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!


  1. Thank you for this. Interesting to read (in laymans terms) about the impact of the Electricity Generator Levy.

    1. Thanks Hague.

      Interesting to note that Orsted are warning the UK government today that a proposed £8bn project Hornsea 3 could be shelved unless they are offered similar tax breaks on investment as those enjoyed by the oil and gas industry. Let's see a level playing field here otherwise we risk falling behind the US and EU on future clean energy investment.