LONDON — The U.K.’s negative media coverage of wind farms may have curbed a clean-energy fundraising, with the Ventus VCT Plc and Ventus 2 VCT Plc trusts receiving a fifth of the amount they targeted, a Temporis Capital LLP partner said.
“Through the fundraising period there were several negative press stories regarding wind in the U.K. in reference to the cost of living debate and the government’s forward energy policy,” Matthew Ridley, a partner at London-based Temporis, said in an interview. “This may have had an impact on our fundraising, even though wind is the least costly source of renewable energy in the U.K. and is well supported.”
The funds managed by Temporis raised 4 million pounds ($6.7 million) for wind and hydropower plants, compared with a goal of 20 million pounds. There will be enough money for projects this year when combined with funds from other parties, Ridley said.
Land-based wind turbines have met opposition from those who say they blight the landscape and are against green levies added to consumers’ power bills to spur investment in the industry. The ruling Conservative Party said in April it would end all subsidies for the technology if they win an election in a year.
Power from onshore wind farms is one of the cheapest forms of clean energy, costing about $84.8 a megawatt-hour compared with rates at greenhouse-gas emitting coal-fired power stations of $82.1 a megawatt-hour, according to Bloomberg estimates.
Temporis will invest the money raised in a 10-megawatt wind farm and two hydropower plants totaling 3 megawatts, Ridley said. The funds have a minimum target dividend from these projects of 5 pence a share from the second year and the figure is expected to rise to 6 pence to 8 pence a share, he said.
“We see good opportunities to create attractive risk adjusted returns from wind investments versus other technologies,” Ridley said. “With hydro one of the main attractions is the stable and long-term cash flows. Hydro schemes rely on tried and tested technology that has been around for a long time.” Projects can also run for more than 25 years.
Britain is also amending rules for some trusts that benefit from tax breaks from July, which may affect the Ventus funds and make it unlikely they will be able to invest in many renewables technologies, Ridley said. Temporis will study how best to raise future capital once the legislation has been published, he said.
“We have a strong team with a good track record and a significant pipeline of opportunities, and we expect to continue deploying capital in this space,” Ridley said.
Copyright 2014 Bloomberg.
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