Annual Report
For the year ended 31 December 2023
G R E E N C O A T
U K W I N D
Summary 01
Chairman’s Statement 02
Investment Manager’s Report 05
Strategic Report 19
Board of Directors 38
Report of the Directors 42
Directors’ Remuneration Report 45
Statement of Directors’ Responsibilities 49
Corporate Governance Report 50
Audit Committee Report 56
Independent Auditor’s Report 60
Financial Statements 68
Notes to the Financial Statements 74
Company Information 103
Supplementary Information 104
EU SFDR Disclosures 105
Defined Terms 124
Alternative Performance Measures 127
Cautionary Statement 129
Contents
G R E E N C O A T
U K W I N D
All capitalised terms are defined in the list of defined terms on pages 124 to 126 unless separately defined.
Summary
Greencoat UK Wind PLC is the leading listed renewable infrastructure fund, invested in UK wind farms. The
Company’s aim is to provide investors with an annual dividend that increases in line with RPI inflation while
preserving the capital value of its investment portfolio in the long term on a real basis through reinvestment of
excess cash flow.
The Company provides investors with the opportunity to participate directly in the ownership of UK wind farms,
so increasing the resources and capital dedicated to the deployment of renewable energy and the reduction of
greenhouse gas emissions.
Highlights
• The Group’s investments generated 4,743GWh of renewable electricity.
• Net cash generation (Group and wind farm SPVs) was £405.5 million.
• Investment in Dalquhandy, London Array, South Kyle and Kype Muir Extension wind farms increased the
portfolio to 49 operating wind farm investments and net generating capacity to 2,007MW as at
31 December 2023.
• The target dividend for the year was 8.76 pence per share. With the increased dividend for the final quarter
of 3.43 pence per share, declared dividends for 2023 were 10 pence per share.
• The target dividend with respect to 2024 is also 10 pence per share, an increase of 14.2 per cent above the
target dividend for 2023, significantly above December’s RPI of 5.2 per cent.
• Aggregate Group Debt was £2,375 million as at 31 December 2023, equivalent to 38 per cent of GAV.
Key Metrics
As at As at
31 December 2023 31 December 2022
Market capitalisation £3,502.9 million £3,523.5 million
Share price 151.5 pence 152.0 pence
Dividends with respect to the year £231.4 million £178.9 million
Dividends with respect to the year per share 10 pence 7.72 pence
GAV* £6,169.0 million £5,652.7 million
NAV* £3,794.0 million £3,873.2 million
NAV per share* 164.1 pence 167.1 pence
TSR* 5.4 per cent 13.5 per cent
CO
2
emissions avoided per annum* 2.5 million tonnes 2.0 million tonnes
Homes powered per annum* 2.3 million homes 1.8 million homes
Funds invested in community projects in the year £4.4 million £4.0 million
* Alternative Performance Measures as defined on page 127.
Defining Characteristics
Greencoat UK Wind PLC was designed for investors from first principles to be simple, transparent and low risk.
• The Group is invested solely in UK wind farms.
• Wind is the most mature and largest scale renewable technology.
• The UK has a long established regulatory regime, high wind resource and £100 billion worth of wind farms
in operation.
• The Group is wholly independent and thus avoids conflicts of interests in its investment decisions.
• The independent Board is actively involved in key investment decisions and in monitoring the efficient
operation of the assets, and works in conjunction with the most experienced investment management team
in the sector.
• Low gearing is important to ensure a high level of cash flow stability and higher tolerance to downside
sensitivities.
• The Group invests in sterling assets and thus does not incur material currency risk.
G R E E N C O A T
U K W I N D
01
I am pleased to present the Annual Report of
Greencoat UK Wind PLC for the year ended
31 December 2023.
Performance
My first annual statement as Chairman comes in the
year of the Company’s 10th anniversary as a listed
company and it is pleasing that this year has seen a
further demonstration of the Company’s resilience
despite rising interest rates, volatile power prices and
broader turmoil in global financial markets.
With the final dividend for the year, our investors will
have received over £1 billion of dividends since listing.
The Company has consistently generated excess cash
flow beyond its dividend and has now reinvested
£906 million. Our net generating capacity now exceeds
2GW and last year we generated 4.7TWh of renewable
electricity, approximately 1.5 per cent of the UK’s
electricity demand.
Net cash generated by the Group and wind farm SPVs
was £406 million, providing cover of 2.1x on
£197 million of dividends paid in the year.
By the end of 2023, the portfolio was generating
sufficient electricity to power 2.3 million homes and
avoiding CO
2
emissions of approximately 2.5 million
tonnes per annum through the displacement of
thermal generation.
Dividends and Returns
The target dividend for the year was 8.76 pence per
share. With the increased dividend for the final quarter
of 3.43 pence per share, to be paid on 29 February
2024, the declared dividends for 2023 will be 10 pence
per share. With our continuing strong cash flow and
dividend cover, we can confidently target a dividend
of 10 pence per share with respect to 2024, an increase
of 14.2 per cent above the target dividend for 2023,
significantly above December’s RPI of 5.2 per cent.
The Total Shareholder Return for the year was 5.4 per
cent. NAV decreased by 3 pence per share to
164.1 pence per share, including the effects of a
material increase in the portfolio discount rate. Since
listing, NAV per share has increased by significantly
more than RPI, as can be seen on the chart on page 17.
The Company’s aim remains to provide investors with
annual dividends that increase in line with RPI inflation.
In line with the higher interest rate environment, the
Company has continued to increase its discount rate
and thus returns to investors. The forecast 10 per cent
return to investors on NAV (net of all costs) includes
reinvestment of excess cash generation (dividend
cover) in addition to the dividends paid. Given the
nature of the Company’s business, we believe that this
return compares well with the 10 year gilt rate which
was 4.1 per cent immediately prior to the date of
this report.
Since listing, aggregate historical dividend cover of
2.0x has enabled the Company to reinvest £906 million
of excess cash generation. Given this greater
reinvestment and higher return, the Company has
been and is able to grow NAV per share significantly
more than its peers in addition to generating a higher
dividend yield.
Investment
During the year we invested £821 million into
Dalquhandy, London Array, South Kyle and Kype Muir
Extension wind farms, increasing net generating
capacity by 397MW.
Outlook and Strategy
Wind continues to be the most mature and widely
deployed renewable energy technology in the UK (30
per cent of GB electricity generation in 2023) with an
offshore wind target of 50GW for 2030 being an
important Government target in the delivery of its
2050 net zero emissions commitment. The Company
supports the UK Government’s commitment to achieve
Net Zero by 2050 through acquiring operational wind
farms and thereby allowing developers and utilities to
recycle their capital into further renewable energy
projects, and by demonstrating the attractive long
term returns in the industry through our prudent
management of wind farms, thereby reducing the cost
of capital.
Our Investment Objective has remained unchanged
over the last 11 years since listing: to provide
shareholders with an annual dividend that increases in
line with RPI inflation while preserving the capital value
of the investment portfolio in real terms. This has been
more than achieved through a focused strategy of
investing only in wind farms and only in the UK while
maintaining a balanced exposure to power prices. Our
intention remains to adhere to this core strategy.
Chairman’s Statement
Greencoat UK Wind PLC Annual Report for the year ended 31 December 2023
02
03
G R E E N C O A T
U K W I N D
Outlook and Strategy continued
The Company is investing in a mature and growing
market, and the Board believes that there should
continue to be further opportunities for investments
that are beneficial to shareholders.
The Company regularly reviews its capital allocation
policy by considering a range of options to optimise
returns to shareholders. In October 2023, as part of
this consideration, the Company announced an
increase in its annual dividend target for 2024 to
10 pence per share, an increase beyond December’s
RPI of 5.2 per cent. The dividend with respect to the
final quarter of the year will be 3.43 pence per share,
taking the annual dividend for 2023 to 10 pence
per share.
The Company also announced a £100 million share
buyback programme. The Company has bought back
14 million shares to date at an average cost of
142.1 pence per share.
The Company maintains a disciplined approach to
acquisitions, only investing when it is considered to be
in the interests of shareholders to do so. With the
Company’s share price currently trading at a discount
to NAV, the alternatives for capital allocation warrant
significant consideration.
We will also continue to look at opportunistic
disposals.
Through strong cash flow and dividend cover, coupled
with our disciplined approach, we are confident in our
ability to continue to meet the objectives of dividend
growth in line with RPI and capital preservation in
real terms.
Health and Safety and the Environment
As a responsible investor in operating wind farms, the
Company takes its health and safety responsibilities
very seriously. We work with our Investment
Manager to promote the highest standard of health,
safety and environmental management practices in
managing our portfolio of investments. Detailed key
performance indicators and the results of audits are
regularly reviewed by the Board and action taken
where necessary. We continue to monitor the
standards maintained by the operators of our
wind farm investments, to ensure that these are at least
in line with the wider industry, while seeking
continuous improvement.
