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!

Tuesday, 21 March 2023

iShares Global Clean Energy ETF - Update

This exchange traded fund, launched in 2007, gives investors an opportunity to invest in a range of globally diverse companies involved in renewable energy. The fund joined my portfolio in March 2019 at 433p and has been topped up on a couple of occasions.

It is an index fund and tracks the S&P Global Clean Energy Index which has been expanded to allow up to 100 holdings and a methodology which provides a greater weighting to more liquid stocks.

Why Clean Energy?

The invasion of Ukraine, surging oil and gas prices combined with a growing realisation of the threats posed by climate change has ramped up the demand for renewable energy. Of course, this has boosted the demand for funds which can offer investors some exposure to this sector.

The introduction of the Inflation Reduction legislation in the US will provide $369bn for climate solutions and clean energy programmes so I believe the long term prospects are positive. Current estimates suggest they are on track to provide over 60% of generation from renewables by 2030 (currently 22%). According to analysis from Ember, the EU they expect to exceed their 40% target by the same date and current projections are between 45% - 50%. The dials are certainly shifting.

Unfortunately we are just not moving that dial with sufficient speed. In 2021 we had the ‘Code Red for Humanity’ report from the IPCC.  Now we have their latest report (and main points follow-up) with a dire final warning to act now or it will be too late to avert a climate disaster. 

"There is a rapidly closing window of opportunity to secure a liveable and sustainable future for all," the report states. Clearly “clean energy and technology can be exploited to avoid the climate disaster”.

The use of fossil fuels account for three-quarters of greenhouse gas emissions so we need to transition to alternative, cleaner forms of energy asap. Fortunately we already have the solutions - renewable clean energy such as wind, solar, hydro and tidal stream is cheaper than fossil fuels and can be rolled out at scale globally so the only question to be answered is what is standing in the way?

(click to enlarge)


The ETF fund holdings include :

Plug Power (2.7%) a leading provider of fuel-cell engines and green hydrogen-based solutions in the US. Some high profile customers include Amazon, BMW, IKEA, Walmart and Carrefour.

Enphase (7.7%) a global energy technology company and the world’s leading supplier of solar microinverters. these connect solar generation, storage and management on one intelligent platform.

First Solar (8.3%) a leading global provider of PV solar energy solutions based in Arizona and first listed on Nasdaq in 2006.

Solaredge Technologies (7.0%) another Nasdaq-listed US company providing inverter solutions across all segments of the solar PV market. 

Vestas Wind (4.5%) and Orsted (3.0%) leading global renewable energy operations with a main focus on offshore wind.

Iberdrola (6.2%) one of the leaders in global renewable energy and aiming for 50GW capacity by 2025.


The fund had an amazing run...a couple of years back it moved from under £4.00 in March 2020 to reach a high point of £14.00 in mid February 2021...happy days... but then a significant pull-back over the following year with the share price falling to a low point of 740p by early 2022. The share price has become a little more stable over recent months and has just dipped below the 900p in the past few days due to the fallout from SVB and Credit Suisse. Total return over the four years since purchase is 106%.

INRG 3 yr share price

Clearly the decision by Putin to invade Ukraine last year sent shock waves around the world. It highlighted how dependent the West had become on Russia’s oil and gas. We know we need to move away from fossil fuels to address the climate crisis and this ongoing crisis just adds more urgency to the need to move to alternative forms of clean energy. The EU has urgently reviewed its energy security strategy and is speeding up the transition to clean energy alternatives.

I have taken a punt on several individual companies held in this fund in recent years - Orsted, Plug Power, Vestas Wind, Enphase etc. - but most are now sold and I think a diversified approach for exposure to this sector with the likes of this ETF probably makes more sense so I am very happy to continue holding these shares which currently make up a significant percentage of my green portfolio.

I am expecting more volatility - the holdings are all equities after all - so a good degree of patience will be required to have the best chance of a decent return over the longer term.

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!

