The Renewables Infrastructure Group Limited (TRIG) Earnings Call Transcript & Summary

I'm Helen Mahy, Chairman of TRIG, and I'm delighted to welcome you to The TRIG 2020 interim results presentation. I'm joined by Richard Crawford and Phil George from InfraRed, our investment manager; and Jaz Bains and Chris Sweetman from RES, our Operations Manager. Events of 2020 with which we are all, of course, only too familiar, have been challenging for everyone. I hope that you and your families are well. In light of this backdrop, I'm pleased to report that TRIG's financial performance has been resilient, and its positive outlook enables us to reconfirm the 2020 dividend target of 6.76p per share. We are acutely aware that the dividend income that TRIG provides is important to our shareholders. Delivering this is a direct result of the diversified portfolio built by InfraRed and strong operational performance delivered by RES. As a reminder, our portfolio is capable of powering 1 million homes with clean energy whilst avoiding over 1 million tonnes of carbon emissions every year. The COVID-19 pandemic has brought into sharp focus TRIG's sustainability objectives that extend beyond mitigating climate change and preserving the natural environment to having a positive effect on the communities in which we work. To that end, the company has committed a further GBP 0.5 million to support the communities around our assets in their response to the pandemic. This is over and above the usual amounts which are contributed to community projects as part of expectations set at each project's planning stage, meaning such contributions will be approaching GBP 1.5 million in aggregate in 2020. Both managers have raised substantial funds to the charities that are responding to the pandemic. The Board is pleased to have managers that fully share our focus on environmental, social and governance matters. InfraRed has achieved the top A+ rating from the PRI for a sixth successive year while RES continue their excellent work in implementing our sustainability policies on the ground. With that, I'm pleased to hand you over to Richard.

Thank you, Helen. I'm Richard Crawford, Director at InfraRed infrastructure team and take day-to-day responsibility for the management of TRIG. Now turning to Page 7, we cover some of the highlights for the half year. TRIG is weathering the COVID-19 crisis pretty well. Generation in the first half has been good, almost 10% above budget with all regions and sectors at least approximately on budget and several areas, including GB wind well above. Availability has been good and we estimate the pandemic has cost less than 1% of Q2's generation due to the careful planning, including that led by RES on the operational side. And whilst curtailment has been up in the GB market, we have participated in the National Grid's balancing services, including that introduced for assets on the distribution network, providing compensation when asked to turn down. Turning to power prices. Low demand for electricity, some 10% down in Q2, has led to materially lower wholesale power prices. The average price achieved in the first half of the year at GBP 36 per megawatt-hour is approximately GBP 10 per megawatt-hour down on H1 2019. The impact, though, has been mitigated by a high level of forward sales, which were entered into before the pandemic, insulating the portfolio. In addition, TRIG's balance portfolio has a large portion of investments benefiting from feed-in tariffs. And indeed, taken together, subsidies and fixes are expected to be some 80% of total revenues in 2020 as a whole. In terms of M&A activity within the sector, we have seen less deal flow compared with previous periods with a significant slowdown in Q2. Nevertheless, we are very pleased to have closed Merkur offshore wind farm. We gave details of the project at the 2019 results, but notable, it is a German wind farm in the North Sea with 7 years of feed-in tariff, followed by power price floor for the next 10 years. Now this addition and the disposal of the Erstrask wind farm after the period end has contributed to a significant reduction in power price exposure for TRIG. Full sensitivities are given in the appendices for later reference, but the power price sensitivity for a 10% movement in forecast has reduced from 7.4% to 6.6% of portfolio value. The outlook for deal flow is looking stronger in the second half of the year and going forward, and I'll return to the market opportunity later in the presentation. Continuing with the highlights of the half year. On Page 8, we give some key numbers before Phil takes over to explain the valuation in detail. Overall, NAV is down 2p in the 6 months to 113p. Earnings, up 1p per share, remains positive for the period. This reflects, on the negative side, a material adjustment in forecast power prices primarily due to the pandemic, but also longer-term adjustment to gas prices, as we've been mitigated by valuation enhancements, including increased demand for renewables, enabling a sharper discount rate to be used. And as we have seen, the overall performance of the portfolio has been very strong. Now we deployed GBP 281 million into new investments in the period as well as Merkur. We also invested in Blary, a construction phase wind farm in Scotland being built by RES, an incremental investment into the portfolio of French onshore wind farms alongside our partner Akuo. And we funded further construction spend at Solwaybank wind farm in Scotland. This is progressing well and we expect it to complete later this year. These investments were funded with existing cash resources, the company's revolving acquisition facility and also an equity raise in [ MEG ]. The issue was oversubscribed, raised GBP 120 million for the issue of 100 million shares. Phil will now take you through the detail of the portfolio valuation.