Climate Change and Sustainability
As a Company investing in wind farms, our strategy
and activities naturally make a positive contribution
towards the worldwide goal of achieving a net zero
carbon emissions economy and limiting global
warming to 1.5°C. The Company also considers the
recommendations of the Taskforce for Climate-related
Financial Disclosures (“TCFD”). Detailed disclosures
can be found in the Strategic Report on
pages 29 to 37.
The Company qualified under Article 9 of the EU
Sustainable Financial Disclosure Regulation (“SFDR”)
in 2023. The Company’s Investment Policy supports
the environmental objective of climate change
mitigation that helps to facilitate the transition to a low
carbon economy. The Company will continue to
provide periodic reporting as required under Article 9
of the SFDR in its Annual Report.
In 2023, the Financial Conduct Authority published its
final rules regarding Sustainability Disclosure
Requirements (“SDR”). The Company, with support
from the Investment Manager, will consider the rules
and work to meet any obligations of the SDR in the
coming financial year.
The Board, Governance and Executive Management
At the AGM on 28 April 2023, Shonaid Jemmett-Page
retired from the Board and Nick Winser assumed the
role of Senior Independent Director. On behalf of the
whole Board, I would like to thank Shonaid for her
excellent contribution, first as Chairman of the Audit
Committee and then as Chairman of the Board. With
Shonaid being the last Director who was with the
Company at IPO, the succession of the whole Board
has now taken place. I am delighted to have taken over
as Chairman and look forward to the Company
continuing to deliver shareholder value.
On 1 May 2023, Jim Smith joined the Board bringing
his extensive experience from the electricity industry
including in offshore wind asset management, notably
leading SSE’s renewable business. Jim will oversee the
performance of the Investment Manager’s asset
management activities.
On 1 March 2024, Abigail Rotheroe will join the Board.
Abigail has extensive experience in the investment and
asset management industry, with a focus on ESG.
Abigail’s appointment broadens the experience of the
Board at a time when ESG considerations are
becoming a major factor in the sustainability of the
investment industry.
At the forthcoming AGM, Martin McAdam will retire
from the Board and on behalf of the Board, I would
also like to thank him for his services as a non-executive
Director of the Company since his appointment in 2015
and for his wisdom and insight.
The annual internal evaluation of the Board raised no
significant issues. The Group’s governance is further
described in the Corporate Governance Report on
pages 50 to 55.
Chairman’s Statement continued
Corriegarth
Chairman’s Statement continued
The Board, Governance and Executive Management
continued
In December 2023, we announced that Laurence
Fumagalli will be succeeded by Matt Ridley as one of
the investment managers, partnering Stephen Lilley.
The Board would like to thank Laurence for his vision
and unwavering commitment to list, manage and grow
the Company and look forward to continuing to work
alongside Stephen and Matt as the Company
continues to develop.
Annual General Meeting
Our AGM will take place at 2pm on 24 April 2024 at
the office of the Investment Manager.
Details of the formal business of the meeting are set
out in a separate circular which is sent to shareholders
with the Annual Report.
Lucinda Riches C.B.E.
Chairman
28 February 2024
Greencoat UK Wind PLC Annual Report for the year ended 31 December 2023
04
05
G R E E N C O A T
U K W I N D
The Investment Manager
The investment management team covers all the skills and experience required to manage the Group: investment,
ownership, finance and operation. The Investment Manager is authorised and regulated by the Financial Conduct
Authority and is a full scope UK AIFM.
Since the Company’s IPO in March 2013, the investment management team has been led by Stephen Lilley and
Laurence Fumagalli.
In December 2023, the Company announced Laurence Fumagalli’s intention to step down from his role and that
Matt Ridley will succeed Laurence Fumagalli leading the investment management team alongside Stephen Lilley
from 1 March 2024.
Matt brings a broad range of renewable investment experience across both public and private investment vehicles
with a primary focus on wind. Prior to his appointment, Matt had led the private markets group of the Investment
Manager.
The other key figures in the Investment Manager’s team dedicated to managing the Company remain unchanged,
and the majority of the team have been involved in the management of the Group for over 5 years. The investment
management team has breadth and depth, with core competencies across investment, asset management and
finance, and is supported by the 130 strong wider team within the Investment Manager.
Investment Manager’s Report
Investment Portfolio
As at 31 December 2023, the Group owned investments in a diversified portfolio of 49 operating UK wind farms
totalling 2,007MW.
Investment Manager’s Report continued
06
Greencoat UK Wind PLC Annual Report for the year ended 31 December 2023
14
1 Andershaw
2 Bicker Fen
3 Bin Mountain
4 Bishopthorpe
5 Braes of Doune
6 Brockaghboy
7 Burbo Bank Extension
8 Carcant
9 Church Hill
10 Clyde
11 Corriegarth
12 Cotton Farm
13 Crighshane
14 Dalquhandy
15 Deeping St. Nicholas
16 Douglas West
17 Drone Hill
18 Dunmaglass
19 Earl’s Hall Farm
20 Glass Moor
21 Glen Kyllachy
22 Hornsea 1
23 Humber Gateway
24 Kildrummy
25 Kype Muir Extension
26 Langhope Rig
27 Lindhurst
28 Little Cheyne Court
29 London Array
30 Maerdy
31 Middlemoor
32 North Hoyle
33 North Rhins
34 Red House
35 Red Tile
36 Rhyl Flats
37 Screggagh
38 Sixpenny Wood
39 Slieve Divena
40 Slieve Divena 2
41 South Kyle
42 Stronelairg
43 Stroupster
44 Tappaghan
45 Tom nan Clach
46 Twentyshilling
47 Walney
48 Windy Rig
49 Yelvertoft
27
31
8
5
12
19
28
29
25
41
2
15
20
34
35
39
3
24
11
30
7
45
17
33
38
49
43
37
26
4
44
9
13
6
21
42
40
47
23
22
36
32
18
16
46
48
1
10
07
G R E E N C O A T
U K W I N D
Investment Manager’s Report continued
Investment Portfolio continued
Breakdown of operating portfolio by value as at 31 December 2023:
Onshore/Offshore Geography
Asset Age Turbine Manufacturer
Assets
Hornsea 1 (16%)
London Array (8%)
Clyde (7%)
Stronelairg (5%)
Burbo Bank Extension (3%)
Other (32%)
Humber Gateway (9%)
Walney (7%)
South Kyle (6%)
Corriegarth (4%)
Brockaghboy (3%)
< 5 years (31%)
> 10 years (31%)
5-10 years (38%)
Siemens (39%)
Vestas (31%)
Nordex (14%)
Enercon (8%)
Senvion (4%)
GE (4%)
Onshore (55%)
Offshore (45%)
England (49%)
Scotland (41%)
Northern Ireland (7%)
Wales (3%)
Investment Manager’s Report continued
08
Greencoat UK Wind PLC Annual Report for the year ended 31 December 2023
Asset Management
The Group operates a sizeable and diverse portfolio of 49 assets with net generating capacity in excess of 2GW.
The Investment Manager has an experienced and specialist asset management team, which has expanded
considerably as the portfolio has grown. The team focusses on the safe and optimal performance of the Group’s
assets, as well as ensuring the delivery of the Company’s long term investment case. The team continues to move
forward several key initiatives to optimise the performance of the Group’s assets, creating long term value for
shareholders. Initiatives include, for instance, lease extensions, turbine performance upgrades, and revenue and
operating cost optimisation.
Operating and Financial Performance
Portfolio generation in the year was 4,743GWh, 13 per cent below budget owing to low wind.
The following table shows wind speed and portfolio generation since IPO:
UK weighted average wind speed Generation
(variation to long term mean) (variation to budget)
2013 (adjusted) +3% +8%
2014 -2% -3%
2015 +5% +8%
2016 -6% -6%
2017 -1% 0%
2018 -4% -6%
2019 -8% -11%
2020 +2% -3%
2021 -12% -20%
2022 -5% -5%
2023 -7% -13%
Variation to budget lies within reasonable statistical parameters. The annual standard deviation of wind speed is
6 per cent and the annual standard deviation of generation is 10 per cent (less than 2 per cent over 30 years).
Net cash generated by the Group and wind farm SPVs was £405.5 million and dividend cover for the year
was 2.1x.
For the year ended
31 December 2023
Group and wind farm SPV cash flows £’000
Net cash generation
(1)
405,510
Dividends paid (197,043)
Acquisitions (820,925)
Acquisition costs (2,742)
Share buybacks (9,439)
Share buyback costs (56)
Net amounts drawn under debt facilities 690,000
Upfront finance costs (4,939)
Movement in cash (Group and wind farm SPVs) 60,366
Opening cash balance (Group and wind farm SPVs) 160,851
Closing cash balance (Group and wind farm SPVs)
(2)
221,217
Net cash generation 405,510
Dividends 197,043
Dividend cover 2.1x
(1)
Alternative Performance Measure defined with comparative information on page 127.
