Total net asset value (NAV) returns soared in 2022 for renewable energy infrastructure trusts as they benefited from soaring power prices and few changes to input costs. But growth slowed in the December quarter, as higher discounts and cheaper power knocked valuations.
Trusts whose NAV was roughly unchanged or reduced in the three months to December 2022 included Foresight Solar Fund (FSFL), JLEN Environmental Assets (JLEN), Next Energy Solar Fund (NESF), The Renewables Infrastructure Group (TRIG) and Bluefield Solar Income (BSIF).
The exception was Greencoat UK Wind (UKW), which delivered a 7.8 per cent NAV increase after clarity over the government’s energy generation levy led it to update its conservative power price assumptions. A mix of factors slowed down most of the other trusts, including increased discount rates, lower power price forecasts and the government’s electricity generator levy, albeit they were offset by higher-than-forecast inflation.