The Renewables Infrastructure Group (TRIG) has exchanged contracts to acquire a further 11% equity interest in the Merkur offshore wind farm, located in the German North Sea. This incremental investment is approximately 2% of TRIG’s portfolio value. Upon completion TRIG will hold a 36% equity interest in Merkur, the total stake in the project will represent approximately 6% of TRIG’s portfolio, and its exposure to Germany will be about 11%.
The project benefits from long-term protected cash flows through a Feed-in Tariff agreement.
The wind farm comprises 66 GE Haliade-150 6MW offshore wind turbines, and GE Renewable Energy provides Operations & Maintenance (O&M) services under a 10-year contract. The repair and retrofit works associated with the Merkur rear frame defect first reported in June 2021 are substantially complete and operating satisfactorily. The compensation due under the availability warranty for the year ended 31 March 2022 has been agreed with the turbine and O&M provider, with no financial impact on the carrying value for the project.
Battery storage investment
TRIG has also acquired a 100% equity interest in Project Spennymoor, a battery storage development project which will have a total capacity of 100MW / 200MWh when completed.
Project Spennymoor is situated in County Durham, in close proximity to a high voltage substation connection, and is ideally located to alleviate grid constraints and provide balancing services for the significant industrial cluster in the Humber region, one of six major industrial clusters in the UK.
Project Spennymoor is in the late-stage development phase. RES, the vendor, has secured planning permission, a grid connection offer and land lease options. The project has secured a grid connection enabling commencement of operations in 2031 [this is a long way off – we have talked before about the problems of securing grid connections for these battery projects]. Work is underway to bring forward the grid connection date if possible. Construction works will be timed to commence approximately a year before the connection date when finalised. Once operational, Project Spennymoor is expected to represent 2% of TRIG’s portfolio by value. The initial development investment is approximately 10% of the total anticipated investment.
TRIG : Renewables Infrastructure ups exposure to German offshore wind