Tuesday, 7 March 2023

A New Solar Offering from Ripple Energy

Last year I flagged up a new project from Ripple Energy which offered an opportunity to buy into a new wind farm co-operative. Whilst the government prevaricate on the speed of the renewable energy roll-out, I like the idea that ordinary people who are concerned about the climate crisis have the opportunity to take action.

This is the Kirk Hill site in SW Scotland. Planning permission was granted in 2020 and they are currently installing the hard standings for the turbines which should be arriving in the summer. It is due to become operational in November following which I will start to receive a regular discount to my electricity bills...just in time for next winter! I was encouraged to learn that over the past year, investors in the first project in S Wales have received an average of £977.

In less than 10 minutes, the much larger Kirk Hill site will generate enough electricity to power the average home for a whole year.

Energy Bills

This time last year I was paying 21.8p/kWh for electricity and 23.5p/day standing charge. Just 12 months later and charges have increased dramatically... 66.1p/kWh - an increase of 203% before the price cap discount and 44.7p standing charge.

Last March the energy price cap was £1,277 but next month this will be £3,280. I’m not sure how Ofgem arrive at this figure as wholesale gas prices - which set our energy bills - have fallen back significantly over recent months and are now below the level of last February when Russia invaded Ukraine. However the government have held average prices at £2,500 for the past 6 months under the Energy Price Guarantee and there is a strong possibility this could continue for a further 3 months. In addition most households have received £400 winter support over the past six months but this will not be extended so we will need to find the extra £67/month to fill the gap until the next quarterly review of the price cap. Hopefully this will fall below £2,500 from July.

Buying directly into a renewable energy project is a way for everyone to protect themselves from rising energy costs.

The New Solar Offer

Building on the two existing wind turbine projects, Ripple are now proposing their third offering which will be solar. This will offer investors a chance to diversify their energy mix.

So basically, you buy shares in the new solar farm based on your average annual electricity consumption. Enter your annual consumption here to give an idea of the likely initial cost.

When the project is completed and connected to the grid and starts generating power, your electricity provider eg Co-Op Energy (powered by Octopus), buys your share of electricity generated from the solar farm and pays the operator a low amount to cover operating costs and passes on the rest to you via a reduction in your bill.

The initial purchase is a one-off payment...typically £2,500 which would buy enough electricity for the average house. This payment can be spread over 12 months. At current prices, this would mean a saving of around £200 per year and therefore a payback period of under 15 years. The estimated lifespan is 40 years. Of course, wholesale energy prices will fluctuate - they could go higher which would mean even more saving but could go lower but then energy bills should come down.

Of course only a proportion of our bills are for the actual energy consumed and you still have to pay the daily standing charges, VAT, green levies etc. which can account for over 40% of the average bill.

Environment and Climate Change

In addition to the savings on our energy bills, there are significant benefits to the climate. This is a new solar farm which would not otherwise have been built. So the more consumers who join up means Ripple have more confidence they have a good model and can plan ahead with more new clean energy projects in the future. Around 950 people signed up for the first wind farm project and over 5,000 for Kirk Hill. I expect this third offering to be far more popular after the energy crisis of the past year and around 18,000 people have registered a firm interest in this latest project.

Windier in winter, sunnier in summer...
a good combination

Onshore wind and solar are some of the lowest CO2 sources of power in the UK. The model is around 50% to 60% cheaper than individuals installing their own rooftop solar PV...currently around £6,000 on average.

The Kirk Hill site is estimated to save 12 million Kg of CO2 every year which is equivalent to taking 8,200 petrol/diesel cars off the road.

Obviously the invasion of Ukraine has brought into sharp focus the need to reduce our dependence on Russian oil and gas and become far more self reliant.


So, last year I signed up for my small share of the Kirk Hill wind farm and have just paid the final monthly instalment. I like the idea of solar and the opportunity to share in the first consumer-owner solar co-operative. However, my initial calculation suggest that it will be roughly 50% more than the cost to buy into the Kirk Hill project so I will need to look into the details when the prospectus and formal share offer is launched. I need to find out why the up front cost is significantly more expensive as I think the construction costs for onshore wind and solar are very similar. Obviously inflation and the increased costs of construction will be a factor; I believe the load/capacity factor is different for solar compared to onshore wind. In the UK, wind is 3x more efficient than solar but has higher long-term maintenance costs; also the estimated 40 year lifespan means more savings compared to the 25 years for the wind farm.

