Monday, 22 May 2023

Thrive Renewables - Full Year Results

In 2018 I started to transition to a more climate-friendly portfolio to bring my investments more closely in line with my values and lifestyle. So, last year I decided to take up a stake in a new share offer from Thrive Renewables (previously Triodos Renewables). The crowdfunding raised a total of £6.8m and saw 900 new shareholders join the Thrive community. The shares account for around 5% of my green portfolio.

This is an unlisted company so the shares in Thrive are not as easily traded as shares listed on the stock exchange with a low cost broker such as AJ Bell Youinvest for example. Instead, once purchased, any subsequent share sales are facilitated via a monthly share auction.


Thrive has been going since 1994 and is all about connecting ordinary people and sustainable renewable energy opportunities. They now have around 7,000 investors - individuals, businesses and organisations - and have established 31 projects throughout the UK including solar PV, battery storage, geothermal, hydro and wind. The combined capacity has generated over 2 million MWh of clean electricity over the past 25 years.

Thrive is certified B Corporation from 2020 with a score of 110.8 - the highest scoring renewable energy company in the UK. They currently rank in the top 5% of all global B Corps. Thrive are committed to reaching net zero carbon emissions by 2030 and have already achieved zero with scope 1 & 2 emissions.


The company have recently released results for the full year to December 2022 (link to pdf via Company website).

Turnover increased by 59% to 17.5m which resulted in gross operating profits of £6.7m compared to just £2.5m in 2021.

Clean energy capacity increased by 6MW with a further 25MW under construction. The portfolio generated a total of 133,858 MWh of clean electricity over the year - enough to power 38,000 homes or the equivalent of a town the size of Halifax.

“2022 has been a challenging year for many, with energy bills soaring as a result of the UK’s dependence on gas. Our response is to continue getting new renewable capacity built. This includes community-based projects such as England’s largest onshore wind turbine, as well as funding new rooftop solar arrays that help UK businesses to decarbonise and constructing a 20 MW battery storage project that will offer vital flexibility services to the grid. We've allocated a total of £11.4 million to developing more projects - all of which will help with decarbonising the UK’s electricity system so that people can benefit from cheaper, cleaner power in future.” – Matthew Clayton, Managing Director, Thrive Renewables

Power Prices

Most of Thrive’s income comes from the sale of renewable electricity. The wholesale market has been very volatile in recent years. For the 5 years to April 2021, the average price was £46/MWh but by August 2022 the price had risen to £370/ 8-fold increase.

Thrive manages its exposure to this volatility by maintaining a variety of long-term power purchase arrangements (PPA) and fixing the price for up to two years in advance. So already in May 2023 the majority of prices have been agreed for the whole of this year and beyond.

Around 37% of current generation benefits from government legacy 20 year support under the Feed in Tariffs and ROCs but more recent and future projects will obtain revenues from a range of power and grid servicing arrangements. These include selling power directly to the market via PPAs, selling power directly to industry via a private direct wire, entering into arrangements for government backed Contracts for Difference and, in the case of battery storage projects, providing grid servicing and balancing to take advantage of periods of high demand.

Community-Owned Onshore Wind Turbine

Projects over the year included England’s largest community-owned wind turbine supporting Ambition Community Energy in Bristol and the construction of a 20MW Feeder Rd battery storage site. They also secured government funding of £91m towards a new ground-breaking geothermal energy site in Cornwall. This will involve drilling down 17,000 ft to extract the heat from the granite rocks which should provide heating and hot water for 3,800 homes in the Redruth area.

This was a record-breaking year for wind across the UK and combined with higher energy prices, the board are increasing the annual dividend by 70% from 7p to 12p. This represents a yield of 5.1% on the price of 235p I paid for the shares last September.


Each year we see more and more evidence of the devastating impacts from the climate crisis all around the world. The latest warning from the World Met. Org. confirms something that has been apparent for some time - a probability that we will breach the key 1.5C global limit by 2027! Just last week N. Italy experienced its worst flooding for 100 years with 6 months of rainfall in a single day.

We need to decisively commit to end our reliance on fossil fuels and transition quickly to a more sustainable system based on a range of renewable energy solutions combined with measures to insulate our homes and factories to conserve energy.

