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Bluefield Solar Income Fund Limited
15 May 2014
15 May 2014
BLUEFIELD SOLAR INCOME FUND LIMITED
Response to the release of DECC's Solar Strategy: Part 2 and the
consultation on changes to future RO Scheme Support levels
Bluefield Partners LLP ("Bluefield"), the Investment Adviser to
the Bluefield Solar Income Fund ("BSIF"), has prepared the
following statement following the release of the Department of
Energy and Climate Change's ("DECC") solar strategy document and
the subsequent consultation into regulatory supports for new solar
assets installed after April 2015.
In April, 2014, DECC released the UK Solar PV Strategy: Part 2
(the "Strategy"). This document should be viewed as a significant
step for the UK solar industry in which the UK Government has
clearly articulated a strategic ambition for balanced growth in the
UK solar market up to 2020 and beyond. This statement is a summary
of the key policy statements and proposals within the Strategy and
the subsequent consultation (the "Consultation"), followed by a
commentary by Bluefield.
Highlights
-- The Strategy is an important and positive statement for the
future prospects of the UK solar industry. It is targeting a
significant increase in the installed capacity of solar energy in
the UK from current levels in the next few years across all types
of installation;
-- The Strategy identifies commercial and industrial
installations (including the Public Estate) as the key growth area
for the next phase of industry development. DECC aims to accelerate
the growth of this sector by reviewing uptake so far, adjusting
permitted development rights, tackling landlord/tenant issues, and
seeking new financing models;
-- The Strategy confirms strong expected growth of large-scale
ground-mounted solar, and remains supportive of large scale, whilst
looking to accelerate the transition from the RO Scheme to
Contracts for Difference (CfD) due to unexpectedly high levels of
installations. The Consultation seeks transition to CfD proposed
from 1 April, 2015 for assets greater than 5MWp whilst continuing
the RO Scheme for sub-5MWp installations;
-- Proposals reflect the long-term goal of DECC for balanced
growth across different solar sectors using the most cost effective
regulatory support available for the end consumer;
-- The proposals for regulatory changes are exclusively forward
looking and will have no impact on existing installed capacity.
There are no proposed changes for any capacity installed up to 31
March, 2015.
Bluefield's Comment
Bluefield views the long term aspiration of the solar strategy
document in a positive light. It illustrates the increasingly
important and central role of solar PV in the UK's renewable energy
mix. It is also recognition of the UK solar industry's ongoing cost
reduction and deployment success combined with, broadly, high
levels of public support.
The proposals of the consultation will require the industry to
adopt the CfD mechanism earlier than expected as the government
moves the large scale solar industry away from the RO Scheme from
April, 2015 onwards. Cost reduction and deployment are at the heart
of the recent success of the UK solar industry and will be critical
prerequisites of its long term success.
Policy Area
Growth in commercial and Industrial Installations: the Strategy
and Consultation are looking to engineer the creation of a new,
large solar market, one which as yet has failed to gain the
traction. Solar is ideally suited to the commercial and industrial
type of installation DECC is promoting in the policy document:
installations on brownfield sites or rooftops, creating a
distributed generation model where the energy is used on-site,
generally at a discount to typical energy costs. DECC are exploring
both the non-financial and financial obstacles to this market in
order to create what would be, if successful, the biggest single
sector in the UK solar market.
BSIF has a stated aim to invest into commercial and industrial
sites and its Investment Advisor, Bluefield, was one of the
pioneers of the commercial investment market. Bluefield currently
advises on over 40 solar installations on industrial and commercial
sites, where on-site users such as Thames Water and Toyota benefit
from direct supply of electricity from on-site solar
generation.
Large Scale ground based installations: the Strategy and
Consultation recognises the contribution of this area of the
market, one that has seen strong growth since BSIF listed in July,
2013. In the past 9 months this market has gone from a very low
base to become the biggest solar market in Europe for primary
assets. There is expected to be continued strong growth under the
RO Scheme until April, 2015.
The CfD support mechanism is designed for large scale
installations and should provide clarity and simplicity for
generators. The solar industry's successful conversion to CfD will
need to see the government supportively consulting with the UK
solar industry over the coming months, an industry characterised by
relatively newly established small and medium sized private
enterprises creating domestic employment and growth.
The UK solar generation market is now well established, highly
successful and highly adaptable. We expect to see this success
continuing.
Enquiries:
James Armstrong / Mike Rand / Giovanni Terranova
Bluefield Partners LLP - Investment Adviser
Tel: +44 (0)20 7078 0020
Tod Davis / David Benda
Numis Securities Limited - Company Broker
Tel: +44 (0)20 7260 1000
Kevin Smith
Heritage International Fund Managers Limited - Company Secretary
& Administrator
Tel: +44 (0)1481716000
Note to editors
About Bluefield Solar Income Fund Limited (BSIF)
BSIF is a Guernsey-registered investment company focusing on
large scale agricultural and industrial solar assets. It raised
gross proceeds of GBP130 million in July 2013 through an initial
public offering of shares on the main market of the London Stock
Exchange. It raised a further GBP13 million in February, 2014 in an
oversubscribed placement.
BSIF seeks to provide shareholders with an attractive return,
principally in the form of semi-annual income distributions, by
investing in a diversified portfolio of solar energy assets, each
located within the UK, with a focus on utility scale assets and
portfolios on greenfield, industrial and/or commercial sites.
About Bluefield Partners LLP (Bluefield)
Bluefield was established in 2009 as a specialist investor into
solar energy. Bluefield's team has a proven track record in the
selection, acquisition and management of large scale energy and
infrastructure assets in the UK and Europe.
The managing partners have been involved in over GBP350m of
solar photovoltaic funds and/or transactions in both the UK and
Europe since 2008, including over GBP185 million in the UK since
December 2011. Bluefield has led the acquisitions, and currently
advises on, over 50 UK based solar assets. The majority of the
assets are situated on industrial and commercial sites.
Bluefield was appointed Investment Adviser to the Company in
June 2013.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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