But initial costs considerations aside, I do like the idea of ordinary people joining together to establish a new solar farm feeding clean energy into the grid which would not otherwise be built and which will be a small part of the transition to net zero emissions.

It will probably be 2025 before the solar park is completed but in the meantime I look forward to getting my regular monthly discount off my bills from Kirk Hill wind farm later this year.

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, 27 February 2023

Greencoat UK Wind - Full Yr Results

UKW is one of the largest renewable infrastructure trust with a market value in excess of £3.5bn and a constituent of the FTSE 250. The trust has a fairly simple business model operating a portfolio of 35 onshore and offshore wind farms throughout the UK generating 1.6GW of clean electricity. The trust was launched in 2013 and over this period, returns for investors including dividends have more than doubled making it one of the best performing trust in the renewables infrastructure sector.

The trust pays quarterly dividends and aims to maintain payments at least in line with RPI inflation. The company's target is for a total shareholder return of 8% to 9% per year which it has exceeded since launch.


UKW recently announced results for the full year to December 2022 (link via Investegate). 

Net assets per share increased 25% from 133.5p to 167p as a result of significantly higher power prices and high inflation combined with very strong cash generation. The NAV figure is reduced by 8p which takes account of impact from the new Electicity Generator Levy.

The portfolio generated 4,362 GWh of clean electricity which was 5% below expectations due to lower than average wind during the second half of the year. Total return for the year (dividend + share price appreciation) was 13.5%. Since launch in 2013, the return has been 153% which equates to an average annualised return of 9.7%.

Dividends should keep pace with inflation and a total of 7.72p per share was paid over the past year. The dividend is linked to the higher RPI which underpins a 13% increase and a target for the coming year of 8.76p giving a forward yield of 5.5% based on the current share price of 157p.

Commenting on the results, Shonaid Jemmett-Page, Chair of Greencoat UK Wind, said:

"2022 was another significant year for the Company, as we continue to build on our well-established track record. Our simple, low risk, and proven strategy has enabled us to increase our dividend once more, and to target a dividend of 8.76p per share for 2023, a 13.4% increase reflecting December's RPI."

"The year represented another significant period of growth, with £1.2 billion invested in high quality assets, increasing our portfolio generating capacity to 1.6GW. This underlines the size and scale that the Group has attained since listing."

She announced that she will be stepping down from the position next year.

UKW has a 12.5% stake in the world's
largest offshore wind farm

I found the Outlook section of the report interesting...

High power prices again drove strong cash generation in 2022 and the Group should continue to benefit from strong cash generation over the next few years through its balanced exposure to power prices. We continue to apply a conservative discount to future power prices, albeit at an appropriately reduced level. The net result has been a material increase in NAV per share.

Assuming a dividend yield of 5 per cent, the 9 per cent total return would be delivered through a combination of dividends (5 per cent) and growth in NAV per share (4 per cent). Given the underlying index linked nature of the portfolio cash flows, both the dividend yield and growth in NAV per share benefit from a high degree of inflation protection. 2022 dividend cover was 3.2x and, in line with the Company's dividend policy, the target dividend for 2023 has been increased by December's RPI to 8.76 pence per share.

We believe that a 9 per cent total return, with inflation protection, should be very attractive to investors in the new higher interest rate environment.

In general, the outlook for the Group is very encouraging, with proven operational and financial performance from the existing portfolio, combined with a healthy pipeline of attractive further investment opportunities.

Obviously this outlook is positive for investors and continues to be very attractive for those seeking income and a hedge against inflation. However it is always subject to the situation in Ukraine and how global power prices and inflation play out over the coming year(s).