United Downs Geothermal Project

Obviously an investment in Thrive Renewables will only have a small impact on the climate crisis. But it is rewarding to know that your investment
 is making a positive difference and helping to build the clean energy projects that will move us towards net zero emissions. The more people that support these sustainable solutions, the quicker we can transition to a less threatening world. 

Business as usual and continuing to rely on fossil fuels is no longer an option. Never before has it been so important to accelerate home-grown renewables and reduce our dependence on expensive, climate destroying fossil fuels.

As ever, this article is merely a record of my personal investment decisions and should not be regarded as an endorsement or recommendation - always DYOR!

Monday, 8 May 2023

The All-Weather Portfolio for Uncertain Times

A little while back I was thinking about the type of portfolio allocation that would be most appropriate for longer term investing during what could well be an uncertain future bearing in mind the significant threats posed by climate change. This report from Chatham House is one of many in recent times which highlights some of the risks we face over the coming decade and beyond. So, as I have pondered about these risks and how to position my portfolio, what came to mind was something I have known about for quite some time but until recently had dismissed as too extremely cautious... but the times they are a changin’!

What Is It?

The Harry Browne Permanent Portfolio is essentially an all-weather strategy and was devised in the 1980s by US investment analyst Browne. It is very simple and merely consists of an equal mix of equities, government bonds, gold and cash (or Treasury bills). Browne argued that this mix would be profitable in all types of economic situations. When times were good, equities would benefit; gold would prosper during periods of high inflation ( as we have seen over the past year or so); government bonds should perform better during periods of deflation and cash is king during a depression.

It is recommended that the portfolio is rebalanced every year to maintain the 25/25/25/25 mix.


Browne eventually created a fund based on his 1982 theoretical portfolio. Over the past 40 year period from 1976 to 2016, a hypothetical permanent portfolio would have given a compound annual return of 8.6% p.a. compared to a more traditional 60/40 portfolio return of 10.1%. The permanent portfolio returns come with much lower volatility. (via Investopedia)

According to Browne, the portfolio provides 3 key features - safety, stability and simplicity.

Possible Constituents

It should be fairly straight forward to set up a simple portfolio.

For equities, a low cost global index fund/ETF should fit the bill e.g. Vanguard All World ETF (VWRL). Personally I would prefer something that avoided fossil fuel companies so would select the likes of iShares MSCI World SRI (SGWS)

For government bonds maybe Vanguard Global Aggregate (VAGP)

Gold could be held via the likes of iShares Physical Gold ETF (SGLN)

For cash, I think the most obvious solution would be a higher interest cash deposit a/c with a building society.

None of us can know what’s around the corner and we live in increasingly uncertain times - climate change, Ukraine, Taiwan/China, inflation combined with high levels of government and corporate debt, the long term threats to humanity from AI chatbots - I just cannot see investment returns over the coming years from a more traditional 60/40 or 80/20 equity/bond mix being anywhere near the average of 8% or 9% we have seen over the past 20 or 30 years.

This excellent article from earlier this year on Monevator makes the case for looking further than just bonds for a truely defensive portfolio.

The benefit of the Permanent Portfolio is that it should deliver a half-decent return for investors in nearly every scenario short of the outbreak of nuclear war or some climate-related tipping point.


For some time I have been prevaricating on how to rebalance my portfolio to reflect the perceived risks ahead. This has resulted in a reduction in equities over the past 18 months or so and a significant increase in cash but of course holding high levels of cash over the longer term in times of high inflation is far from ideal.

There have been a few bumps in the road but on the whole, over the past 50 years, patient investors will have reaped their rewards when the markets bounced back. And after those downturns, investors have not had to wait too long for the 'inevitable' bounce-back...a year or so, maybe two years tops. But the markets don't always rebound as expected and as we are always reminded...past performance is no guide to the future. For example, during the Wall St crash of 1929, the Dow Jones index fell almost 90% from 381 in September 1929 to a low of 41 in July 1932. It was not until the end of 1954 that the index passed its previous peak of 381. The great optimism, consumer spending and economic growth of the 'Roaring 20s' became the Great Depression of the 1930s.