Okay. Thank you, Richard, and good morning, everyone. I'll start with the key valuation movements and then cover some of the other financial highlights. Turning to Slide 10. Slide 10 shows the valuation bridge of explanatory notes on Slides 11 and 12. The bridge takes us from a value at the 31st December 2019 of GBP 1,745 million to the valuation at 30th of June of GBP 2,009 million. TRIG invested GBP 281 million and cash distributed in the period from the investments up to TRIG of GBP 78 million, takes the rebased valuation to GBP 1,948 million. Following valuation moves for the rebased valuation to the closing valuation of GBP 2,009 million, represent the operating income shown in the profit and loss account. Our price forecasts have reduced significantly in the near term, driven principally by a reduction in electricity demand due to lockdown restrictions. The curve is down slightly over the longer term as well, with lower gas and other commodity prices assumed. The overall reduction of the curve has an adverse valuation impact of GBP 123 million. On Slide 11, we've also included data on our average power prices assumed, the value shown and the blended power price curve after having factored in cannibalization. With 80% of income fixed over the next 12 months, 74% fixed over the next 5 years, 51% over the next 20 years, TRIG has a high level of fixed income over long time horizons. And as a result, TRIG is well placed to cope with power price uncertainty. In our construction of the portfolio, we carefully managed power price exposure. And the investments in the period further assisted here, helping us to reduce the power price exposure further and reduce the overall portfolio sensitivity to future moves in power prices. TRIG's sensitivity to power prices has improved by 10% over the period. Turning to the valuation bridge and also see the accompanying commentary on Slide 12. We have reduced discount rates used to value the portfolio by slightly less than 0.2%. This benefited portfolio value by GBP 29 million. Whilst in the early months of the pandemic, we saw transaction volume contract. In recent months, transaction activity has resumed, and we've seen plenty of evidence of valuations remaining strong with this asset class clearly in very high demand and proving to be relatively resilient. We have observed discount rates continue to tighten, especially if those investments were produced to power price risk. The portfolio valuation discount rate has reduced from 7.25% to 7%, which reflects both the decrease applied to the valuation discount rates and also the reduction in risk across the portfolio associated with the decrease in forecast merchant power prices. The company's independent valuation exercise conducted at the 30th of June included a review of valuation discount rates adopted, which confirm the discount rates used remained cautious. Continuing on Slide 12. We've made a GBP 56 million valuation gain on foreign exchange as our euro-denominated investments are worth more in sterling terms as sterling has weakened against the euro in the 6 months. This is offset by losses incurred on hedges held at company level, leading to an overall foreign exchange gain for the company in the period of GBP 22 million. The balance of portfolio return for the period is GBP 99 million. And as the portfolio return comprises the expected return, reflecting the net present value of the cash flows brought forward by 6 months at the portfolio discount rate, 7.25% before the discount rate reduction, an outperformance comprising strong generation upside, which exceeded the downside of reduced power prices and some portfolio value-enhancing items, including reducing maintenance costs on renewal of contracts and improved power purchase agreement terms. Closing valuation at 30th June 2020, as shown in the balance sheet for TRIG Investments is GBP 2,009 million. Further highlights are included on Slide 13. The detailed financial results are included in the appendix and I shall focus on the highlights only. As we've just covered, the portfolio value has grown in the period by 15% as a result of additional investments and valuation growth. The 2020 dividend target, we reaffirm is 6.76p, which is a 1.8% growth from 2019. Ongoing charges have reduced to 0.96%, which reflects the growth of the company and spreading fixed costs over a larger capital base and the tiered manager fee and the manager fee rate reducing for incremental investments as the company grows. Dividend cover for H1 2020 is 1.25x, and this has been adjusted to remove the cash benefit as scrip dividend take-up. Cash dividend cover with the benefit of scrip take-up is 1.28x. Cash received from the investments since after projects have made GBP 50 million of repayments of project-level debt across the portfolio, which represents 0.9x the dividend paid. And hence, dividend cover, if we were not making debt repayments, will be 2.2x. Slide 14 covers investment commitments. TRIG invested GBP 281 million in H1 2020, which was partially funded by share issuance in the period of GBP 120 million. At June 2020, TRIG has GBP 41 million of outstanding commitments to construction and wind farm projects being built by RES for TRIG at Solwaybank and Blary. TRIG has divested 2 stakes post period-end, realizing GBP 119 million, being the planned sell-down in the Merkur project to reduce TRIG's stake in that project from 36% to 25% and returning the Erstrask project to Enercon, exercising an option TRIG had to return the project once key milestones had been missed. As a reminder, TRIG invested in the Erstrask phase 1 project in early 2019 and expected to invest in phase 2 in 2020 once it had reached construction completion. Phase 2 has suffered a considerable delay in its construction, causing the project to miss milestones, which has relieved TRIG of its obligation to invest and provide a right to return phase 1. TRIG exercised the put option at the return of phase 1 completed post period end. TRIG did not take construction risk on this project and has now received the original investment back, with an uplift representing a good investment return for the project for our holding period. TRIG has GBP 50 million drawn on its revolving acquisition facility at the 30th of June, which has now been repaid from these disposals. TRIG expects to have a net GBP 30 million surplus cash balance to invest, allowing for the disposals, repayment of the acquisition facility and funding construction commitments. I'll now hand over to Chris to update you on TRIG's operational performance.