Under the renewables obligation certificate (ROC) arrangements, around half of UKW revenues are effectively guaranteed until 2037 and going forward they will likely take advantage of long term contracts for difference which again fixes the prices of the electricity generated. More homes and businesses receive clean energy whilst more carbon dioxide from thermal fossil fuel generation is displaced and investors receive their relatively safe 5% inflation-proofed income...a win, win all around!

According to a recent report from the IEA, the global energy crisis is driving a sharp acceleration in renewable energy and they suggest renewables will become the largest source of global electricity by early 2025.

Here in the UK we are aiming to ramp up offshore wind capacity from 14GW to 50GW by 2030 and hopefully a further 10GW of onshore wind as we target a decarbonised electricity grid by 2035. Labour would go further should they win the next general election with plans to secure clean power by 2030 with a doubling of onshore wind and a quadrupling of offshore wind.

The future certainly looks bright for the likes of UKW and TRIG.

UKW 3 Yr share price/NAV
(click to enlarge)

Similar to TRIG, the shares are now trading at a modest discount to net assets which could well prove to be an attractive purchase opportunity should the share price revert to its more traditional 10% premium over the coming months. UKW accounts for around 12% of my green portfolio and is one of several renewable energy infrastructure trusts which make up just over half of the portfolio. I like the idea of covering my domestic energy bills with the dividend income they generate.

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!

Thursday, 23 February 2023

TRIG - Full Year Results

This investment trust was launched in 2013 and gives investors an opportunity to tap into the UK and European renewable energy sector – offshore and onshore wind, solar and battery storage. The geographic breakdown is : UK 60%, Sweden 12%, Germany 9%, France 8% and Spain 8%. They aim to generate sustainable returns from a diversified portfolio of renewable energy infrastructure that contribute towards a zero-carbon future.


This week the company released results for the full year to end December 2022 (link via Investegate).

They were the strongest results since launch in 2013 on the back of significantly higher power prices and inflation.

The portfolio generated 5,376 GWh of clean electricity, an increase of 30% on 2021 which is sufficient to power over 1.6m homes and avoid 1.9m tonnes of CO2.

Net assets per share for the period increased by 12% to 134.6p compared to 119.3p a year earlier whilst earning more than doubled from 10p last year to 21.5p in 2022. Factor in dividends and the total return NAV for the year was 18.9%.

The board have announced a fourth quarter dividend of 1.71p (payable March) making a total of 6.84p for the year and then a 5% uplift to 7.18p is planned for the coming year giving a fwd yield of 5.5%.

The shares have traditionally traded at a significant premium to net assets in previous years however, as can be seen from the graph, in recent months the premium has now turned to a small discount which suggests the shares could be good value as and when the discount reverts to a premium again.

TRIG 3 Yr Share Price/NAV
(click to enlarge)

Windfall Tax on Renewables

In November the government announced the introduction of the Electricity Generator Levy. This is a 45% tax on revenues above £75/MWh for the 5 year period 2023 to 2028. Obviously much will depend on the direction of future power prices but early indications suggest this will impact TRIG and reduce NAV by an estimated 8.3p per share.

A little more detail from the report:

“The Autumn Statement in November announced the introduction of the Electricity Generator Levy to applicable UK wind and solar assets. This imposes an effective 70% tax on "excess" revenues from the sale of electricity (excluding where these are derived from government support, i.e. ROCs, CfDs and FiTs). Excess revenues are defined as those above £75/MWh. The 70% effective tax comprises a direct 45% levy on revenues above the threshold and 25% corporation tax as the levy is not considered a deductible expense for corporation tax. The levy is expected to be applied for 5 years from 1 January 2023 and the £75 is indexed by CPI, with the first £10m of "excess revenue" provided as an allowance each year (i.e. escapes the levy).

The impact of the EGL is to reduce the uplift in value from increased power price forecasts. The adverse valuation impact of the introduction of the EGL has been £188.1m. It also has the effect of reducing project sensitivity to changes in power prices down to the £75 threshold, as analysed in the key sensitivities section”.

However, the management calculate that over the next 10 years 63% of revenues are linked to inflation via subsidy support mechanisms whilst most of the remaining revenues will be indirectly supported by power prices which should provide a significant hedge against future inflation.