Just looking at my current portfolio mix, I am more or less on track to match the permanent portfolio with cash and government bonds so would just need to cut back on the equities a little more and increase gold quite a bit to create my diy all-weather portfolio. However, I will most likely be holding on to my renewable energy investment trusts which account for around 25% of my portfolio so maybe I will add them to the mix as an additional 5th asset class.

Could this is the ultimate set-and-forget portfolio?

Further reading - The Permanent Portfolio by Craig Rowland & J.M. Lawson

If you have any thoughts on the ideal defensive portfolio mix for an uncertain future feel free to leave a comment below.

Monday, 24 April 2023

iShares Gold ETF - Update

For some time now I have become increasingly bearish on global equities. Last year I decided to de-risk my portfolio and set out some of my thinking in this article. I have been selling off equities and increasingly moving into cash, government bonds and gold

In the past, I have never been a big fan of holding gold. Obviously it cannot provide an income so that was one reason back when I needed dividend income to bridge the gap after taking early retirement in 2008. But that doesn't mean there is no fact I was surprised to learn that over the past 15 years or so, gold bullion has generated a capital appreciation of 11% p.a. on average.

I think most investors will know that gold is traditionally regarded as a safe haven in times of economic and political uncertainty. It seems uncertainty is becoming the norm - the global pandemic still unwinds, invasion of Ukraine, high inflation and the rising cost of living, global warming and the climate crisis...not surprising therefore that the trust has performed well and is currently at an all-time high. 

In recent weeks we have seen the collapse of Silicon Valley Bank and the serious problems at Credit Suisse following which the price of gold rose to a record high point of £1,634/oz ($2,000). The World Gold Council revealed that central banks had accumulated gold at the fastest pace on record in early 2023 buying a net 125 tonnes. There is speculation that Russia and China are building gold reserves as backing for a new currency to rival the US dollar.

Long Term Gold Price (click to enlarge)

Therefore in times of increasing uncertainty, I believe it would be a mistake to discount the longer term value provided by gold.

I have increased my holding in Personal Assets trust over the past 12 months and that typically holds around 10% in physical gold. However, in late 2021 I decided to add a pure gold ETF to my portfolio - iShares Physical Gold (SGLN) which has been around since April 2011 and with low annual charges of 0.15%. With subsequent top-ups the average price paid was £24.50

Other options could be a fund such as Blackrock Gold & General or LF Ruffer Gold for example but as my platform charges are capped for shares and ETFs with AJ Bell, the iShares option was the better one for me.

So far it has proved to be one of my better investment decisions of recent times. The shares were purchased at an average price of £24.50 and have advanced to currently £31.30 so a handy 28% uplift over the past 18 months. The shares together with the holding of gold in Personal Assets trust now make up around 6% of my total portfolio (ISA and SIPP).


Rightly or wrongly, I increasingly regard the climate situation as the biggest threat to global markets. The unprecedented combination of heatwaves, droughts, storms and melting polar ice sheets suggests that the climate crisis is escalating. The IPCC released its latest report in March giving notice that we are now in the last chance saloon to take decisive action to mitigate the effects of global warming and urging world 'leaders' to actually do what they all know needs to be done. 

Many countries have pledged to reduce emissions at recent COP conferences but few have so far followed through on action. So, I see little sign of any decisive urgency to take meaningful action and think the worsening climate situation could well destabilise global economies.

So, for now I will continue with a more defensive portfolio and to hedge my bets with gold, government bonds and cash.

As ever, this article is merely a record of my personal investment decisions and take on the risk/rewards associated with the current markets. It should not be regarded as an endorsement or recommendation - always DYOR!

Monday, 10 April 2023

Gresham House Energy Storage Trust - Full Yr Results

Since its launch in December 2018, Gresham House Energy Storage (GRID) has developed the largest energy storage portfolio in the country. It operates 20 utility-scale energy storage sytems with a total combined capacity of over 500MW.

As we transition from fossil fuel generation to renewables such as wind and solar, we will increasingly need energy storage solutions due to the intermittent nature of renewable energy - the wind doesn't always blow and there's not much solar in the winter months.