Thank you, Phil. Hello. My name is Chris Sweetman, TRIG's Operations Director, and I'm going to talk you through the operations for the period. In the first half of the year, we generated 2,141 gigawatt hours, so over 2.1 terawatt hours. This is a 50% increase over the same period in 2019. This increase is primarily due to the acquisition of 2 German offshore projects along with some very windy weather, which I shall come to shortly. Production is 9% over budget, mainly due to very high wind levels in Great Britain and Scandinavia in the first quarter of the year, which more than offset weaker second quarter wind speeds. Looking at the table of production, you can see the very good performance in 2 of our 3 largest regions, namely GB wind and Scandinavia. These variances to budget once again demonstrate the benefits of our diversification, with different regions performing well each period. GB and Scandinavia's outstanding first quarter performance ensured a positive reduction overall, particularly the large Jadraas wind farm in southern Sweden, delivering positive production variances in both quarters. Offshore's large Gode and Merkur assets in the German North Sea suffered below budget April and May, including a weeklong partially compensated good outage at Gode with a good operator [indiscernible] bought forward in August. In France, good availability and strong resource in the north was offset by shortfalls at southern sites. Ireland delivered on-budget production despite the good curtailments exacerbated by the lower electricity demand in Q2. Finally, solar and storage had very good variance in Q2, once again delivering a positive production variance. Now let's turn to weather on the next slide. This graph shows how the weighted average wind and the radiation varied across the period with respect to the long-term mean, that is weather in the period compared to the long-term average for the portfolio. You can see how the very good wind in February was a feature across the portfolio. The wind then eased towards April in most regions, apart from Sweden, shown in the yellow line, where the high winds continued, keeping the portfolio on budget. Solar radiation, shown in orange, crept up above average during this period, helping to offset some of the lower winds before most regions recovered in June. You can see significant monthly variability in each region relative to the long-term average. Looking at the solid bold line, which is the weighted average variation, the benefits of geographic diversification are clear, smoothing the regional performance. I will now pass you on to Jaz.