The demand for more renewable electricity both in the UK and Europe will only be moving in one direction as governments come under increasing pressure to decarbonise their economies and meet their carbon emission reduction targets. The energy crisis brought on by Russia’s invasion of Ukraine last February has served to speed up the transition to renewable energy.

Brilliant from does he do it?

The UK government have brought forward the date for all new cars to be emission free from 2035 to 2030. In a decade we could see 35 million pure electric cars on our roads and this will require lots of clean energy. In addition, gas which heats 85% of our homes is due to be phased out for all new house build from 2024 so there will be increased demand for alternatives such as electric heat pumps for space heating.

Finally, with higher inflation expected to persist this year and maybe remain at a high level whilst the energy crunch play out, I am hoping my renewable energy infrastructure holdings will provide their traditional hedge against rising inflation whilst the 5% income will offset my higher energy bills.

In more recent times, the performance has improved and no doubt the higher power prices due to the global energy crunch is a significant factor. I decided to top up my portfolio last Autumn and the shares currently make up around 12% of my green portfolio.

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!

Wednesday, 15 February 2023

NIBE - Full Year Results

NIBE is a heating technology company based in Sweden. It has three basic business areas - Element, Climate Solutions and Stoves. Climate is the fastest growing segment and over the past year accounted for around 2/3rds of sales and 72% of the groups profits. Clearly climate change is rising to the top of the political agenda on a global basis and the company is well positioned to take advantage of the opportunities this provides - especially in the field of heat pumps which will become an option for heating our homes as an alternative to fossil fuels such as natural gas. It is one of the leading companies in Europe and North America in the area of sustainable solutions for domestic heating.

The company has been trading for over 70 years and has a long-standing ethos of working on sustainable solutions and energy efficiency. It was floated on the stockmarket in 1997 and has grown sales at an average of 18% p.a. over this period with an ever increasing global presence.

Heat pumps and related technology are tried and tested solutions for space heating in Scandinavian countries but relatively unknown in many parts of the world. Many countries, including the UK are actively looking at ways to decarbonise the domestic heating sector which accounts for around 40% of carbon emissions.


Climate change is the greatest challenge of our time. We need to reduce greenhouse gas emissions by 50% by 2030 compared to 2010 levels to keep on track for net zero by 2050. All of the products offered by the company are designed to make a significant contribution to tackle climate change. They offer sustainable, energy-efficient solutions such as heat pumps that reduce energy consumption by up to 80% and reduce GHG emissions in all types of buildings both domestic and commercial.

Last year, the EU announced their 'Green Deal' and proposals to target net zero carbon emissions by 2050. A central part of the strategy will be the goal to decarbonise the energy sector and prioritise energy efficiency and transition to a power sector based on renewable energy. In the US, the Biden administration has pledged to cut greenhouse gas emissions by at least 50% by 2030. This is double the country's previous commitment under the 2015 Paris agreement.

(click to enlarge)

Of course the situation in Ukraine and the resulting energy crunch has brought a sharp focus to the dangers of our dependence on fossil fuels and there is now a growing realisation of the need to speed up the decarbonisation process and move to a greener, more decentralised energy system based on cheaper renewables.

Heat Pumps

The largest sector for the group is climate solutions and within this sector, the largest element is heat pumps. These pumps extract the stored energy from the sun contained in the soil or air and transfer this energy indoors to provide indoor heat as well as hot water. The two main types of heat pump are ground source where pipes are laid under the soil and air source where heat is extracted directly from the air.

In the UK (and much of Europe) around 85% of our homes are heated by gas central heating. However we have legislated for net zero emissions by 2050 and will need to find alternative ways to heat the nations homes as gas (fossil fuel) will not be an option. We have already ruled out gas central heating for all new homes built after 2024 so electric heat pumps (as well as solar and battery storage) could play a big part in the huge transition of our energy use.

The UK offers financial incentives to install a heat pump via the new Boiler Upgrade Scheme. These incentives will go a long way towards the costs of installing a heat pump system with a grant of £5,000. The aim is to offer 30,000 grants in each of the first three years on a first come first serve basis.

