Aquila European Renewables published its end June factsheet this morning and has announced a fall in its NAV from 110.1 cents at 31 March to 104.1 cents.
The main drivers of this fall were beyond its control. Chief of them was a decline in the power price assumptions which is attributed to lower commodity prices on the back of mild temperatures in Europe and elevated filling levels of gas storage reservoirs. That alone took 8.1 cents off the NAV.
On the plus side, after due diligence, the assumed asset life of one Danish wind asset was extended by four years and two Portuguese solar PV assets by 10 years. This added 1.2 cents to the NAV.
In addition, the weighted average discount rate used to value AERI’s future cash flows fell from 7.3% to 7.2% as assets moved from the construction phase to being commissioned (reducing the risk associated with these invetsments).
There is one other negative in that the portfolio’s power output was 11.5% below budget over the quarter, primarily due to below average wind speeds in Norway, Denmark and Greece, as well as lower hydropower production in Portugal due to lower than estimated rainfall. In Spain, the problem could be described as too much sun – in June, the transmission agent and operator requested a curtailment of production as the grid was oversaturated by the considerable quantity of power being generated by solar PV plants.
The Norwegian Rock windfarm, which had been affected by icing issues in the first quarter of the year experienced much improved availability on the seond quarter (91.9%, up from 72.0%) which is another plus point.
AERI : Aquila European Renewables NAV reflects lower prices