Brexit Threat `Largely Irrelevant' to U.K. Wind, Says Greencoatby
U.K.'s Climate Change Act ensures future renewables investment
Greencoat says its wind farms performed above budget
A British exit from the European Union would be “largely irrelevant” to the U.K.’s wind-power sector because the country has more ambitious climate-action policies than the rest of the 28-nation bloc, a partner at the U.K.’s largest wind-power fund said.
The U.K.’s 2008 Climate Change Act already commits the U.K. to reducing its greenhouse gas emissions by 80 percent compared to 1990 levels, which will be achieved through increasing the use of renewable energy, nuclear power and gas, said Laurence Fumagalli, a partner at London-based Greencoat UK Wind Plc, in an interview Monday.
“The market size for our fund is going to double,” Fumagalli said Monday in an interview.
Greencoat buys U.K. wind farms from developers, boosting their cash flows and offering investors stable returns. Whether or not the U.K. stays inside the EU, Fumagalli said he expects the country’s installed wind capacity to almost double, to 25 gigawatts, by 2020.
Greencoat’s 17 wind farms performed 8 percent above budget in the past year because it was windier than expected. The group generated 48.3 million pounds ($68 million) net cash, in line with its budget, because average power prices were below budget. The company will pay a 6.26-pence dividend for 2015, and is looking to raise the payout to 6.34 pence this year. The company generated full-year return on investment of 6.6 percent.
U.K. policies are supporting Greencoat’s green-energy business. Last year The U.K pledged to close all coal plants that haven’t been upgraded with cleaning technology by 2025. Moreover, Chancellor George Osborne’s carbon floor price, set at 18 pounds a metric ton until 2019, is 5 euros ($5.5) a ton higher than the price offered by the EU’s Emission Trading System.
“The U.K. is absolutely leading the rest of Europe there,” Fumagalli said.