Obviously the demand for solutions which support the switch from fossil fuels to renewables will grow and grow. As the market grows so prices fall which in turn creates greater demand. Companies like NIBE who have a clear commitment to sustainable solutions will be the likely beneficiaries of the transition to a new way of doing things. This is why I decided to add this company to my green portfolio.

Results for 2022

The company have today released full year results for 2022 (link via company website).

Combined sales increased by 30% to SEK 40bn and generated net profits of SEK 5.7bn (2021 4.3bn) which reflects a margin of 14%. The company pays a small dividend which will increase by 30% this year to SEK 0.65 per share (subject to FX considerations for UK shareholders!).

Given the backdrop of the global pandemic and the conflict in Ukraine, this has been an excellent performance and the new target for sales is doubled to 80bn.

Commenting on the results, Gert Lindquist, MD and CEO said: “We would sum up 2022 as a year of extremely strong demand. The main reason for this was the realisation by both politicians and end-consumers that we need to end our dependence on fossil fuels in order to be able to deal with the climate change issue in earnest. This realisation has been further strengthened by Russia’s terrible invasion of Ukraine. Our biggest challenge during the year concerned material and component supply, which impacted our delivery capacity, but this situation has gradually improved. In the fourth quarter, our production and deliveries were at a substantially higher level than before, while productivity also improved. This was the result both of our sub-suppliers’ ability to adjust to a much higher level of demand and our own extensive measures to increase capacity. We can therefore look back on a strong full-year performance, with continued robust growth in both sales and profits, and report that we exceeded SEK 40 billion, which means we were once again able to double sales in four years”

The shares were added to my green portfolio in June 2020 at the price of SEK 50 (adjusted for share split) and advanced steadily to reach an all-time high of SEK 135 by the end of 2021. The shares retreated quite sharply during 2022 but have recovered to the current price of SEK 123. The holdings currently makes up around 6% of my green portfolio.

NIBE 12m share price

From what I have seen so far, this appears to be a very well run and profitable company with a focus on providing solutions to the global problem of climate change. As the world increasingly moves away from its dependence on fossil fuels, this will provide huge opportunities for growth from companies such as NIBE which offers ready-made, energy efficient systems using renewable energy.

The biggest challenge we face is the reduction of greenhouse gas emissions to slow down the current rate of climate change. There is now a growing awareness of the impacts from a changing climate and the rise in extreme weather which threatens our living conditions, biodiversity and political stability. NIBE and its products will increasingly be part of the solution and is a good example of how businesses are an essential part of solving the climate crisis we face.

Although I have disposed of most individual share holdings over the past year, I think NIBE is likely to be a long term hold.

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, 2 January 2023

Portfolio Review - End 2022

Another year rolls by and this is now my 10th end-of-year review since starting my blog in February 2013. And what a year it’s been...Boris gone and replaced by Liz Truss who lasted 7 weeks before being replaced by Rishi Sunak. The passing of our longest serving monarch, Queen Elizabeth in September with many thousands queuing for up to 14 hours to pay their respects.

But above all a year dominated by the devastating decision by Putin to invade Ukraine in February. Hard to believe that the decision of one crazy person can bring about widespread deaths, misery and disruption to millions of ordinary people.

Food, energy and basic materials have all gone up significantly which has resulted in the cost of living crisis and rampant inflation on a level last seen in the 1970s. According to Bloomberg its the worst year for equities and bonds combined since 1926! Government bonds which are normally a safe haven in turbulent times have behaved like risky equites - especially during the brief tenure of Truss/Kwarteng and their proposals for unfunded tax cuts. In fact, the Vanguard Lifestrategy 20 (20% equities/80% bonds) most popular with the very cautious investors, was the worst performer in the LS range over the past year... -15% return.

So, maybe a good time to remember the oldest rule of investing...the value of investments can go down as well as up! Most investors will have had a bumpy ride this year but it’s worth remembering that we’ve mostly had a good run this past decade. Whether we make a gain in any one year is a bit of a lottery so we need at least a time frame of 5 to 7 years to provide a more reliable indicator of strategy.

