Update on Operations, Deal Exclusivity and RCF

RNS Number : 2295A

Triple Point Energy Efficiency

01 February 2022

 

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1 February   2022

Triple Point Energy Efficiency Infrastructure Company plc

("TEEC" or the "Company" or together with its subsidiaries, the "Group")

Update on Operations, Deal Exclusivity and Revolving Credit Facility

Triple Point Energy Efficiency Infrastructure Company plc (ticker: TEEC), a closed-ended investment company investing in a diverse portfolio of energy efficiency assets in the United Kingdom, is pleased to provide an update on its operations, deal exclusivity and pipeline development.

Update on the Hydro Portfolio

· Towards the end of 2021, TEEC invested £47 million across a portfolio of nine ungeared hydroelectric power assets, with a total generation capacity of 6.6 MW.

· Q4 2021 performance of the portfolio was 17 per cent. ahead of budget (which provides the base case for valuation purposes) from a generation and revenue perspective, and 5 per cent. ahead in terms of availability.

· c.90 per cent. of revenues for the Hydro Portfolio are underpinned by government supported Feed in Tariffs (" FiT ") with a remaining FiT period of c.14 years.

· All FiT revenues under the Hydro Portfolio benefit from annual indexation to UK RPI, with the next uplift due in April 2022. With UK RPI currently at c.7.5 per cent., this is expected to result in a meaningful uplift to revenues and underpins the highly defensive and attractive nature of this portfolio.

· The Investment Manager and the operations and maintenance provider have commenced investigative work aimed at enhancing the performance of the hydro assets further (the " Hydro Enhancement Programme ").

· The Hydro Enhancement Programme revolves around optimising the flow from the catchment area which will improve the generation profile for the assets. A key aspect of this programme is the re-instatement of peatland which has significant associated environmental benefits related to biodiversity and carbon sequestration.

Update on the CHP+ Portfolio

· Earlier in 2021, TEEC invested a total of £29 million across three CHP+ assets in the form of senior debt with a weighted average return on capital of 7.65 per cent. The underlying assets comprise:

o  Harvest and Glasshouse (March 2021) - two operational, established energy centres on the Isle of Wight comprising 22 MW of power generation facilities; and

o  Spark Steam (June 2021) - one operational, established energy centre located in Teesside comprising 3.3 MW of power generation facilities.

· Each of the CHP+ assets supply heat, electricity, and also carbon dioxide to the UK's largest tomato grower.

· Spark Steam has signed a new, additional Power Purchase Agreement with a well-known, large food manufacturer through a private wire arrangement. This arrangement benefits the food manufacturer by providing it with savings against its electricity costs, whilst enabling Spark Steam to benefit from a greater level of contractual cashflows at more attractive rates. By supplying power through a short private wire, significantly greater energy savings will be made than previously expected due to much reduced transmission losses as compared to sales to the national grid .

Deal exclusivity and Pipeline development

Battery Energy Storage Systems opportunity

The Investment Manager, on behalf of the Company, has been looking at a number of opportunities to invest in grid-scale battery energy storage systems in the UK. These fall within the distributed energy segment of TEEC's mandate.

We are pleased to announce that the Investment Manager has secured, under exclusivity, a near-term pipeline of £108 million of grid-scale battery energy storage systems assets which it is progressing.

With the continued roll-out of intermittent renewable energy facilities across the UK's grid, demand for grid balancing and storage solutions in the UK is likely to stay high for a significant period of time. Grid-scale battery energy storage systems provide one of the most effective and proven solutions to the issue of loss of electricity in transmission, storing power when it is produced in excess and then making it available when demand is higher.

Wider pipeline

In addition to the grid-scale battery energy storage system opportunities under exclusivity, the Investment Manager is also in discussions on a wider pipeline of £454 million across a range of sectors.

RCF

Following the investment in the additional portfolio of Hydro Assets announced in December 2021, TEEC is now substantially deployed. To fund the short-term pipeline and to allow greater financial flexibility going forwards, TEEC is in the process of arranging a revolving credit facility (" RCF ") of up to £40 million.

John Roberts, the Company's Chairman, said:

"I am pleased with the performance of TEEC's existing investments as well as the emerging diverse pipeline of high quality assets which provides a great opportunity to accelerate TEEC's growth ambitions. Batteries are essential to improve front of meter energy efficiency, to maximise and make use of the intermittent power from the grid scale renewables which are making up an increasingly larger proportion of the UK's generating capacity."

For further information, please contact:

Triple Point Investment Management LLP Jonathan Parr Jonathan Hick	020 7201 8989
Akur Limited (Financial Adviser) Tom Frost Anthony Richardson Siobhan Sergeant	020 7493 3631
RBC Capital Markets (Joint Broker) Matthew Coakes Jill Li Kathryn Deegan	020 7653 4000
Winterflood Securities (Joint broker) Neil Langford Hande Derinkok	020 3100 0000

LEI: 213800UDP142E67X9X28

Further information on the Company can be found on its website: www.tpenergyefficiency.com .

NOTES:

The Company is an investment trust which invests exclusively in a diversified portfolio of Energy Efficiency assets in the UK, which have a positive environmental impact. The Company's investments will focus on the core sectors of industrial energy efficiency, distributed generation, and battery storage solutions.

The Investment Manager is Triple Point Investment Management LLP ("Triple Point") which is authorised and regulated by the Financial Conduct Authority. Triple Point manages private, institutional, and public capital, and has a proven track record of investment in Energy Efficiency and decentralised energy generation projects.

The Company was admitted to trading on the Specialist Fund Segment of the Main Market of the London Stock Exchange on 19 October 2020 and was awarded the London Stock Exchange's Green Economy Mark.

 

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