(2)
Includes £40,119k security cash deposits recognised as a receivable in note 11 to the financial statements.
09
G R E E N C O A T
U K W I N D
Operating and Financial Performance continued
The following tables provide further detail in relation to net cash generation of £405.5 million:
For the year ended
31 December 2023
Net Cash Generation – Breakdown
(1)
£’000
Revenue 785,608
Operating expenses (198,611)
Tax (62,661)
SPV level debt interest (20,044)
SPV level debt amortisation (47,129)
Other 28,133
Wind farm cash flow 485,296
Management fee (24,993)
Operating expenses (2,564)
Ongoing finance costs (62,834)
Other 5,013
Group cash flow (85,378)
VAT (Group and wind farm SPVs) 5,592
Net cash generation 405,510
(1)
Alternative Performance Measure defined with comparative information on page 127.
For the year ended
31 December 2023
Net Cash Generation – Reconciliation to Net Cash Flows from Operating Activities
(1)
£’000
Net cash flows from operating activities
(2)
359,801
Movement in cash balances of wind farm SPVs 18,225
Repayment of shareholder loan investment
(2)
50,199
Finance costs
(2)
(67,773)
Upfront finance costs
(3)
4,939
Placing of security cash deposits
(4)
40,119
Net cash generation 405,510
(1)
Alternative Performance Measure defined with comparative information on page 127.
(2)
Consolidated Statement of Cash Flows.
(3)
£4,350k facility arrangement fees plus £589k professional fees per note 13 to the financial statements.
(4)
Note 11 to the financial statements.
Investment Manager’s Report continued
Investment Manager’s Report continued
10
Greencoat UK Wind PLC Annual Report for the year ended 31 December 2023
Investment and Gearing
The following table lists investments in the year:
£m
Dalquhandy 51.5
London Array 443.6
South Kyle 315.9
Kype Muir Extension
(1)
9.9
Total 820.9
(1)
In addition to £39.4 million invested as at 31 December 2022.
All of the above investments were materially accretive to NAV (£174.2 million in total). The Investment Manager
believes that there should continue to be further opportunities for investments that are beneficial to shareholders.
The Company also continues to review its capital allocation, with 14 million shares having been repurchased as
of 27 February 2024 as part of its £100 million buyback programme announced in October 2023, at an average
cost of 142.1 pence per share. The Company may also use excess cash generation to return capital to shareholders
through further increased dividends, or for the repayment of debt.
As at 31 December 2023, Aggregate Group Debt was £2,375 million, comprising £1,390 million of term debt at
Company level, £400 million drawn under the Company’s revolving credit facility plus £585 million being the
Group’s share of limited recourse debt in Hornsea 1. Cash balances (Group and wind farm SPVs) as at
31 December 2023 were £221.2 million (including £40.1 million of security cash deposits).
Gearing as at 31 December 2023 was 38 per cent of GAV, with a weighted cost of debt of 4.59 per cent across
a spread of maturities (October 2024 to March 2036):
Loan principal Loan margin Swap rate/SONIA All-in rate
Facility Maturity date £’000 %%%
RCF 29 Oct 24 400,000 1.75 5.20
(1)
6.95
NAB 4 Nov 24 50,000 1.15 1.06 2.21
CBA 14 Nov 24 50,000 1.35 0.81 2.16
CBA 6 Mar 25 50,000 1.55 1.53 3.08
CIBC 3 Nov 25 100,000 1.50 1.51 3.01
ANZ 3 May 26 75,000 1.45 5.92 7.37
NAB 1 Nov 26 75,000 1.50 1.60 3.10
NAB 1 Nov 26 25,000 1.50 0.84 2.34
CIBC 14 Nov 26 100,000 1.40 0.81 2.21
Lloyds 9 May 27 150,000 1.60 5.65 7.25
CBA 4 Nov 27 100,000 1.60 1.37 2.97
ABN AMRO 2 May 28 100,000 1.75 5.04 6.79
ANZ 3 May 28 75,000 1.75 5.38 7.13
Barclays 3 May 28 100,000 1.75 4.99 6.74
AXA 31 Jan 30 125,000 ——3.03
AXA 31 Jan 30 75,000 1.70 1.45 3.15
AXA 28 Apr 31 25,000 ——6.43
AXA 28 Apr 31 115,000 1.80 5.20
(1)
7.00
Hornsea 1 31 Mar 36 585,000 ——2.60
2,375,000 Weighted average 4.59
(1)
Facility pays SONIA as variable rate.
In June 2023, the Investment Manager led a placing of £640 million of new term loan facilities with 5 lenders, 2 of
which were new lending relationships to the Company. This included the refinancing of £150 million of term debt
tranches maturing in late 2023. The Company’s revolving credit facility is due to mature in October 2024 in
addition to £150 million of term loan tranches by March 2025. The Investment Manager has commenced
discussions with existing and new lenders to refinance the near-maturing revolving credit facility and term debt
and has found significant appetite.
Net Asset Value
The following table sets out the movement in NAV from 31 December 2022 to 31 December 2023:
£’000 Pence per share
NAV as at 31 December 2022 3,873,228 167.1
Net cash generation 405,510 17.5
Dividend (197,043) (8.5)
Depreciation (118,742) (5.1)
Power price (278,137) (12.0)
Inflation 132,279 5.7
Discount rate (263,252) (11.4)
Accretive investments 174,228 7.5
Share buybacks (9,496) 0.1
Other
(1)
75,421 3.3
NAV as at 31 December 2023 3,793,997 164.1
(1)
Includes REGOs and wind farm SPV budget updates.
Reconciliation of Statutory Net Assets to Reported NAV
As at As at
31 December 2023 31 December 2022
£’000 £’000
Operating portfolio 5,964,343 5,458,334
Construction portfolio — 39,414
Cash (wind farm SPVs) 159,293 141,068
Fair value of investments
(1)
6,123,636 5,638,816
Cash (Group) 21,805 19,783
Other relevant assets/(liabilities) 23,556 (5,867)
GAV 6,168,997 5,652,732
Aggregate Group Debt
(1)
(2,375,000) (1,779,504)
NAV 3,793,997 3,873,228
Reconciling items ——
Statutory net assets 3,793,997 3,873,228
Shares in issue 2,312,131,799 2,318,089,989
NAV per share (pence) 164.1 167.1
(1)
Includes limited recourse debt of £585 million at Hornsea 1, not included in the Consolidated Statement of Financial Position.
11
G R E E N C O A T
U K W I N D
Investment Manager’s Report continued
Investment Manager’s Report continued
12
Greencoat UK Wind PLC Annual Report for the year ended 31 December 2023
Health and Safety and the Environment
Health and safety is of key importance to both the Company and the Investment Manager.
The Investment Manager is an active member of SafetyOn, the UK’s leading health and safety focused
organisation for the onshore wind industry. The Investment Manager also has its own health and safety forum,
chaired by Stephen Lilley, where best practice is discussed and key learnings from incidents across the industry
are shared.
During the year, routine health and safety audits were conducted across 14 sites by an independent consultant.
In addition, the Investment Manager undertook 73 safety walks. No material areas of concern were identified
from all audits and safety walks performed in the year.
The Company has continued to contribute to local community funds and to invest in a range of local
environmental and social projects. In addition, the Company is funding a £250,000 programme to advance
knowledge on blade recycling and repurposing.
As at 31 December 2023, the portfolio powers 2.3 million homes and avoids the emission of 2.5 million tonnes
of CO
2
per annum.
Power Price
Long term power price forecasts are provided by a leading market consultant, updated quarterly, and may be
adjusted by the Investment Manager where more conservative assumptions are considered appropriate. Short
term power price assumptions reflect the forward curve as at 29 December 2023.
A discount of 10-20 per cent is applied to power price assumptions in all years to reflect the fact that wind
generation typically captures a lower price than the base load power price. During the year, the portfolio captured
an average price of £89.03/MWh versus an average N2EX index price of £94.47/MWh (6 per cent discount).
In addition to the above capture discount, a further discount is applied to reflect the terms of each PPA. The
price of some PPAs is expressed as a percentage of a given price index, whereas other PPAs include a fixed
£/MWh discount to the price index. Other PPAs pay a fixed £/MWh price for power. The table on the following
page sets out the terms of each PPA.
