Renewables Infrastructure Group’s assets in Europe have performed better than traditional energy companies so far this year.
  • TRIG’s portfolio of renewable energy assets has allowed it to pull through the first-half of 2020 with minimal pain when the value of conventional energy plunged.
  • The company owns wind, solar, and battery storage sites in the U.K., France, Germany, Sweden and Ireland.
  • TRIG’s portfolio produces enough clean power to meet the needs of 1 million homes a year and saves 2.7m tonnes of carbon emissions each year.

The Renewables Infrastructure Group is proving that its investments in wind, solar and batteries aren’t just good for the environment. The company’s assets are also proving something of a successful experiment in impact investing. 

Since the COVID-19 pandemic sent energy demand tumbling, pushing U.S. oil prices briefly below zero and slashing Saudi Aramco’s net income by half, TRIG’s net asset value has been dinged lightly. It’s fallen 1.7% during the first six months of 2020, while the U.K.’s FTSE 100 Index has tumbled 20%, weighed down by oil companies such as RoyalDutch Shell and BP. TRIG is based on the English Channel island of Guernsey and its shares trade on the FTSE. TRIG shares have climbed 7.8% this year while in the U.S., the S&P 500 Energy Index has tumbled 37% as of Aug. 10.

The pandemic triggered lower electricity prices, which were the main reason for the declining value of its assets, the company said on Aug. 7. Still, the company has been able to operate mostly as normal, meaning travel restrictions imposed to control COVID-19 had minimal impact on operations and TRIG continued to add to its portfolio.

“Even with the lockdowns we were allowed to get to sites,” Jaz Bains, Group Risk and Investment Director at RES, TRIG’s operations manager, told Karma. “We have wind engineers in France and the U.K., so border closures had a limited impact on us.”

TRIG was able to keep facilities running throughout the shutdown thanks to remote monitoring and shifting maintenance schedules, Bains said.

Favorable weather conditions in Europe bolstered both solar and wind power production this year, helping TRIG’s fortunes. Electricity output was 9.3% higher than projected thanks to both solar and wing creating more power than expected. These assets generate enough clean power to meet the needs of 1 million homes a year and saves 2.7 million tonnes of carbon emissions each year.

Wholesale electricity prices will probably remain depressed in the near term, according to Richard Crawford, infrastructure director at InfraRed, TRIG’s investment manager. InfraRed manages more than 200 infrastructure and real estate projects in 30 countries.

“It will probably be four-to-five years before the wholesale power price recovers,” Crawford said.

TRIG had 45 wind facilities, 28 solar sites and one battery storage project as of June 30. A little over half of the 74 projects were in the U.K. with the remainder in Germany, France, Sweden and Ireland. 

“There’s a roughly 50/50 split in TRIG’s portfolio between the U.K. and Europe,” Crawford told Karma. “Most of our growth is coming from Europe. France and Germany are our largest markets in Europe, we also have some in Ireland and Scandinavia. We are looking at Spain for future investment.”

Renewable energy is the fastest-growing energy sector globally and is projected to advance further as governments promote investment in wind, solar, hydroelectric and other clean power sources to tackle climate change. TRIG is well-positioned to benefit from the transition, according to InfraRed’s Crawford. 

“There’s been a push from governments to accelerate renewables deployment,” Crawford said. Still, focusing just on power generation to meet the Paris Agreement’s zero-emissions target by 2050 won’t get the job done. “We have to address carbon emissions from flying, heavy transportation, heating and cooling and other areas that are powered by fossil fuels.”

TRIG’s management believes that the spread of assets among different energy sources and countries reduces risks that come from variable weather patterns and regulatory changes. This diversification strategy may also help overcome the challenges possessed by COVID-19, InfraRed’s Crawford said.

“Clearly, there is still uncertainty,”  Crawford said.“We are all looking at how this progresses, and as we slowly come out of this. The assets are spread over several countries that are at different stages in coming out of lockdown.”