Foresight Solar Fund is seeking shareholder approval to amend the company’s investment policy to invest in grid batteries located with solar.
The company’s board of directors and investment manager intend to allow for up to 10% of the Foresight Solar’s gross asset value (GAV), at the time of investment, to be invested into utility-scale battery storage system opportunities, the majority of which are planned to be located adjacent to the company's existing solar sites.
Since launching eight years ago Foresight Solar has acquired 58 ground based solar power plants, 50 of which are in the UK, and has paid all its target dividends to date.
During this period of time, the renewable technology markets in which it operates have, experienced a continuous period of growth, supported by worldwide commitments to decarbonise and decreasing solar installation costs.
This trend is expected to create an attractive environment for further investment in solar power plants in the UK and internationally, either through renewable energy support mechanisms or, increasingly, on a subsidy-free basis, the fund stated.
The continued growth in renewable energy generation is also expected to create a requirement for greater system flexibility as energy systems transition from a model of centralised generation and transmission to more flexible and decentralised systems.
“Battery storage systems are expected to have a significant role in the energy transition process, with the Company’s existing portfolio of operational solar power plants offering utility scale BSS co-location opportunities subject to available grid connection capacity and existing land lease agreements,” stated Foresight Solar.
The company will shortly publish a circular which sets out the background to and reasons for the proposed change to the investment policy.
The following benefits for shareholders potentially include enabling increased scale, diversification and operating efficiencies to the company’s portfolio and allowing it to continue to deploy funds in the company's core UK market through BSS acquisitions, where possible without having to participate in competitive third-party sales processes.
As well as diversifying the base of Foresight Solar’s renewable technologies grid battery investments will provide access to “asset level distributions within a short-period following investments”.