Ripple Energy wind farm?

NedS

70sbudgie said:

3) Ripple enables me to invest in grid scale renewable generation because as part of a co-op I could join in a process that would otherwise be out of my reach. I see this as a fantastic way to socialise renewable electricity generation. (It is a different investment to buy shares in a developer)

I disagree with this - Investment Trust companies that build and operate renewable assets (wind farms, solar farms), allow retail investors to do exactly this, and at a scale way beyond anything that Ripple can ever hope to achieve. For example, UK Wind (UKW) currently owns £4.8bn in assets (49 operating wind farms) and generates enough renewable electricity to power 2.3m homes in the UK (4,743GWh generation, ~6% of UK wind generation capacity).

It's just the way the companies are structured and marketed to investors that differs, but the result is the same - you own a share of a company that builds and operates renewable assets, and you share in their profits. Both are easily accessible to retail investors.

Reed_Richards

I disagree with this (the last sentence).  If I want to invest in an Investment Trust company that builds and operates renewable assets then that is easy, as is disinvesting.  But I can't invest in a Ripple Energy wind farm until they decide to build another one.  And if I had invested in one of their wind farms then disinvesting would be much more difficult.

Martyn1981

NedS said:

70sbudgie said:

3) Ripple enables me to invest in grid scale renewable generation because as part of a co-op I could join in a process that would otherwise be out of my reach. I see this as a fantastic way to socialise renewable electricity generation. (It is a different investment to buy shares in a developer)

I disagree with this - Investment Trust companies that build and operate renewable assets (wind farms, solar farms), allow retail investors to do exactly this, and at a scale way beyond anything that Ripple can ever hope to achieve. For example, UK Wind (UKW) currently owns £4.8bn in assets (49 operating wind farms) and generates enough renewable electricity to power 2.3m homes in the UK (4,743GWh generation, ~6% of UK wind generation capacity).

It's just the way the companies are structured and marketed to investors that differs, but the result is the same - you own a share of a company that builds and operates renewable assets, and you share in their profits. Both are easily accessible to retail investors.

It's not quite the same, though I appreciate it may just be psychological.

I'm invested in quite a lot of RE and similar G&E schemes ..... but ... they just earn me money, and the warm fuzzy feeling that I've helped to build more RE.

But Ripple generation is linked to your bill. The more the scheme generates, the more it affects your energy bill, during that period. So it's a little bit more like having your own PV or wind generation, impacting your import/bill. Obviously, you could take the earnings from a 'normal' investment, and use that to help pay the bills, but I do think the model is a bit different.

I (stupidly) missed the first two schemes, but then paid to lock in for the future ones. I nearly did the PV schemes, but I have decent PV generation, and can fix my winter shortfall issues by building some more myself (ground mount S facing), so decided to wait it out for another wind scheme, to have a more winter optmised impact.

I think both investment methods are great, and fine, but Ripple does allow folk to feel like they own actual generation, with an actual generation (scale and time) impact on their bills. This may appeal, or not, but it is at least a bit different, so hopefully widens the market to more potential investors.

Netexporter

Personally, I don't think the CfD takes away from the warm fuzzy ownership bit. It just means getting a known, inflation-linked, rate for the next 15 years, subject only to the vagaries of how much the wind blows.

70sbudgie

There is a difference between owning a share in a wind farm and owning shares in a company that builds wind farms. I'm not saying one is better than the other, but they are different. 

70sbudgie

Netexporter said:

Personally, I don't think the CfD takes away from the warm fuzzy ownership bit. It just means getting a known, inflation-linked, rate for the next 15 years, subject only to the vagaries of how much the wind blows.

I agree with the "warm fuzzy ownership" bit, but Ripple promoted their projects with the ability to hedge as one of the major selling points. The certainty that a CfD provides doesn't provide that ability to hedge. It would probably suit a lot of investors that I saw comment (at the time the share offers were open) that it isn't the best return on an investment. And therefore, I suspect the majority people that did invest in Ripple projects did so for reasons that didn't include wanting certainty of their investment.

I am torn between being pleased that Ripple are offering the option through a vote (CfDs weren't really an option at the time of the KH share offer) and disappointed that they are considering moving their innovative projects into mainstream financing.

FenixUK

NedS said:

Exiled_Tyke said:

I bought in as a hedge against rising electricity prices. So for me I'm against CfD. If prices are low then I don't mind losing the bonus the CfD would have given as my electricity bill will be lower. However if prices go up I'd like the extra benefit from Ripple to help with my higher bills.   

For reference, FSFL currently yields 9.5% return that is largely inflation-linked, and you will still have your capital after 20-30 years. So a £10,000 investment is going to pay you £950/year (towards your bills if you like), and you can cash in your investment at any time, with the potential your capital investment may also have risen (or fallen) in value.

That's a very handsome return - but is that not partly due to the high energy costs at the moment ? It can't be expected to stay at that level long term ? 

NedS

FenixUK said:

NedS said:

Exiled_Tyke said:

I bought in as a hedge against rising electricity prices. So for me I'm against CfD. If prices are low then I don't mind losing the bonus the CfD would have given as my electricity bill will be lower. However if prices go up I'd like the extra benefit from Ripple to help with my higher bills.   

For reference, FSFL currently yields 9.5% return that is largely inflation-linked, and you will still have your capital after 20-30 years. So a £10,000 investment is going to pay you £950/year (towards your bills if you like), and you can cash in your investment at any time, with the potential your capital investment may also have risen (or fallen) in value.

That's a very handsome return - but is that not partly due to the high energy costs at the moment ? It can't be expected to stay at that level long term ? 

Reading the latest Annual Report, they cite dividend cover as being 1.6x in 2023, and predicting 1.5x in 2024 and 1.35x in 2025 based on the current forward price curves. Don't forget that over 50% of their revenue is from guaranteed government ROCs/FITs, CfDs etc, and much of their production for the next 2-3 years has already been sold/locked in via agreed PPAs, so what electricity prices do over the short term is of less importance. It's anyone's guess where power prices will go over the long term.

To add a little more context, UK Wind (UKW), who have a dividend cover closer to 2x (was as high as 3.2x during the recent electricity price peak - and a slightly lower yield of around 7.5%), have said they can cover the dividend through inflation-linked government obligations alone, even if power prices were to drop to near zero, so those dividends look pretty safe even if power prices were to fall off a cliff. The share price would likely fall significantly as this is based on a DCF basis (but so may inflation if power prices move towards zero), and reinvestment of free cash flow into the fund would suffer, affecting the funds ability to grow it's assets - something which is essential in retaining the real value of your investment and preventing the fund from becoming a wasting asset (such as Ripple, or the solar panels on your roof).

Raxiel

Just had the email for the Whitelaw Brae Wind Farm announcement. 14 Turbines (60MW) in the Scottish Borders. Looks interesting, but one thing that concerns me is that with Derril Water they made a point to mention the site had good grid connection options so there would be no external hold ups in energising it. Here it's not mentioned at all?

Netexporter

It says, "Whitelaw Brae provides an excellent location for wind resource along with a feasible connection to the national grid", I suppose it depends on the definition of "feasible".