Thank you, Chris, and hello, everyone. I'm Jaz Bains, Group Risk and Investment Director at RES. Now turning to value enhancements. As TRIG's Operations Manager, RES preserves value by reducing downtime by utilizing proactive condition monitoring and strategic [indiscernible] whilst also continuously seeking out ways to maximize the production, reduce costs and optimize the achieved electricity price for the portfolio. RES assesses both commercial and technical value enhancements. These activities are supported by multiple specialist teams at RES with a comprehensive understanding of TRIG's assets. This depth of capability within RES gives TRIG an edge over its peer group. Some commercial enhancements over the period include: the prompt registration for National Grid's Optional Downward Flexibility Management scheme or ODFM. Essentially, this allows National Grid to request projects to be turned off if electricity generation exceeds demand, as happened over the May spring Bank holiday weekend when demand levels were low. Projects are then fully compensated for what they would have generated, thereby removing the risk of uncompensated curtailments whilst also supporting National Grid in ensuring stability of the grid network. We have also secured a capacity market contract for Blary Hill, providing an additional 15-year revenue stream for TRIG's first subsidy-free GB wind project and entered into new O&M contracts with RES at 3 French projects designed to deliver improved performance. Some of the technical enhancements include: turbine performance upgrades, increasing annual production and revenue; improved grid settings at a recently acquired asset following the identification of high electricity charges, reducing annual operating costs. Looking ahead, RES's technical team have been evaluating wake steering on wind farms. Wake steering involves making small adjustments to the direction of wind turbine faces to reduce the wake impact on downward turbine. This increases the overall production from the wind farm. RES is now progressing with a full-scale at Altahullion in Northern Ireland, which is expected to increase production by more than 1%. Once the results from the pilot are confirmed, this enhancement will be implemented across TRIG's wind portfolio. Now turning to sustainability. Our approach to responsible investment is reflected by our 4 main sustainability goals: firstly, to mitigate climate change, not just through investing in renewables and avoiding 640,000 tonnes of CO2 emissions, but also seek and to use green electricity on-site and in our offices by reducing electricity and water usage. Secondly, to positively impact local communities by engaging with those communities and providing financial support through community funds and local electricity discount schemes; thirdly, to preserve the natural environment. We have 12 active plans in place, ranging from [indiscernible] protection, habitat management to bat and bird boxes across many sites; and finally, to maintain ethics and integrity in governance, paying attention to all the activities and corporate oversight of each of the project companies; enhanced sustainability due diligence when acquiring assets and sustainability incorporated into managers' performance objectives. With the COVID-19 pandemic having a significant impact across all communities, our established community funds and deep relationships with our asset managers have placed us well to provide support. This has allowed TRIG through these community funds to channel emergency funding to groups supporting frontline workers, the isolated and most vulnerable people in local communities. The types of support provided ranges from collecting, shopping and medicines, funding for food banks, tablets for a primary school and the purchase and installation of a canopy for a primary school's play area. But we are also keen to provide additional support to our local communities during these difficult times, with an additional GBP 500,000 to be distributed to help address the COVID-19 impact on the local communities around our sites, bringing the total community contribution to over GBP 1.4 million in the year. In addition, both of TRIG's managers have also significantly increased their charitable support to alleviate the impact of COVID-19 whilst also focusing on the health and well-being of their staff. I'll now pass it on to Richard to go through the portfolio and the market.