London Array
13
G R E E N C O A T
U K W I N D
Power Price continued
Power ROC
Ownership Net Net ROC/ ROC Price Price
Wind Farm Stake MW GWh Offtaker Price Expiry MWh end date Offtaker (Buy Out) (Recycle) Expiry
Andershaw 100% 35.0 105.8 Statkraft £4.20/MWh fee 31-Dec-36 0.9 28-Feb-37 Statkraft 93.0% 92.0% 31-Dec-36
Bicker Fen 80% 21.3 44.3 EDF 93.5% 31-Mar-27 1.0 31-Jul-28 EDF 93.0% 100.0% 31-Mar-27
Bin Mountain 100% 9.0 23.4 SSE 95% + £3.00/MWh fee 31-Dec-27 1.0 31-Mar-27 SSE/E.On 90.0% 93.8% 31-Dec-27
Bishopthorpe 100% 16.4 50.6 Axpo 95.0% 31-May-37 1.0 28-Feb-37 Axpo 95.0% 95.0% 31-May-37
Braes of Doune 100% 72.0 167.8 Erova 98.8% 11-Jul-37 1.0 31-Mar-27 Total 98.5% 100.0% 31-Mar-27
Brockaghboy 100% 47.5 157.3 SSE 96% + £3.00/MWh fee 28-Feb-33 0.9 31-Jul-37 SSE/E.On 95.0% 95.0% 28-Feb-33
Burbo Bank Extension 15.7% 40.4 155.0 CFD £209.32/MWh + CPI 31-Mar-36 n/a n/a n/a n/a n/a n/a
Carcant 100% 6.0 17.1 Axpo 95.0% 31-Oct-30 1.0 30-Jun-30 Total/E.On 90.0% 98.8% 31-Mar-27
Church Hill 100% 18.4 37.1 Energia 86.0% 31-Jul-30 1.0 30-Apr-32 Energia 90.0% 90.0% 31-Jul-30
Clyde 28.2% 147.3 457.2 SSE 94.0% 31-Dec-31 1.0 10-Sep-33 SSE 93.0% 94.0% 31-Dec-31
Corriegarth 100% 69.5 216.2 Centrica £3.79/MWh fee 14-May-32 0.9 30-Sep-36 Centrica 95.0% 75.0% 14-May-32
Cotton Farm 100% 16.4 51.0 Sainsbury's £60/MWh fixed 08-Mar-28 1.0 31-Jan-33 Sainsbury's 94.0% 100.0% 08-Mar-28
Crighshane 100% 32.2 59.7 Energia 86.0% 31-Jul-30 1.0 31-May-32 Energia 90.0% 90.0% 31-Jul-30
Dalquhandy 100% 42.0 109.6 BT £65.60/MWh fixed 31-Dec-31 n/a n/a n/a n/a n/a n/a
for 80% volume
95.0% for 20% volume
Deeping St. Nicholas 80% 13.1 29.8 EDF 93.5% 31-Mar-27 1.0 31-Mar-27 EDF 93.0% 100.0% 31-Mar-27
Douglas West 100% 45.0 129.2 BT £60/MWh fixed 31-Dec-33 n/a n/a n/a n/a n/a n/a
Drone Hill 51.6% 14.8 30.3 Statkraft £4.55/MWh fee 31-Dec-38 1.0 29-Feb-32 Statkraft 90.0% 90.0% 31-Dec-38
Dunmaglass 35.5% 33.4 129.9 SSE 95.0% 31-Mar-24 0.9 30-Sep-36 SSE 95.0% 95.0% 31-Mar-24
Earl's Hall Farm 100% 10.3 31.9 Sainsbury's £60/MWh fixed 20-Mar-28 1.0 31-Jan-33 Sainsbury's 94.0% 100.0% 20-Mar-28
Glass Moor 80% 13.1 28.9 EDF 93.5% 31-Mar-27 1.0 31-Mar-27 EDF 93.0% 100.0% 31-Mar-27
Glen Kyllachy 100% 48.5 145.7 Tesco £42.49/MWh + CPI 31-Dec-37 n/a n/a n/a n/a n/a n/a
for 50% volume
£1.50/MWh fee
for 50% volume
Hornsea 1 12.5% 150.0 668.1 CFD £195.86/MWh + CPI 31-Mar-36 n/a n/a n/a n/a n/a n/a
Humber Gateway 37.8% 82.8 320.4 E.On 96.0% 31-Mar-35 2.0 30-Apr-35 E.On 98.5% 100.0% 31-Mar-35
Kildrummy 100% 18.4 55.6 Sainsbury's £60/MWh fixed 10-May-28 1.0 28-Feb-33 Sainsbury's 94.0% 100.0% 10-May-28
Kype Muir Extension 49.9% 33.5 110.9 SSE £54.49/MWh fixed + 31-Dec-37 n/a n/a n/a n/a n/a n/a
CPI for 200GWh
Langhope Rig 100% 16.0 47.1 Centrica £3.23/MWh fee 06-Jan-31 0.9 31-Mar-35 Centrica 95.0% 75.0% 06-Jan-31
Lindhurst 49% 4.4 11.5 RWE 90.0% 08-Nov-28 1.0 30-Sep-30 RWE 90.0% 90.0% 08-Nov-28
Little Cheyne Court 41% 24.5 61.0 RWE 90.0% 31-Dec-27 1.0 30-Nov-28 RWE 90.0% 90.0% 31-Dec-27
London Array 13.7% 86.4 301.3 Orsted £75/MWh fixed 31-Dec-25 2.0 31-Dec-32 Orsted 95.0% 100.0% 31-Dec-25
Maerdy 100% 24.0 63.1 Statkraft £4.55/MWh fee 31-Dec-38 1.0 29-Feb-32 Statkraft 90.0% 90.0% 31-Dec-38
Middlemoor 49% 26.5 68.3 RWE 90.0% 08-Nov-28 1.0 30-Sep-30 RWE 90.0% 90.0% 08-Nov-28
North Hoyle 100% 60.0 185.8 Erova 99.0% 31-Dec-35 1.0 30-Jun-34 Total 98.5% 100.0% 31-Mar-27
North Rhins 51.6% 11.4 37.8 E.On 90.0% 31-Dec-24 1.0 31-Dec-29 E.On 90.0% 90.0% 31-Dec-24
Red House 80% 9.8 22.5 EDF 93.5% 31-Mar-27 1.0 31-Jul-28 EDF 93.0% 100.0% 31-Mar-27
Red Tile 80% 19.7 42.4 EDF 93.5% 31-Mar-27 1.0 31-Jul-28 EDF 93.0% 100.0% 31-Mar-27
Rhyl Flats 24.95% 22.5 70.3 RWE 90.0% 31-Dec-27 1.5 31-Jul-29 RWE 90.0% 90.0% 31-Dec-27
Screggagh 100% 20.0 44.4 Energia 80.0% 19-Oct-29 1.0 31-Jan-31 Energia 85.0% 85.0% 19-Oct-29
Sixpenny Wood 51.6% 10.6 28.5 Statkraft £4.55/MWh fee 31-Dec-38 1.0 29-Feb-32 Statkraft 90.0% 90.0% 31-Dec-38
Slieve Divena 100% 30.0 54.9 SSE 95% + £3.00/MWh fee 31-Dec-28 1.0 30-Nov-28 SSE/EDF 95.0% 95.0% 31-Dec-28
Slieve Divena 2 100% 18.8 48.7 SSE 95% + £3.00/MWh fee 31-Mar-37 0.9 28-Feb-37 SSE 95.0% 95.0% 31-Mar-37
South Kyle 100% 235.0 665.6 Vattenfall 100% + £1.90/MWh fee 01-Nov-38 n/a n/a n/a n/a n/a n/a
+ CPI
Stronelairg 35.5% 80.9 302.6 SSE 95.0% 31-Mar-24 0.9 31-Jul-34 SSE 95.0% 95.0% 31-Mar-24
Stroupster 100% 29.9 94.9 BT 87.0% 31-Oct-30 0.9 31-Aug-35 BT 92.0% 100.0% 31-Oct-30
Tappaghan 100% 28.5 68.6 SSE 95% + £3.00/MWh fee 31-Dec-27 1.0 15-Dec-27 SSE/E.On 90.0% 93.8% 31-Dec-27
Tom nan Clach 75% 30.0 124.7 CFD £110.35/MWh + CPI 31-Dec-34 n/a n/a n/a n/a n/a n/a
Twentyshilling 100% 37.8 125.6 Statkraft £2.25/MWh fee 31-Dec-39 n/a n/a n/a n/a n/a n/a
Walney 25.1% 92.2 363.1 Total 97.0% 30-Jun-26 2.0 31-Aug-31 Total 98.5% 100.0% 30-Jun-26
Windy Rig 100% 43.2 138.5 Statkraft £2.25/MWh fee 31-Dec-39 n/a n/a n/a n/a n/a n/a
Yelvertoft 51.6% 8.5 21.7 Statkraft £4.55/MWh fee 31-Dec-38 1.0 29-Feb-32 Statkraft 90.0% 90.0% 31-Dec-38
2,006.7 6,325.5
Investment Manager’s Report continued
Investment Manager’s Report continued
14
Greencoat UK Wind PLC Annual Report for the year ended 31 December 2023
Power Price continued
The following table and chart show the assumed power price (post capture discount, pre PPA discount) and also
the price post a representative PPA discount (90 per cent x index price).