The markets have taken quite a tumble and most investors will be looking for a reversal, however, I’m decidedly more circumspect on the ability of the global economy to bounce back any time soon and over the past year I have been selling off some equities and dusting off the old tin hat. I set out some thoughts on the risks back in July.

Vigil at Westminster Hall

Climate Change

Although the situation in Ukraine and now the cost of living crunch have dominated the news headlines, the climate crisis has continued to get worse and the world gets warmer each year... 2022 is no exception...the UKs warmest ever year... in July the Met Office issued a first-ever red alert for severe heat and our first-ever temperature of over 40C (previous 38.7C from July 2019) was confirmed in several locations on the same day that saw many wildfires around London. It was no surprise to learn that July was our driest month since 1911.

Further afield we saw devastating heatwaves across Europe with many wildfires and the worst drought for 500 years...that’s back to the time of Henry V111 and Anne Boleyn!

Also in the US where 100 million people faced danger to life warnings across more than 25 states... we also saw the devastating floods affecting a third of Pakistan with 30 million people made homeless also Bangladesh and also Sydney - hundreds killed and thousands made homeless. China experienced an unprecendented prolonged heatwave for over two months with record temparatures reaching 43C in several provinces. The drought and prolonged heat combined with continuous Covid lockdowns will have a significant impact on China’s economy. 

There are however some signs of some progress - the Inflation Reduction Act in the US will be a landmark piece of legislation aiming to reduce carbon emissions by up to 44% by 2030. In Europe there’s the REPowerEU plans to become independent of Russian gas and oil by 2027 and will speed up the transition to renewable energy.

Unfortunately, we are still waiting for governments to take these issues more seriously. The climate scientists have delivered warnings for many years on the threats from global warming so its really baffling to see the persistent reluctance of politicians to act with urgency and in co-operation around the world to tackle this huge existential problem. A recent report from the UN suggests that since COP26 last year, government plans for reducing emissions have been woefully inadequate and there is now no credible pathway to keep warming below the critical 1.5C.

Another concern is rising levels of debt...the monetary and fiscal response to the pandemic was 3.5x higher than the response to the 2008/09 financial crisis. Global debt is now at its highest since the end of WW2 and it will take at least the coming decade to bring this down to more sustainable levels. This high debt level would be more manageable if interest rates remain low but with surging inflation, the central banks have no option but to raise interest rates and we are seeing inflation starting to create instability in the markets and much higher interest repayments for borrowers.

As a result of the climate situation, I have been reevaluating my investment strategy and decided to make some changes (see below). 


So, after a rollercoaster couple of years dominated firstly by Covid, and now all the uncertainties thrown up by the invasion of Ukraine, it’s not surprising that global markets have struggled to make progress this year.

At the halfway mark, I decided to de-risk my portfolio starting with a raft of equity sales - Microsoft, Google, AJ Bell, Orsted, Vestas, ITM Power and a reduction in various collectives - iShares World SRI and Allianz Global Technology.

However I have increased my renewable infrastructure - more Bluefield Solar, TRIG and Greencoat UK Wind as I was hoping they will benefit from the rise in power prices...well, that was before the government’s new tax on renewable energy!

I have also invested in a couple of unlisted opportunities... Ripple Energy community wind farm which is currently under construction and due to be completed in November 2023 and also invested in Thrive Renewables who launched a new share offer to raise £7m for new renewable energy projects.

However, I still have a large percentage in cash and will probably keep this on the sidelines for the coming year to see how things unfold.

Portfolio Returns

I have just put in the final figures for the spreadsheet of my investment portfolios - sipp flexi drawdown and ISA - for the full year to 31st December.

The FTSE 100 has done better than most markets this past year and has risen from 7,384 to 7,452 and taking dividends into account a total return of 4.6% for the full year. As a matter of interest, the FTSE 100 finished at 6,749 when I did my first annual review to the end of 2013. Not much progress over the past 9 years!