Thank you, Chris and Jaz. Before talking about market drivers and opportunity, I'll pause to look at the current portfolio, which is set out on Page 21. We have greater than 70 projects, 1.5 gigawatt of net capacity. And you can see on the pie, no asset is larger than 10% of the portfolio. This is important when a critical component can impact the whole site such as the switchgear or solar inverters or grid downtime. And the geographical spread also limits our exposure to individual regulatory and tax changes. And with the U.K. representing 56% of the portfolio, down from 72% 3 years ago; and Scotland, the most prolific region within the U.K. for wind at 28%, down from 39% 3 years ago, you can see how the geographical spread of the portfolio is improving. In terms of technology, we are now significant within the offshore sector with 3 projects representing just over 1/5 of the portfolio. Construction exposure is well managed and represents 9% of the portfolio. We have 3 projects in construction and expect 2 of them to complete in the second half of the year. Turning now to the opportunity going forward. As ever, policy forms a large part of the market backdrop. Broadly, 2 things are happening: firstly, recovery funds are being deployed to pull us out of recession. For example, the Next Generation EU recovery package and the European Green Deal, which is a growth strategy to make the economy sustainable; and secondly, more specific policy initiatives to get us to net zero by 2050 are being developed, and these policies are still very much in progress. In the EU, within the energy transition funding, we have a hydrogen strategy, putting green hydrogen central to decarbonizing the difficult areas of heavy transport, industrial processes, heating and importantly, for renewable [indiscernible] providing a store of electricity. Germany has also announced significant hydrogen development expenditure plans. In the U.K., there is also a discussion on green recovery funding, with what will be relatively modest amounts at this stage allocated to hydrogen and carbon capture storage. We may, however, see more policy developments as we move towards COP26, which the U.K. is hosting now in 2021. Slide 23 looks at capacity growth in TRIG's key markets. By working across several markets, we can be selective in the opportunities we pursue. Growth may be anticipated across all of our sectors, enabling us to continue to build a balanced portfolio. And we sometimes get questions about the availability of subsidies for new projects going forward. We see this as still being a very healthy market. And to illustrate this, we have segmented this slide on market growth between those markets which are largely subsidized with the tiles in blue and those which are largely unsubsidized, shown in green, and the markets which are currently predominantly subsidized. Notably, offshore wind in U.K., offshore wind in Germany and onshore wind in France are not showing any significant signs of moving away from this model. And we expect them to continue to provide good deal flow, enabling us to maintain a balanced revenue mix. We also expect more power price hedging and corporate offtakes at fixed prices to give alternatives for enhancing revenue visibility. And we anticipate overall a market size of about EUR 20 billion per annum of investment. So now final slide, our concluding remarks. We are pleased to be reporting a solid set of results under these challenging circumstances. The impact of lower power prices with the lack of economic activity impacting demand is significant and has led to a reduction in NAV after the dividend has been paid. But we've been able to mitigate the reduction. We have had generation well above budget, overcoming things such as movement restrictions, supply chain constraints and grid limitations. We've also had continuing and increasing demand for the asset class as well as other value enhancements, including reduced O&M costs. Uncertainties on the depth of this recession and the pandemic, of course, remain. But nevertheless, we are pleased to be able to reaffirm our 2020 dividend, which is important to our shareholders. In terms of outlook, renewables remain central to decarbonization, providing a good supply of projects in the U.K. and Europe. Electrification of energy uses such as EVs with potentially green hydrogen being developed adds to demand and to flexibility on energy usage. Our broader outlook also enables selectivity on acquisitions. I have previously commented on newcomers within the renewables market increasing the weight of money hunting assets. And adding to this, we are now seeing strategic acquisitions. As before, pricing discipline must be foremost. We continue to seek value based on TRIG and InfraRed's strong track record for delivery, combined with being a cash buyer. And finally, the portfolio is, we believe, soundly constructed and performing at a high level, so well set up for the future. And that concludes the presentation and we thank you for listening.

Okay, thank you. We now have -- we now turn to some questions. We have a couple of questions that have come in. I think the first question, I'll direct to you, Phil, is a question on cash. The question is, what is the current cash position?

Thank you. If we look at slide -- hang on, which one is it? Slide 14. We've got something on this. So at the -- June, we had GBP 24 million of cash and GBP 50 million drawn. Since then, we have sold down and put back Erstrask and received GBP 119 million back from those. So the GBP 24 million plus the GBP 119 million and a bit of cash up from projects during July, less the GBP 50 million gets us to about GBP 100 million in cash right now or about GBP 100 million then around GBP 30 million or a bit less than GBP 30 million we would need for the dividend at the end of September. So we're around GBP 70 million surplus. We've got GBP 40 million of commitments, so we've got about a GBP 30 million net cash surplus after commitments for the moment.