£/MWh (real 2022) 2024 2025 2026 2027 2028 2029 2030
Pre PPA discount 61.34 60.88 56.37 63.76 63.28 60.56 57.36
Post representative PPA discount 55.21 54.79 50.73 57.38 56.95 54.50 51.62
2031 2032 2033 2034 2035 2036 2037 2038 2039 2040
Pre PPA discount 57.04 57.20 58.32 58.32 56.48 57.60 57.20 54.00 53.68 54.00
Post representative PPA discount 51.34 51.48 52.49 52.49 50.83 51.84 51.48 48.60 48.31 48.60
2041 2042 2043 2044 2045 2046 2047 2048 2049 2050
Pre PPA discount 51.84 49.84 48.96 49.12 49.36 48.88 48.48 48.80 49.76 47.20
Post representative PPA discount 46.66 44.86 44.06 44.21 44.42 43.99 43.63 43.92 44.78 42.48
2051 2052 2053 2054 2055 2056 2057 2058 2059 2060
Pre PPA discount 47.28 45.68 46.40 46.40 43.84 43.60 42.24 40.88 41.60 40.80
Post representative PPA discount 42.55 41.11 41.76 41.76 39.46 39.24 38.02 36.79 37.44 36.72
The portfolio benefits from a substantial fixed revenue base. Furthermore, most fixed revenues are index linked
(RPI in the case of ROCs, CPI in the case of CFDs).
£/MWh (real 2022)
0
10
20
30
40
50
60
70
2024
2025
2026
2027
2028
2029
2030
2031
2032
2033
2034
2035
2036
2037
2038
2039
2040
2041
2042
2043
2044
2045
2046
2047
2048
2049
2050
2051
2052
2053
2054
2055
2056
2057
2058
2059
2060
Representative PPA price
Power price
15
G R E E N C O A T
U K W I N D
Power Price continued
The fixed revenue base means that dividend cover is robust in the face of extreme downside power price
sensitivities:
2024 2025 2026 2027 2028
RPI increase (%) 3.5 3.5 3.5 3.5
Dividend (pence/share) 10.00 10.35 10.71 11.09 11.48
Dividend (£ 000) 231,213 239,306 247,681 256,350 265,322
Dividend cover (x)
Base case 2.0 2.0 2.0 2.3 2.4
£50/MWh 1.8 1.8 1.9 1.9 2.0
£40/MWh 1.6 1.6 1.7 1.7 1.7
£30/MWh 1.5 1.5 1.5 1.5 1.5
£20/MWh 1.3 1.3 1.3 1.2 1.2
£10/MWh 1.1 1.1 1.0 1.0 0.9
All numbers illustrative. Power prices real 2022, pre PPA discount.
The Group’s strategy remains to maintain an appropriate balance between fixed and merchant revenue. To the
extent that merchant revenues were to increase as a proportion of total revenues then new fixed price PPAs
would be entered into. However, it is likely that an appropriate revenue balance would be maintained through
the acquisition of new fixed revenue streams (for example, offshore wind CFD assets).
Inflation
Base case assumptions in relation to inflation are:
• CPI: 2.5 per cent (all years)
• RPI: 4.3 per cent (2024), 3.5 per cent (2025-2030), 2.5 per cent (2031 onwards)
The ROC price is inflated annually from 1 April each year based on the previous year’s average RPI. For example,
on 1 April 2024, the ROC price will increase by 9.7 per cent (average RPI over 2023).
CFD prices are also inflated annually from 1 April each year. However, in the case of CFDs, the price is inflated
based on January CPI. For example, on 1 April 2024, CFD prices will increase by 4.0 per cent (January 2024 CPI).
Given the explicit inflation linkage of a substantial proportion of portfolio revenue (ROCs, CFDs, certain PPAs) and
the implicit inflation linkage inherent in power prices, there is a strong link between inflation and portfolio return.
Investment Manager’s Report continued
South Kyle
Returns
The portfolio discount rate was increased by 1 per cent as at 30 June 2023 (total increases of 2 per cent over 2022
and 2023). The levered portfolio IRR now stands at 11 per cent.
Given that the Company’s ongoing charges ratio is less than 1 per cent, the net return to investors is thus 10 per
cent (assuming investment at a share price equal to NAV – the return is greater assuming investment at a share
price below NAV).
A 10 per cent inflation linked return should be very attractive versus other investment opportunities.
The Company’s 10 year track record demonstrates relatively low volatility and the historical and projected dividend
cover is robust. By investing in operating UK wind farms (higher returning than European or solar generation
assets, and lower risk than batteries or development assets), the Company aims to continue to generate consistent
superior risk adjusted returns.
A total return of 10 per cent and a dividend yield of 6 per cent would imply NAV growth of 4 per cent. The total
return is more important than the dividend yield, which depends on the chosen dividend policy (the Company
could choose a different combination of dividend yield and NAV growth).
Excess cash generation (dividend cover) is reinvested to drive NAV growth. Therefore the size of dividend cover
is important; it is not just a question of “covered or not covered”. The business model is self funding and does
not rely on further equity issuance.
Since IPO, aggregate historical dividend cover has been 2.0x and the Group has reinvested £906 million to deliver
NAV growth significantly in excess of RPI.
Investment Manager’s Report continued
16
Greencoat UK Wind PLC Annual Report for the year ended 31 December 2023
Walney
17
G R E E N C O A T
U K W I N D
The chart below shows NAV per share versus RPI:
NAV vs RPI
The chart below shows TSR versus market peers:
Total Shareholder Return vs Market Peers (Bloomberg)
Greencoat UK Wind
Bluefield Solar
Income Fund
The Renewables
Infrastructure Group
Foresight Solar Fund
John Laing Environmental
Assets Group
Next Energy
Solar Fund
%
Dec
2020
Dec
2013
Dec
2014
Dec
2015
Dec
2016
Dec
2017
Dec
2018
Dec
2019
Dec
2021
90
110
130
150
170
190
210
230
250
270
290
Dec
2022
Dec
2023
RPI (rebased to 98)
NAV per share (ex dividend)
Dec
2013
Dec
2014
Dec
2015
Dec
2017
Dec
2016
Pence
Dec
2018
Dec
2019
Dec
2020
Dec
2021
96
100
104
108
112
116
120
124
128
132
136
140
144
148
152
156
160
164
168
172
Dec
2022
Dec
2023
Investment Manager’s Report continued
Outlook
There are currently approximately 30GW (£100 billion) of operating UK wind farms (15GW onshore plus 15GW
offshore). The Group’s market share is approximately 7 per cent. As at 31 December 2023, the average age of
the portfolio was 7.5 years (versus 5 years at IPO in March 2013).
The portfolio is robust in the face of downside power price sensitivities and remains exposed to significant upside
(power prices, asset life extension, asset optimisation, new revenue streams, interest rate cycle etc). The levered
portfolio IRR of 11 per cent and net return to investors of 10 per cent should be very attractive versus other
investment opportunities.
Given the leading market position of the Group and the Investment Manager, there is no shortage of investment
opportunities, further fuelled by the challenging fundraising environment affecting all buyers (in both public and
private markets). The Company will continue to review its capital allocation policy and will assess new acquisitions
in this light.
In general, the outlook for the Group is extremely encouraging.
Investment Manager’s Report continued
Greencoat UK Wind PLC Annual Report for the year ended 31 December 2023
18
Glen Kyllachy
Introduction
The Directors present their Strategic Report for the
year ended 31 December 2023. Details of the Directors
who held office during the year and as at the date of
this report are given on pages 38 to 41.
Investment Objective
The Company’s aim is to provide investors with an
annual dividend that increases in line with RPI inflation
while preserving the capital value of its investment
portfolio in the long term on a real basis through
reinvestment of excess cash flow.
The Company provides investors with the opportunity
to participate directly in the ownership of UK wind
farms, so increasing the resources and capital
dedicated to the deployment of renewable energy and
the reduction of greenhouse gas emissions.
The target return to investors is an IRR net of fees and
expenses of 10 per cent. As a result of the Company’s
prospects, strong balance sheet and cash flow
generation, the Board decided to increase the 2024
target dividend to 10 pence per share which represents
a 14.2 per cent increase above the target dividend for
2023 and is significantly higher than December 2023
RPI. The Board also decided to pay a 3.43 pence per
share dividend for Q4 2023, increasing the 2023 full
year dividend to 10 pence per share.
Progress on the objectives is measured by reference to
the key metrics on page 1.
Investment Policy
The Group invests in UK wind farms predominantly
with a capacity of over 10MW.
Low gearing ensures that the annual dividend is
sufficiently protected against lower power prices. This
means that the Group also has the ability to benefit
from higher power prices as it is not required to enter
into long term fixed price contracts.
