New investors: new industry darlings?

On Wednesday last week, a company called Greencoat UK Wind raised £260 million on an oversubscribed flotation on the London Stock Exchange.

Such was the demand that Scottish & Southern Energy had to reduce its holding to 10 million shares. That’s less than a quarter of the investment that the utility had initially envisaged.

However, Wednesday’s listing was about more than just the headline numbers.

Sure, they helped tell a good story and created some seriously strong cash flow. But that wasn’t really what the entry to the stock market and the initial flurry of trading activity was really all about.

For, in an instant, the infrastructure fund that will invest exclusively in UK onshore and offshore wind became something far more important – it became the new industry investor darling.

And in doing so, it brought a much-needed breath of fresh air to a market that has had a torrid twelve months.

More reassuring still, the fund hasn’t been hanging about.

It’s already built up a seed portfolio of interests, covering six separate farms, generating a net capacity of just over 125MW.

All of the Greencoat assets, including a 25% interest in Cheyne Court, are located onshore, while the sixth project, Rhyl Flats, is located eight kilometres off the North Wales coast.

And Rhyl Flats – a 25-turbine farm, operating 3.6MW Siemens units – hasn’t been shying away from the headlines over the past seven days either.

For RWE, the utility that developed the project, has rather deftly offloaded a 49.9% stake split equally between Greencoat UK Wind and the Green Investment Bank (GIB).

That frees up valuable capital for the utility to re-develop and invest, while at the same time providing both eager investors with a means through which to tap into the potential for some strong future commercial returns.

Interestingly of course, both parties have been careful to understand and spell out the project risk – something that’s critical given the cable failure experienced back in January that has limited the export of power to just two of the three cable links.

Thankfully a temporary fix has already been completed and a more permanent solution to the problem is underway. What’s more, with the project currently producing power that does not currently exceed the capacity of just two of the cables (65MW), there’s been no potential loss in revenue from the site to date.

That should provide the respective management teams at both Greencoat UK Wind and at GIB with some further confidence – although given the track record of both teams, that’s hardly in short supply.

And it’s this confidence that will prove integral to future successes, as the portfolios of both investment vehicles expand, and the projects move through their lifecycles.

Significantly, most of these up and coming firms, like Greencoat, are being established by a cadre of individuals who, having left more established firms, are setting up on their own, taking bold approaches and seeking new opportunities.

Naturally, it’s still too early to tell how these new players will fare. And the wind industry may still provide a few storms that will require a firm hand on the tiller to navigate the market successfully.

Nevertheless, as their numbers swell, look out for increasingly determined individuals seeking a firmer grasp of what the wind industry has to offer.

On Wednesday last week, a company called Greencoat UK Wind raised £260 million on an oversubscribed flotation on the London Stock Exchange.

Such was the demand that Scottish & Southern Energy had to reduce its holding to 10 million shares. That’s less than a quarter of the investment that the utility had initially envisaged.

However, Wednesday’s listing was about more than just the headline numbers.

Sure, they helped tell a good story and created some seriously strong cash flow. But that wasn’t really what the entry to the stock market and the initial flurry of trading activity was really all about.

For, in an instant, the infrastructure fund that will invest exclusively in UK onshore and offshore wind became something far more important – it became the new industry investor darling.

And in doing so, it brought a much-needed breath of fresh air to a market that has had a torrid twelve months.

More reassuring still, the fund hasn’t been hanging about.

It’s already built up a seed portfolio of interests, covering six separate farms, generating a net capacity of just over 125MW.

All of the Greencoat assets, including a 25% interest in Cheyne Court, are located onshore, while the sixth project, Rhyl Flats, is located eight kilometres off the North Wales coast.

And Rhyl Flats – a 25-turbine farm, operating 3.6MW Siemens units – hasn’t been shying away from the headlines over the past seven days either.

For RWE, the utility that developed the project, has rather deftly offloaded a 49.9% stake split equally between Greencoat UK Wind and the Green Investment Bank (GIB).

