Portfolio Update

Downing Renewables & Infrastructure

12 August 2024

 

12 August 2024

Downing Renewables & Infrastructure Trust plc

(the "Company" or "DORE")

Portfolio Update

Improved contract and annual revenue for Mersey Reactive Power

The Board of DORE is pleased to announce that Mersey Reactive Power Limited, a UK-based, fully operational 200 MVAr shunt reactor which the Company acquired in June 2023, has renegotiated its contract with the National Grid Electricity System Operator ("NGESO") to provide additional reactive power to the Merseyside area.

The shunt reactor is now available to be called upon by the network operator for unlimited use throughout the year, which will allow DORE to benefit from increased revenues under the availability-based Pathfinder Contract, part of National Grid's Stability Pathfinder Initiative.

DORE expects the shunt reactor to increase its annual revenue by c.£300k per annum (to be indexed with inflation) which is equivalent to c. 30% for the remainder of the nine-year contract.

Revenue generation from Swedish Frequency Containment Markets

Further to the Company's announcement on 3 July 2024 (Downing Hydro AB Pre-Qualifies For Frequency Containment Markets in Sweden), DORE is pleased to confirm that the Gottne hydropower plant has been earning revenues since 5 July following its pre-qualification for participation in the Frequency Containment Reserve markets (FCR-N and FCR-D) in Sweden.

Additionally, Downing Hydro AB ("DHAB") has submitted an application to the Swedish Transmission System Operator for a second hydropower plant to participate in the FCR-D market. Further sites will be submitted for FCR pre-qualification as DHAB continues to roll out this programme across its hydropower plants.

Blåsjön Nät AB

Blåsjön Nät AB ("Blåsjön") is a Swedish Electricity Distribution System Operator acquired by DORE in July 2023.

The transmission and distribution of electricity in Sweden is considered a natural monopoly, which means its tariffs and charges to customers are subject to regulation. Ei, the Swedish regulator, accordingly implements revenue caps for each distribution system operator for a regulatory period of four years. Ei, has concluded the regulatory decision for Regulatory Period 4 (RP4, 2024-2027) for Blåsjön, which includes a capital investment programme of c. SEK 33m (c. £2.4 million). The weighted average cost of capital (WACC) which Blåsjön is allowed to apply to its charges is set at 4.5%. As a comparison, Ei concluded a WACC of 2.3% for PR3 (2020 - 2023).   

Blåsjön also announces the appointment of Jan Delin as its new Chief Executive Officer following the retirement of Ingemar Persson after 27 years in the role. Delin, who was previously CEO of regional Swedish utility Edsbyn Elverk for ten years, has been a Board member of Blåsjön for almost five years.

Tom Williams, Partner, Head of Energy and Infrastructure at Downing LLP, commented: "We are pleased with the progress made by DORE's revenue optimisation strategy, as we continue to enhance our grid and hydropower assets and unlock further value from the portfolio. This progress is testament to the ongoing work undertaken by our deeply knowledgeable and experienced asset management team at Downing."

ENDS

LEI: 2138004JHBJ7RHDYDR62

Contact

Downing - Investment Manager to the Company Tom Williams	[phone]
Singer Capital Markets - Joint Corporate Broker Robert Peel, Alaina Wong, Jalini Kalaravy (Investment Banking) Sam Greatrex, Alan Geeves, James Waterlow, William Gumpel (Sales)	[phone]
Winterflood Securities Limited - Joint Corporate Broker	[phone]
Neil Morgan (Corporate Finance) Darren Willis, Andrew Marshall (Sales)
Cardew Group - Public relations advisor to the Company Tania Wild Henry Crane	[phone] [phone] [phone] [e-mail]

About Downing Renewables & Infrastructure Trust plc

DORE is a closed-end investment trust that aims to provide investors with an attractive and sustainable level of income, with an element of capital growth, by investing in a diversified portfolio of renewable energy and infrastructure assets in the UK and Northern Europe. DORE has been awarded the London Stock Exchange's Green Economy Mark in recognition of its contribution to the global 'Green Economy'.

The Board classifies DORE as a sustainable fund with a core objective of accelerating the transition to net zero through its investments, compiling and operating a diversified portfolio of renewable energy and infrastructure assets to help facilitate the transition to a more sustainable future. The Company believes that this directly contributes to climate change mitigation.

DORE's strategy, which focuses on diversification by geography, technology, revenue and project stage, is designed to increase the stability of revenues and the consistency of income to shareholders. For further details please visit   www.doretrust.com.

 

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