The Group used debt facilities to make additional
investments in the year and intends to continue to use
short term debt facilities to make further investments,
where appropriate. The Group will look to repay its
short term debt facilities by refinancing them with
longer term debt facilities or in the equity markets in
order to refresh its debt capacity. While debt facilities
are drawn, the Group benefits from an increase in
investor returns because borrowing costs are below
the underlying return on investments.
The Board believes that there is a significant market in
which the Group can continue to grow over the next
few years.
Capital Allocation
The Company regularly reviews its capital allocation
policy by considering a range of options to optimise
returns to shareholders. In October 2023, as part of
this consideration, the Company announced an
increase in its annual dividend target for 2024 at
10 pence per share, an increase beyond December’s
RPI of 5.2 per cent. The dividend with respect to the
final quarter of the year will be 3.43 pence per share,
taking the annual dividend for 2023 to 10 pence
per share.
The Company also announced a £100 million share
buyback programme and bought back 6.6 million
shares in the final 2 months of the year at an average
cost of 144.4 pence per share.
The Company maintains a disciplined approach to
acquisitions, only investing when it is considered to be
in the interests of shareholders to do so. With the
Company’s share price currently trading at a discount
to NAV, the alternatives for capital allocation warrant
significant consideration.
Structure
The Company is a UK registered investment company
with a premium listing on the London Stock Exchange.
The Group comprises the Company and Holdco.
Holdco invests in SPVs which hold the underlying wind
farm assets. The Group employs Schroders Greencoat
LLP as its Investment Manager.
Discount Control
The Articles of Association require a continuation vote
by shareholders if the share price were to trade at an
average discount to NAV of 10 per cent or more over
a 12 month period.
During the year, the Company’s shares have traded at
an average discount to NAV of 10.5 per cent. In
accordance with the Company’s Articles of Association,
a continuation vote will be proposed at the 2024 AGM.
Notwithstanding this, it is the intention of the Board
for the Company to buy back its own shares in the
market if the share price is trading at a material
discount to NAV, providing that it is in the interests of
shareholders to do so. Given that the share price had
continued to trade at a material discount to NAV, on
26 October 2023 the Company announced the
commencement of a share buyback programme of up
to £100 million executed under the authority granted
by shareholders at the 2023 AGM.
G R E E N C O A T
U K W I N D
Strategic Report
19
Review of Business and Future Outlook
A detailed discussion of individual asset performance
and a review of the business in the year together with
future outlook are covered in the Investment
Manager’s Report on pages 5 to 18.
Key Performance Indicators
The Board believes that the key metrics detailed on
page 1, which are typical for investment entities, will
provide shareholders with sufficient information to assess
how effectively the Group is meeting its objectives.
Ongoing Charges
The ongoing charges ratio of the Company is 0.92 per
cent of the weighted average NAV for the year to
31 December 2023. This is made up as follows and has
been calculated using the AIC recommended
methodology.
31 December 2023 31 December 2022
£’000 % £’000 %
Total management fee 32,844 0.86% 31,348 0.87%
Directors’ fees 385 0.01% 338 0.01%
Other ongoing expenses
(1)
2,058 0.05% 1,970 0.05%
Total 35,287 0.92% 33,656 0.93%
Weighted average NAV 3,834,654 3,622,216
(1)
Other ongoing expenses do not include £1,772k of management
and administration fees relating to the wind farm SPVs that is
recharged to them and £549k of broken deal and project costs.
Assuming no further changes in NAV, the 2024
ongoing charges ratio is expected to be 0.92 per cent.
The Investment Manager is not paid any performance
or acquisition fees.
Employees and Officers of the Company
The Company does not have any employees and
therefore employee policies are not required. The
Directors of the Company are listed on pages 38 to 40.
Principal Risks and Uncertainties
In the normal course of business, each investee
company has a rigorous risk management framework
with a comprehensive risk register that is reviewed and
updated regularly and approved by its board. The
principal risks identified by the Board to the
performance of the Group are detailed below.
The Board maintains a risk matrix setting out the risks
affecting both the Group and the investee companies.
This risk matrix is reviewed and updated at least annually
to ensure that procedures are in place to identify
principal risks and to mitigate and minimise the impact
of those risks should they crystallise. This risk matrix is
also reviewed and updated to identify emerging risks,
such as climate related risks, and to determine whether
any actions are required. This enables the Board to carry
out a robust assessment of the risks facing the Group,
including those risks that would threaten its business
model, future performance, solvency or liquidity.
The risk appetite of the Group is considered in light of
the principal risks and their alignment with the
Company’s Investment Objective. The Board considers
the risk appetite of the Group and the Company’s
adherence to the Investment Policy in the context of
the regulatory environment taking into account, inter
alia, gearing and financing risk, wind resource risk, the
level of exposure to power prices and environmental
and health and safety risks.
As it is not possible to eliminate risks completely, the
purpose of the Group’s risk management policies and
procedures is to reduce risks and to ensure the Group
is adequately prepared to respond to such risks and
minimise any impact should they materialise.
The spread of assets within the portfolio ensures that
the portfolio benefits from a diversified wind resource
and spreads the exposure to a number of potential
technical risks associated with grid connections and
with local distribution and national transmission
networks. In addition, the portfolio includes 6 different
turbine manufacturers, which diversifies technology
and maintenance risks. Finally, each site contains a
number of individual turbines, the performance of
which is largely independent of other turbines.
Risks Affecting the Group
Investment Manager
The ability of the Group to achieve the Company’s
Investment Objective depends heavily on the
experience of the management team within the
Investment Manager and more generally on the
Investment Manager’s ability to attract and retain
suitable staff. The sustained growth of the Group
depends upon the ability of the Investment Manager
to identify, select and execute further investments
which offer the potential for satisfactory returns.
The Investment Management Agreement includes key
man provisions which would require the Investment
Manager to employ alternative staff with similar
experience relating to investment, ownership,
financing and management of wind farms should any
key man cease to be employed by the Investment
Manager. The Investment Management Agreement
ensures that no investments are made following the
loss of key men until suitable replacements are found
and there are provisions for a reduction in the
investment management fee during the loss period. It
also outlines the process for key man replacement with
the Board’s approval. In addition, the key men are
shareholders in the Company.
Strategic Report continued
20
Greencoat UK Wind PLC Annual Report for the year ended 31 December 2023
21
G R E E N C O A T
U K W I N D
Strategic Report continued
Risks Affecting the Group continued
Investment Manager continued
On 7 December 2023, the Company announced that
Laurence Fumagalli would be stepping down from his
role leading the investment management team
alongside Stephen Lilley with effect from 1 March 2024,
with Matt Ridley replacing him. Matt has 16 years’
renewable energy investment management experience,
spanning the development, construction and
operational phases across a range of technologies, with
a focus on wind, and previously was the Head of Private
Markets at the Investment Manager. Stephen and Matt
will lead the broad and experienced team focused on
the management of the Group and its wind farm
portfolio. The majority of the team have been involved
in the management of the Group for over 5 years.
The Investment Manager is one of Europe’s leading
renewable investment managers, which employs over
130 professionals and has over £10 billion of assets
under management. The Investment Manager is 75 per
cent owned by Schroders Group PLC, founded over
200 years ago, and managing over £726 billion of assets
(as of 30 June 2023) with over 6,000 staff globally.
Financing Risk
The Group will finance further investments either by
borrowing or by issuing further shares in addition to its
cash resources. The ability of the Group to deliver
expected real NAV growth is dependent on access to
debt facilities and equity capital markets. There can be
no assurance that the Group will be able to borrow
additional amounts or refinance on reasonable terms or
that there will be a market for further raising of equity.
Investment Returns Become Unattractive
Higher interest rates could persist, making the listed
infrastructure asset class relatively less attractive to
investors. In such circumstances, it is likely that
discount rates would be adjusted to maintain a suitable
premium over increased risk free rates.
Risks Affecting Investee Companies
Regulation
If a change in Government renewable energy policy
were applied retrospectively to current operating
projects including those in the Group’s portfolio, this
could adversely impact the market price for renewable
energy or the value of the green benefits earned from
generating renewable energy. The Government has
evolved the regulatory framework for new projects
being developed but has consistently stood behind the
framework that supports operating projects as it
understands the need to ensure investors can
trust regulation.
Electricity Prices
Other things being equal, a decline in the market price
of electricity would reduce the investee companies’
revenues.
The Group’s dividend policy has been designed to
withstand significant short term variability in power
prices. A longer period of power price decline would
materially affect the revenues of investee companies.
Wind Resource
The investee companies’ revenues are dependent
upon wind conditions, which will vary across seasons
and years within statistical parameters. The standard
deviation of energy production is 10 per cent over a
12 month period (less than 2 per cent over 30 years).