Thank you, Phil. Probably the next question also to you. And it's referencing the dividend cover. And of course, we've already said the dividend cover of H1, 1.25. It's asking, what do we think the broad split would be between H1 and H2? And any indication on the dividend cover for the full year?

So H1's cash is always a little stronger than H2, although it is not -- it is relatively smooth. In H2, we do benefit from U.K. [indiscernible] recycle receipts as well. And what we tend to find is we have a stronger cover in H1 than we do for the full year. So last year, we had 1.3 for the half year, 1.2 for the full year. And this time, we've got 1.25 for the half year. And so I'd expect that we -- if things carry on as they are and consistent with our forecast, we might be landing in the 1.1 to 1.15 range at the full year, but we have to see our generation and power prices turn out for the rest of the year. We are -- we do benefit [indiscernible] a lot of fixes in place and the current Board is looking good. So we're optimistic, but who knows what the next few months might bring.

Thank you. And then one more question we have is on power prices. The question is, when do we expect the demand and pricing for electricity to recover? If I take this one myself, I think it would be worth us referencing to Page 11 on the presentation. And on Page 11, we have the graph of the power curve as we now forecast it and you can compare it. That's in the blue on the top right there, and you can compare it with the gray which was the curve at the beginning of the year. And you can see there sort of 4, 5 years is really the period we're expecting for prices to recover. So this is a reflection of 2 things: obviously, general economic activity and specifically demand for power, but also demand for gas because obviously, stocks of gas will have built up during the economic downturn. And those need also to be used up before we can realistically expect price recovery. So 4 to 5 years is probably the answer to that question. I'm just pausing just for a minute to see if there are any more questions coming in. Yes. There's a question on inflation assumptions for the U.K. wondering about the appropriateness of the 2.75% inflation, given RPI is only 1.1% in June. Phil, would you like to give a view on that?

Yes. We did consider whenever we adjusted that. And -- but we know that the long-term projections for RPI are above 2.75%, and indeed, you can fix in RPI. You could -- above that now, I think about 3.10% or so. And so we took the view that the overall balance was about right. We've also recently had an independent valuation done, and they said that they were seeing people with assumptions of 2.75% or 3%, quite often at 3%. So I think on that front, we're properly pretty cautious versus many others. But I agree that inflation for this year is likely to undershoot. But when we look at the impact of that, wasn't very significant in the overall valuation. I've answered that question. Was there another question coming up?

Well, yes, one on pipeline, which I will take. Pipeline has been impacted. Do you expect a strong reappearance of pipeline in H2? And is pricing too high for TRIG to do acquisitions? Well, first point there, yes, pipeline slowed up very much in Q2, but it's still deals entering into the process and we do expect pipeline. We're already seeing it picking up, so we do expect decent pipeline to come through in the second half of the year. Is pricing too high for TRIG to do acquisitions? And this is a question which comes up and it's a perfectly fair question to ask now. The enthusiasm for Renewables Infrastructure is certainly keen, and we have seen some very solid pricing, high pricing even in the first half of the year, despite my comment on the deal flow still evidence of that. So selectivity is very important. We are, in particular, able to look across a broad range of countries and asset types in order to select the best opportunities to go for. But yes, discipline is necessary, but we still do expect to be able to find value within acquisitions. The next question is asking for a NAV reconciliation from the 115p to the 113p. So probably over to you again there, Phil.

That's okay, yes. Okay. So power prices, we took quite a significant value reduction for power prices and we think that our resulting assumptions are pretty cautious. We've published those assumptions so that they can be compared if folks want to see exactly what they are, and that's taking 7p of valuation. We then benefited from foreign exchange, a bit -- a little over 1p. And we've reduced discount rates, which is almost 2p. So the combination of FX and foreign exchange, 3p together -- sorry foreign exchange and discount rates together, 3p, power prices 7p down so that gets to the minus 4p. What's the 2p missing? It's our performance. The balance of the portfolio return bar is larger than the unwind of the discount rate. This is due to good portfolio management activities, enhancements such as reducing O&M costs on wind farms, on renewals and reducing PPA discounts being incurred. And also, we had very good generation in H1, good availability, and that has outperformed, in cash terms, the downside from power prices. And our power price down cycle wasn't as large as it might have been because we had a lot of fixing in place that we benefited from. So 2p of our performance as well.

