There will be major consolidation in the renewables sector in the UK over the next couple of years, according to Dan Wells, a partner in the infrastructure team at investment managers Foresight.

Developers and EPC contractors have held projects on their balance sheet for several years but do not want to hold them long-term, Wells said in an exclusive interview with New Power. “The build-out was done in a fragmented way with lots of companies,” he said. “There are some large portfolios that will be coming to market in the coming months and we are very well networked in the sector so we will hopefully be in the forefront in making those acquisitions.”

Wells’ comments were illustrated last week when TerraForm sold 24 UK operating solar projects totalling 365MW to Vortex, a renewable energy platform managed by EFG Hermes’ private equity arm. “We are delighted to complete the acquisition of such high quality solar assets. Our portfolio in Vortex has now reached 822MW of wind and solar assets across Europe” said Karim Moussa, head of asset management and private equity at EFG Hermes.

Wells said that investment in new renewable energy assets was also evolving, with more interest in merchant plants. The UK is, “two to three years away from unsubsidised solar being viable,” especially if it is on a customer site, and onshore wind is similarly close to subsidy-free, said Wells.

His comments echo those of Toni Volpe, chief executive of Falck Renewable, show told New Power he was in the market for development projects in the UK. Volpe said, “the UK has never been at a better moment, because at the moment the pipeline is scratching their heads and some people are selling. It’s good money if you have a long-term view and want to acquire a pipeline.”

 

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Full interview with Foresight’s Dan Wells

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