Since long term variability is low, there is no significant
diversification benefit to be gained from geographical
diversification across weather systems.
The Group does not have any control over the wind
resource but has designed its dividend policy such that
it can withstand significant short term variability in
production relating to wind. Before investment, the
Group carries out extensive due diligence and relevant
historical wind data is available over a substantial
period of time. The other component of wind energy
generation, a wind farm’s ability to turn wind into
electricity, is mitigated by purchasing wind farms,
where possible, with a proven operating track record.
Tappaghan
Risks Affecting Investee Companies continued
Wind Resource continued
When acquiring wind farms that have only recently
entered into operation, only limited operational data is
available. In these instances, the acquisition
agreements with the vendors of these wind farms will
include a ‘‘wind energy true-up’’ or an appropriate
discount to the purchase price.
Asset Life
In the event that the wind turbines do not operate for
the period of time assumed by the Group or require
higher than expected maintenance expenditure to do
so, it could have a material adverse effect on
investment returns.
The Group performs regular reviews and ensures that
maintenance is performed on all wind turbines across
the wind farm portfolio. Regular maintenance ensures
the wind turbines are in good working order, consistent
with their expected life-spans.
Health and Safety and the Environment
The physical location, operation and maintenance of
wind farms may, if inadequately assessed and
managed, pose health and safety risks to those
involved. Inappropriate wind farm operation and
maintenance may result in bodily injury, particularly if
an individual were to fall from height, fall or be crushed
in transit from a vessel to an offshore installation or be
electrocuted. If an accident were to occur in relation
to one or more of the Group’s investments and if the
Group were deemed to be at fault, the Group could
be liable for damages or compensation to the extent
such loss is not covered by insurance policies. In
addition, adverse publicity or reputational damage
could follow.
The Board reviews health and safety at each of its
scheduled Board meetings and Martin McAdam serves
as the appointed Health and Safety Director. After
Martin’s retirement at the AGM in April 2024, Jim
Smith will assume this responsibility. The Group also
engages an independent health and safety consultant
to ensure the ongoing appropriateness of its health
and safety policies.
The investee companies comply with all regulatory and
planning conditions relating to the environment,
including in relation to noise emissions, habitat
management and waste disposal.
Going Concern
As further detailed in note 1 to the financial statements
on page 74, the Directors have a reasonable
expectation that the Company and the Group have
adequate resources to continue in operational
existence from the date of approval of this report to at
least February 2025. Accordingly, they continue to
adopt the going concern basis in preparing the
financial statements.
Longer Term Viability
As further disclosed on page 50, the Company is a
member of the AIC and complies with the AIC Code.
In accordance with the AIC Code, the Directors are
required to assess the prospects of the Group over a
period longer than the 12 months associated with
going concern. The Directors conducted this review for
a period of 10 years, which is deemed appropriate,
given the long term nature of the Group’s investments
which are modelled over 30 years, coupled with its
long term strategic planning horizon.
In considering the prospects of the Group, the
Directors looked at the key risks facing both the Group
and the investee companies as detailed on pages 20 to
22, focusing on the likelihood and impact of each risk
as well as any key contracts, future events or timescales
that may be assigned to each key risk. The Directors
also tested and are comfortable that the Company
would continue to remain viable under several robust
downside scenarios, including loss of government
subsidies and a significant decline in long term power
price forecasts, both considered principal risks and
uncertainties affecting investee companies.
As a sector-focused infrastructure fund, the Group aims
to produce stable and inflating dividends while
preserving the capital value of its investment portfolio
on a real basis. The Directors believe that the Group is
well placed to manage its business risks successfully
over both the short and long term and accordingly, the
Board has a reasonable expectation that the Group will
be able to continue in operation and to meet its
liabilities as they fall due for a period of at least 10 years.
The Board does not believe that the lower power
prices projected in the high transition risk scenario, as
discussed on page 33, will diminish the longer term
viability of the Company.
The Directors have also considered the continuation
vote to be proposed at the Company’s AGM in April
2024, caused by the Company’s shares trading at
10.5 per cent average discount to NAV in line with its
Articles of Association. The Directors believe that the
outcome of the shareholder continuation vote will not
impact their opinion of the Company’s longer term
viability.
While the Directors have no reason to believe that the
Group will not be viable over a longer period, they are
of the opinion that it would be difficult to foresee the
economic viability of any company with any degree of
certainty for a period of time greater than 10 years.
Greencoat UK Wind PLC Annual Report for the year ended 31 December 2023
22
Strategic Report continued
G R E E N C O A T
U K W I N D
23
Strategic Report continued
Topic Stakeholder considerations and outcome
Dividends Shareholders voted 99.99 per cent in favour to approve the Company’s dividend policy at the
AGM on 28 April 2023. In recognition of the very strong cash flow delivered by the business
during the year, the Board approved a special dividend payment of 3.43 pence per share for
Q4 2023 which brought total dividends to 10 pence per share with respect to the year.
The Board has also announced a target dividend of 10 pence per share for 2024, an increase
of 14.2 per cent from 2023’s target dividend of 8.76 pence per share.
Stakeholders influencing and/or impacting considerations:
Shareholders and potential investors
Investments During the year, the Company invested in two wind farms and completed the acquisition of
two further wind farms which it committed to acquire in 2020, bringing the Company’s net
generating capacity to over 2GW. Following recommendation from the Investment Manager,
the Directors considered each of the Company’s investments in the context of the Company’s
Investment Policy, availability of financing and the potential returns to investors. They also
considered each investment in the context of sustainability and its impact on the
surrounding community.
Stakeholders influencing and/or impacting considerations:
Shareholders, potential investors, local communities and Investment Manager.
Share Capital On 26 October 2023, the Company announced the commencement of a share buyback
programme of up to £100 million executed under the authority granted by shareholders at the
2023 AGM. The Board determined that buying back shares was in the best interests of
shareholders. As at 31 December 2023, 6.6 million shares were purchased under the above
authority at a total cost of £9.5 million.
During the year, the Company issued 619,546 Ordinary Shares to satisfy the Equity Element
of the Investment Management Fee, in accordance with the Investment Management
Agreement. No shares were issued through equity raisings during the year.
Stakeholders influencing and/or impacting considerations:
Shareholders, potential investors and Investment Manager.
Directors’ Responsibilities Pursuant to Section 172
of the Companies Act 2006
The Directors are responsible for acting in a way that
they consider, in good faith, is the most likely to
promote the success of the Company for the benefit
of its members. In doing so, they should have regard
for the needs of stakeholders and the wider society.
The Company’s objective is to provide investors with
an annual dividend that increases in line with RPI
inflation while preserving the capital value of its
investment portfolio in the long term on a real basis
through reinvestment of excess cash flow.
The Company provides investors with the opportunity
to participate directly in the ownership of UK wind
farms, so increasing the resources and capital
dedicated to the deployment of renewable energy and
the reduction of greenhouse gas emissions. The Board
is also aware of its responsibility for the risk
management of the Group’s climate related risks and
for transparent disclosure of these risks, appreciating
how this is integral to the success of the Company.
Key decisions are those that are either material to the
Company or are significant to any of the Company’s
key stakeholders, as defined on pages 54 to 55. The
Company’s engagement with its key stakeholders,
including the Investment Manager, is discussed further
in the Corporate Governance Report. The key
decisions and discussions detailed in the table below
were made or approved by the Directors during the
year, with the overall aim of promoting the success of
the Company while considering the impact on its
members and wider stakeholders.
Board Composition and Internal Evaluation
During the year, Jim Smith was appointed as a non-
executive Director of the Company with effect from
1 May 2023. With effect from 28 April 2023, Lucinda
Riches C.B.E. succeeded Shonaid Jemmett-Page as
Chairman, following her retirement from the Board,
with Nick Winser C.B.E. succeeding Lucinda Riches as
Senior Independent Director.
On 1 March 2024, Abigail Rotheroe will join the Board.
At the forthcoming AGM, Martin McAdam will not
seek re-election and will retire from the Board.
As disclosed on page 51, the Board undertakes a
formal and rigorous internal evaluation of its
performance each financial year to determine
effectiveness and performance in various areas, as well
as the Directors’ continued independence and tenure.
The reviews concluded that the overall performance of
the Board and Audit Committee was satisfactory and
the Board was confident in its ability to continue to
govern the Company well.
Environmental, Social and Governance
The Group’s approach
The Group invests in wind farms and the environmental
benefits of renewable energy are proven and key to
delivering the Government’s and society’s climate
change objectives. As the largest renewable
infrastructure fund and one of the largest owners of
wind farms in the UK, the Company continues to prove
the viability of clean energy as a robust sector for
investment.
The Group now owns over 2GW of installed capacity
across 49 onshore and offshore operating wind farms.