Okay. Next question is on curtailment and I get to direct this to Chris. The question is, what impact did curtailment across the portfolio have and, in particular, impact through onto the dividend cover in the period?

Good curtailment arose in 2 of the regions, most significantly in the German offshore region and Ireland. In Germany, it was caused by a couple of reasons. Some -- there's an outage on the offshore substation, and there's also been some negative pricing, which has caused some curtailment. Approximately 3/4 of the German curtailment has been fully compensated. Then turning to Ireland. Curtailment there has been higher than normal. That's due to the lower demand, coupled with a strong wind. That's substantially uncompensated. Taken together, the uncompensated curtailment equates to approximately 2% of the actual generation production. So it's sort of the order of GBP 3.5 million worth of lost revenue. I couldn't tell you what that is in dividend cover though, I'm afraid. I don't know, Phil, if you want to comment on that.

I wasn't paying attention, obviously. [indiscernible] look at the next question.

The GBP 3.5 million impact, what that equates to in terms of dividend cover?

Not an awful lot. And I guess, there are quite a lot of moving parts, but of course, if that was on its own, then I guess that would be -- or getting towards 5 bps, a bit less than 5 bps because the dividend denominator is [ 55 ] or something, depending whether or not you're including scrip or not including scrip. But I think that's quite a few moving parts. I mean, overall, the curtailment loss was very small.

Very good. Thank you. Next question for Jaz. It's about power purchase agreement structures. Can you give some color on the PPA structures that you have in place over the longer term and how this may evolve?

Sorry, I wasn't -- I was muted, sorry. Thank you. Yes, so we have a range of PPA structures. We have the typical utility-style PPA structure, which are a discount to market price. What we have been doing is trying to move away from that and trying a bit more control of our PPA structures. We set up a portfolio of 4 projects with Shell to look at how we could fix prices out up to 2 or 3 years and try and move to this structure on the longer term, be in a bit more control of how to decide to do regular fixes. And so we would like to evolve a utility base into that structure. What we have seen through that structure, where we have been able to fix ahead on a regular basis, we've actually achieved a higher price for that portfolio than the average day ahead by about GBP 16 a megawatt-hour. So we see that evolving. We also probably see more corporate PPAs coming to market. And being 100% owners of a lot of the U.K. projects, we could then look to be more flexible. And this structure that I'm talking about allows us to bring in corporate proportion of that generation. So I think it's going to be, for us, a mixture of aggregating some corporates to provide fixed pricing in [indiscernible] the longer term, but also moving away from the traditional utility-type PPAs to be able to go into the market and fix ourselves on a regular basis to stabilize our income.

Very good. Thank you, Jaz. We have a question on hydrogen. Please elaborate further on hydrogen-related opportunities. I suppose we should start by saying that TRIG is something that looks for sort of tried and tested low-risk technologies, so we're in the wind sector, the solar sector. We look also at battery storage. And hydrogen, although it's been around for a long term in terms of electrolysis, it's still very much emerging in terms of quite how policy is going to develop and quite how subsidies are going to develop to encourage green hydrogen, which requires electrolysis to be developed. So really, we have to watch that and see how that's developed. The pleasing thing, obviously, is that the European government and also actually, the German government are putting this as a significant element of their strategies to get to 0 carbon. And the reason we like that is hydrogen acts as a storage of electricity. So we begin to address some of the problems that can be caused when supply of electricity that is mismatched with demand. So I think the reason really that we are referencing hydrogen at this point is because we can see, as we look forward, how do we balance the grid, and we can see hydrogen perhaps with the attention that the European Union and Germany are giving it, can become part of the solution to matching the supply from our renewable energy plants and the demand for electricity. I hope that helps. We can probably talk a long time on that general subject. I think that brings -- let me just check. Yes, I think that brings to the end of questions. So look, our thanks from the whole team here looking after TRIG to all of you for your attention and your many questions. I'll now draw things to a close. So thank you again. The webinar now ends.