 operating
solar assets with 8.5 MWp added to the subsidy-free portfolio - Strong operational resilience through COVID-19 pandemic with year-to-date portfolio
outperformance - Electricity generation was 8.1% above budget YTD, generating c.£5.1m in
additional revenue - Irradiation levels exceeded expectations by 7.3% YTD
- Asset management alpha of 0.8% YTD, attributable to the added value of active management
and operation of the portfolio by the investment manager and asset manager”
Discount rate drives NAV change
“The increase in NAV was primarily driven by a 0.25% reduction in the unlevered discount rate to 6.0% for UK operating assets. The Board considered it appropriate to reduce the discount rate as a result of the observed increased market valuations of operating solar plants in the UK as well as the impact of the reduction in UK interest rates. Changes in the Company’s power price forecasts had a minimal effect on the NAV this quarter due to the power price hedges implemented and the short-term rise in power prices being offset by both lower medium to long-term price forecasts as provided by the Company’s independent consultants. Inflation expectations have remained in-line with NESF forecasts.”
Subsidy-free asset portfolio
“NESF remains on track to reach its subsidy-free target of 150 MWp through its project pipeline during the 2021/22 financial year. With three operational subsidy-free solar projects among its portfolio, NESF continues to lead the UK solar industry’s transition from a subsidy-based regime to one that provides clean electricity at market competitive terms without the need for support from consumers or regulators.”
NESF: Operational update from NextEnergy Solar