The US markets are down much more with the S&P500 falling 21%...Tesla down 70% and Meta (Facebook) down 65%.

The Vanguard Lifestrategy 60 fund is a diverse mix of global equities and bonds and although I disposed of my holding some years back, it provides a good benchmark for a balanced global portfolio. The fund is down -11.2% over the past year and the VLS 80 is down -8.8%

Technology - With returns of over 50% in the previous two years, I was half expecting some pull-back this year but maybe not quite as dramatic! My tech sector is down 20%. After the mid year sale of various shares, Tech now accounts for just under 10% of my portfolio.

Green - After triple digit gains for many of my green portfolio holdings in 2020, I think it was inevitable that there would be some pull back. Over the year I have taken profits on quite a few holdings - NIBE, Orsted and Vestas, sold Nel in August and also ITM Power. These now represents 55% of the total...down from 80% at the start of 2021 After a stellar year in 2020 and gains of 52%, my green sector has come back to earth with total returns down -13.9% ...exactly the same as 2021. The small hydrogen-focussed shares were the biggest casualties with Ceres down 60%, ITM Power down 65% and L&G Hydrogen ETF down 29%.

The positive returns have been provided by iShares Global Clean Energy +5.5%, Bluefield Solar and Greencoat Wind both +10%, SSE +17% (now sold) and Gresham House Energy Storage +29%.

Defensives - I thought it was a sensible move last year to bank some of the profits from equities and move into government bonds and gold. This has certainly helped to mitigate some of the falls from my technology and green sectors this past year. Whilst the gold ETF is up 11.5%, a big surprise however has been the decline in my index-linked government bonds...down 50% in September following the disasterous Truss/Kwarteng blip. The sector as a whole is down -7.9% on the year.

The Complete Basket

As a whole, the portfolio has delivered a total return of -12.8% over the past year which takes account of all dealing costs. Here's my portfolio returns covering the past 10 years. 

2013 13.3%, 

2014  5.4%, 

2015  2.7%  

2016 11.4%

2017 11.3%

2018  -2.7%

2019  21.9%

2020  43.8%

2021  -6.5%

2022 -12.8%

A sum of £1,000 at the start of 2013 has more than doubled to £2,100 and an average annualised return over the past 10 years of 7.8%.


Obviously an average annualised return of just under 8% over the past decade is very acceptable. It could have been much better this year had I locked in returns from my green/tech sector earlier...investing is so much easier through the rear view mirror! Of course, patience and the ability to stick with the plan are key to successful investing but that has not worked out so well these past two years. The clean energy and hydrogen sectors have had a bumpy 12 months but with all the growing risks, I am not so confident they will provide a good return over the coming years. Return on my investments have been positive in 7 of the past 10 years.

Obviously as a grandfather to five, I am concerned about the climate situation and how badly it will impact the world over the coming years. The devastating images we have seen these past couple of years - wildfires over huge areas of the west coast states of the US and Siberia, devastating flooding and disappearing polar ice caps should  be a warning of what's coming down the line for the planet if we carry on with business as usual. Hopefully in the coming year we will get some real leadership but after COP 27 and a refusal to agree on a strategy to phase out fossil fuels, I am not very hopeful.

I am in no doubt that the risks to the global economy have increased this past 12 months which is why I have sold off a large proportion of my portfolio. However, if the climate continues to get worse, the global markets may well become more unstable and the better green companies could be dragged down with the rest. Maybe I should call it a day and sell off the rest of my portfolio...maybe cash/gold will be the place to be over the next decade?

How we tackle the climate crisis over the coming few years will be the defining story of our generation. I hope the global community can start to fully appreciate the risks and address some of the fundamental issues in 2023 and we can speed up the transition away from fossil fuels and avoid some of the dire consequences which lie in store with warming over they say, it's going to be very interesting!

Finally, wishing all readers a happier New Year and thanks to all for dropping by during the past year... all best wishes for 2023

As always, if you keep track of portfolio returns, feel free to leave a comment and share with others how your investments have fared over the past year.