That frees up valuable capital for the utility to re-develop and invest, while at the same time providing both eager investors with a means through which to tap into the potential for some strong future commercial returns.

Interestingly of course, both parties have been careful to understand and spell out the project risk – something that’s critical given the cable failure experienced back in January that has limited the export of power to just two of the three cable links.

Thankfully a temporary fix has already been completed and a more permanent solution to the problem is underway. What’s more, with the project currently producing power that does not currently exceed the capacity of just two of the cables (65MW), there’s been no potential loss in revenue from the site to date.

That should provide the respective management teams at both Greencoat UK Wind and at GIB with some further confidence – although given the track record of both teams, that’s hardly in short supply.

And it’s this confidence that will prove integral to future successes, as the portfolios of both investment vehicles expand, and the projects move through their lifecycles.

Significantly, most of these up and coming firms, like Greencoat, are being established by a cadre of individuals who, having left more established firms, are setting up on their own, taking bold approaches and seeking new opportunities.

Naturally, it’s still too early to tell how these new players will fare. And the wind industry may still provide a few storms that will require a firm hand on the tiller to navigate the market successfully.

Nevertheless, as their numbers swell, look out for increasingly determined individuals seeking a firmer grasp of what the wind industry has to offer.

On Wednesday last week, a company called Greencoat UK Wind raised £260 million on an oversubscribed flotation on the London Stock Exchange.

Such was the demand that Scottish & Southern Energy had to reduce its holding to 10 million shares. That’s less than a quarter of the investment that the utility had initially envisaged.

However, Wednesday’s listing was about more than just the headline numbers.

Sure, they helped tell a good story and created some seriously strong cash flow. But that wasn’t really what the entry to the stock market and the initial flurry of trading activity was really all about.

For, in an instant, the infrastructure fund that will invest exclusively in UK onshore and offshore wind became something far more important – it became the new industry investor darling.

And in doing so, it brought a much-needed breath of fresh air to a market that has had a torrid twelve months.

More reassuring still, the fund hasn’t been hanging about.

It’s already built up a seed portfolio of interests, covering six separate farms, generating a net capacity of just over 125MW.

All of the Greencoat assets, including a 25% interest in Cheyne Court, are located onshore, while the sixth project, Rhyl Flats, is located eight kilometres off the North Wales coast.

And Rhyl Flats – a 25-turbine farm, operating 3.6MW Siemens units – hasn’t been shying away from the headlines over the past seven days either.

For RWE, the utility that developed the project, has rather deftly offloaded a 49.9% stake split equally between Greencoat UK Wind and the Green Investment Bank (GIB).

That frees up valuable capital for the utility to re-develop and invest, while at the same time providing both eager investors with a means through which to tap into the potential for some strong future commercial returns.

Interestingly of course, both parties have been careful to understand and spell out the project risk – something that’s critical given the cable failure experienced back in January that has limited the export of power to just two of the three cable links.

Thankfully a temporary fix has already been completed and a more permanent solution to the problem is underway. What’s more, with the project currently producing power that does not currently exceed the capacity of just two of the cables (65MW), there’s been no potential loss in revenue from the site to date.

That should provide the respective management teams at both Greencoat UK Wind and at GIB with some further confidence – although given the track record of both teams, that’s hardly in short supply.

And it’s this confidence that will prove integral to future successes, as the portfolios of both investment vehicles expand, and the projects move through their lifecycles.

Significantly, most of these up and coming firms, like Greencoat, are being established by a cadre of individuals who, having left more established firms, are setting up on their own, taking bold approaches and seeking new opportunities.

Naturally, it’s still too early to tell how these new players will fare. And the wind industry may still provide a few storms that will require a firm hand on the tiller to navigate the market successfully.

Nevertheless, as their numbers swell, look out for increasingly determined individuals seeking a firmer grasp of what the wind industry has to offer.