Octopus Renewables snaps up eight UK solar farms in £144m mega-deal

Octopus Renewables has snapped up eight fully operational solar PV farms across the UK in a deal worth over £144m, as the green energy investor continues to expand its interests in both the domestic and European renewables markets.

The deal announced today sees Octopus Renewables take a 100 per cent stake in the 122.8MW solar portfolio for an initial cash consideration of at least £144.3m, although it said the figure could rise by £5.4m if further extensions to current lease periods are secured.

All the solar sites acquired - stretching across locations including Cambridgeshire, Lincolnshire, Oxfordshire, Essex, Yorkshire, and Cornwall - qualify under the UK's Renewables Obligation Certificate (ROC) subsidy regime, the company said.

"This investment marks a significant step towards building a diversified portfolio of renewable energy assets aimed at reducing the impacts of climate change," said Phil Austen, chairman of Octopus Renewables Infrastructure Trust. "This particular investment is expected to produce enough electricity each year to service the equivalent of 38,000 UK homes."

Octopus Renewables is the largest commercial-scale solar energy investor in Europe, boasting over £3.2bn of energy assets under management. Last month the firm launched a major IPO on the London Stock Exchange which raised £350m, smashing its initial target of £250m in one of the largest UK investment company raises of the year.

Today's investment - the firm's first major solar acquisition in the UK this year - amounts to approximately 42 per cent of the net proceeds from the IPO, and is the second in a pipeline of opportunities it is currently pursuing, the company explained.

Earlier this month, the firm also acquired the 48MW Ljungbyholm onshore wind farm in Sweden for £59m, which followed a deal totalling more than €100m last November with renewable energy developer RES for nine wind farms across the UK, Ireland and France.

Chris Gaydon, investment director at Octopus Renewables, said the latest solar acquisition formed part of a strategy to acquire a diversified portfolio of renewable energy assets across Europe, with the company having now spent 59 per cent of the proceeds from its recent IPO.

He also sought stress that he did not expect the current coronavirus crisis to materially impact on the firm's strategy, business, asset performance, or deployment of the remaining IPO proceeds.

"For our construction projects, such as the Ljungbyholm Wind Farm, we are in close contact with our partners and have made allowances for construction delays in our investment case, in addition to other commercial protections implemented specifically with Covid-19 in mind," said Gaydon. "We continue to see significant opportunities for further acquisitions and we look forward to updating shareholders with our progress."

Analysts such as BloombergNEF have recently warned the global solar and wind power markets could see their growth negatively hit by the escalating pandemic crisis gripping the global economy in 2020, with the US solar sector fearful of being particularly hard hit.

However, last year large scale solar projects reached record levels of growth worldwide, recent data shows.

According to statistics released earlier this week by global solar database Wiki Solar, utility-scale solar installations returned to growth in 2019, with a record 45GW of new capacity added worldwide.

It brings total cumulative capacity for large scale solar plants to over 220GW worldwide, with the top China, USA, and India by far the largest three markets, Wiki Solar said.

Analysts remain broadly confident that while the sector will inevitably face economic headwinds as a result of the global pandemic, the fundamentals driving the global transition to cleaner energy sources, such as tightening emissions rules and ever more cost competitive clean technologies, remain solid.

• Tweet  
• Facebook  
• LinkedIn  
• Send to  

• Topics
• Solar
• Venture Capital
• Octopus Renewables
• solar farms
• Solar PV