Currently we use gas-fired generation to fill the gap but we have legislated for net zero carbon emissions by 2050 so the ability to store excess energy from an ever increasing capacity from renewables will be essential. As renewable capacity expands, gas-fired power stations will be required less frequently and so they become less profitable to run. This means that renewables are forcing fossil fuels off the grid.

As recently as 2014, coal was our main source of electricity generation. It is still used in the winter months but currently accounts for just 2% of  generation and is due to be completely retired by the end of next year.

GRID has several streams of revenue which include the wholesale market and National Grid balancing mechanism, Firm Frequency Response based on small-scale changes to the grid's electrical frequency, fixed fees for being on call to deliver power at times of extreme need and Triad payments from National Grid when there is peak demand.


The company have recently released results for the full year to end December 2022 (link via Investegate).

Net Assets have increased by 39% per share over the year on a total return basis to 155.5p (last year 116.8p) and share price return is up 29.6% compared to FTSE 100 Index of 4.6%. The share price premium has reduced from around 15% to currently 5%. This was by far my best performing investment over the past year.

Operational revenues increased by 22% to £62m compared to £51m for the previous year. The company is forecasting growth of at least 15% in the coming year.

Over the year, the company has acquired three more storage projects with a total capacity of 141MW. Operational capacity increased by 29% from 425MW to 550MW by the end of the year. Capacity is expected to reach 1GW by the end of 2023 and 1.5GW in 2024. Looking forward, the management are looking to expand overseas and will seek authorisation to invest up to 30% of assets internationally.Looking to the second half of the decade they aim to expand into Europe, US and Australia and have set an ambitious target of 5GW by 2030.

The total UK energy storage capacity has increased to 2.4GW and is expected to grow ten-fold over the coming 3 to 4 years. GRID continue to be the market leader with around a 30% share.

Commenting on the results, Chair John Leggate CBE said 

"In 2022 GRID further built on its strong track record and delivered significant growth in earnings, operational capacity and NAV per share, while maintaining a fully covered dividend as projects became operational. Following GRID's strong trajectory in 2022, the Company has set its ambitions higher going into 2023.

We expect the EBITDA of the underlying investment portfolio to increase in 2023 as more projects are commissioned and operational capacity increases. This should also lead to growth in both NAV per share and earnings per share. As such, we expect to increase our 2023 dividend by 5%.

We are exceptionally well-positioned to capitalise on the exciting battery energy storage opportunities ahead of us in the UK and our targeted international markets.

We expect to see the income generating capacity of the underlying investment portfolio grow as the Fund's operational MW capacity almost triples through 2025, and as MWh capacity grows even faster as we increase the average duration of our portfolio (new projects are increasingly built out to 2-hour duration). Beyond this, it is clear to the Board and the Manager that we are still only in the foothills of the opportunities in the energy storage arena in Great Britain and globally and significant growth beyond 2025 is expected to drive ongoing shareholder returns for many years."

The company has paid a total dividend of 7.0p over the past year as promised and has increased this target by 5% to 7.35p for 2023. This gives a forward yield of 4.6%.

GRID 3 Yr Share Price/NAV

I added this trust to my green portfolio in December 2019 at the price of 105p...its currently 159p and continues to trade at a premium to net assets. The shares currently account for around 6% of my green portfolio with a further 6% invested in Gore St Energy Storage.

The focus so far has been batteries but they are now looking at the potential from solar PV and I am wondering whether they have considered other energy storage solutions such as longer duration flow batteries or green hydrogen as these also have lots of potential.

“Our world needs climate action on all fronts - everything, everywhere all at once” said Antonio Guterres at the launch of the latest IPCC report last month. It emphasised the urgency in addressing the climate emergency and called for investment in clean technologies at scale. (In-depth guide to report from Carbon Brief)

The reality is that fossil fuel generation will gradually be replaced by renewables as we move towards our net zero target by 2050. This means increasing intermittency which will require ways to store energy to bridge the gaps and provide a constant supply.

So, the market looks bright for this sector of the transition to cleaner energy. I may well look to increase my holding in the coming year in the event of further share offering/placing.

As ever, this article is merely a record of my personal investment decisions and should not be regarded as an endorsement or recommendation - always DYOR!