By dedicating resources to the deployment of
renewable energy, the Group is playing an active role
in reducing the UK’s greenhouse gas emissions and
accelerating a move towards Net Zero for the whole
economy. Since listing, the Group’s operating wind
farms have produced 23.5TWh of clean energy,
avoiding 9.4 million tonnes of CO
2
.
During the year, the Group’s wind farms generated
4,743GWh of renewable electricity. By the end of 2023,
the portfolio was generating sufficient electricity to
power 2.3 million homes
(1)
and avoiding approximately
2.5 million tonnes of CO
2
emissions per annum through
the displacement of thermal generation
(2)
.
Through acquiring operational wind farms from third
parties, this allows capital to be recycled into further
renewable energy projects.
Both generating renewable electricity and enabling
capital recycling contribute to SDG 7 (ensure access to
affordable, reliable, sustainable and modern energy for
all) and SDG 13 (take urgent action to combat climate
change and its impacts).
Directors’ Responsibilities Pursuant to Section 172 of the Companies Act 2006 continued
Topic Stakeholder considerations and outcome
The Board annually reviews the Company’s external service providers and, in particular, the
quality and costs of the services provided and organisational strength where appropriate. It
has concluded that the interests of the Company’s shareholders would be best served by the
ongoing appointments of the Investment Manager, the Administrator and the Company’s
other key service providers on the existing terms.
Stakeholders influencing and/or impacting considerations:
Investment Manager, Administrator and other key service providers.
Strategy session The Board holds an annual strategy session with the Investment Manager, outside of the
scheduled quarterly Board meetings, to consider the Company’s strategic objectives. The
Board believes that the strategy session helped to strengthen a clear and collaborative vision
for the strategic direction of the Company, while taking into account the views and needs
of stakeholders.
Stakeholders influencing and/or impacting considerations:
Shareholders, potential investors and Investment Manager.
Annual review
of service
providers
Strategic Report continued
24
Greencoat UK Wind PLC Annual Report for the year ended 31 December 2023
(1)
The number of homes powered is based on the average annual household energy consumption (2.7MWh/annum (Ofgem)), using the
latest reported figures, and reflects the portfolio’s annual electricity generation as at the relevant reporting date.
(2)
The portfolio’s annual CO
2
emissions avoided through the displacement of thermal generation, based on the portfolio’s annual
generation as at the relevant reporting date. The Group assumes that wind generation replaces CCGT in the UK and applies a carbon
factor of 0.4tCO
2
/MWh (Ofgem).
25
Strategic Report continued
G R E E N C O A T
U K W I N D
Environmental, Social and Governance continued
Responsible Investment
To sustain the long term success of the business, the
Company acknowledges and understands the
importance of effective management of ESG matters
for all stakeholders.
The Company continues to have an important role to
play in championing both responsible investment and
the development of the renewable energy sector. This
is achieved through continuous engagement with all
industry stakeholders, including suppliers, O&M
partners, industry associations, policy makers, peers
and communities. The Company transparently shares
its ESG approach and results with investors.
Responsible investing principles have been applied to
each of the investments made, which require the
Group to make reasonable endeavours to ensure the
ongoing compliance of its investee companies with its
policies on responsible investment and ESG matters.
Although the non-executive Board has overall
responsibility for the activities of the Company and its
investments, the day-to-day management of the
business is delegated to the Investment Manager. This
includes responsibility for ESG matters and applies as
investments are being made and continuously during
the life of each wind farm. The Investment Manager
assesses how ESG should be managed and the
Company has developed its ESG policy in accordance
with the Investment Manager’s ESG Policy. The ESG
Policy of the Company is approved and overseen by
the Company’s Board.
The Group will continue to lead the way in
encouraging responsible investment to accelerate the
development of the UK’s wind energy sector
further and will do this in a way that maximises returns
for our shareholders and creates benefits for the
communities and the natural environment in which its
wind farms operate.
The Investment Manager has representation on the
boards of the operating wind farm companies which
oversee performance, including on ESG matters, and
meet quarterly. From these ongoing reviews, the
Investment Manager reports quarterly to the Company’s
Board, with data on production, wind farm availability,
key events and health and safety performance.
This robust management structure enables the
Investment Manager to oversee ESG issues effectively
throughout the lifecycle of the Group’s wind farms:
Screening
• screening the investment against investment
mandate and restrictions; and
• assessing the ability of the investment to comply
with ESG standards.
Due Diligence
• rigorously assessing ESG risks and opportunities
of the investment based on commitment, capacity,
track record and features of the wind farm; and
• identifying mitigation plans for ESG risks, where
identified.
Investment decision
• identifying and addressing ESG issues in extracts
of the Investment Manager’s Investment
Committee papers that inform investment
decisions; and
• determining and costing plans to address ESG
issues, and price into the investment decision
process.
Asset Management
• establishing appropriate governance structures;
• complying with all relevant laws and regulations;
• ensuring ongoing monitoring and management of
ESG issues;
• managing impacts on the natural habitat
surrounding the wind farms under management;
• engaging with and supporting the local
communities;
• performing due diligence on third parties and
ensuring compliance with the Company’s ESG
policy; and
• ensuring business integrity with a focus on
avoiding money laundering, negligent or corrupt
practices.
Environment
As one of the largest owners of wind farms in the UK,
the Group is focused on taking actions to support
climate change mitigation through the generation of
renewable energy, whilst minimising the potential
impacts that the operation of wind farms may have on
local habitats and the environment.
Environmental, Social and Governance continued
Environment continued
The world continues to face a serious climate
challenge, and the UK is taking an active role as a
global leader in greenhouse gas emissions reduction.
The Company supports the UK Government’s
commitment to achieve Net Zero by 2050 through
acquiring operational wind farms and thereby allowing
developers and utilities to recycle their capital into
further renewable energy projects, and by
demonstrating the attractive long term returns in the
industry through our prudent management of wind
farms, thereby reducing the cost of capital.
The Group is committed to protecting the local
environment around its wind farms, recognising the
potential impact that wind farms can have on local
terrestrial and aquatic wildlife and landscape.
As such, the Group seeks to protect the local
environment around its wind farms by using robust
environmental management systems. These include
policies, periodic risk assessments, monitoring and
regular reporting to the Board and the boards of each
of the wind farm companies. Through these measures,
the Group also ensures compliance with all applicable
laws, regulations and planning permissions as
administered by the Environment Agency, Health
Protection Agency, local authorities, Ofgem, UREGNI
or any other relevant regulatory body, including the
data reporting obligations under Renewable
Obligation Order 2009.
The Group’s core activities include:
• maintaining management systems to evaluate the
potential risks and impacts of its activities and
avoiding or mitigating environmental impacts on
biodiversity, air quality, noise and waste
management where relevant;
• running habitat management plans at its wind
farms;
• undertaking additional environmental impact
assessments or undergoing regular monitoring as
required;
• seeking to work with partners who uphold good
industry standards – from operational managers
whose management systems comply with the
requirements of ISO 14001:2015 (environmental
management systems) to the material contractors
used; and
• reporting regularly to the Board and the boards of
each of the wind farm companies.
26
Greencoat UK Wind PLC Annual Report for the year ended 31 December 2023
Strategic Report continued
CASE STUDY
Seal rescue and rehabilitation in Caithness
Caithness Seal Rehab and Rescue was set up to
protect, rescue, treat and release Common, Harbour
and Grey seals along the Caithness coastline. A barn
near the harbour in Brough has been repurposed to
establish a seal hospital and can house up to four seals
in purpose built pens, a nursery area that can
accommodate a further two seal pups, and three
mobile pens. Seals are picked up, checked by vets, fed
and rehabilitated until they are healthy and at a suitable
weight to be released. Local volunteers help to run the
centre and provide local educational talks about seals.
During the year, Stroupster contributed £15,000 to a project to improve facilities within the barn such as: a
new insulated food preparation room with increased hygiene standards; a small laboratory station; and the
creation of four new large seal pens with concrete floors, insulation, tiling and drainage. The project facilitates
better working conditions for the volunteers at the centre, better storage of equipment, and an opportunity
to accommodate more visitors to the sanctuary to enable it to become a popular tourist attraction. The
funding of such projects remains a key aspect of the Company’s approach to community engagement and
the environment.
27
Strategic Report continued
G R E E N C O A T
U K W I N D
Environmental, Social and Governance continued
Environment continued
The Company also recognises the importance of a
circular economy in achieving Net Zero targets and in
reducing the environmental impact associated with
renewable energy generation. After setting up a grant-
making programme to fund and support academic
research and non-profit projects last year, the first 2
projects are underway. The ‘Added-value Coatings’
research project, led by The University of Edinburgh,
aims to turn decommissioned wind turbine blade
materials into powders that can be used in surface
coatings to protect engineering and structural
components from corrosion. The second project is led
by Imperial College, London and aims to develop an
end-of-life decision-making tool to predict how much
damage a wind turbine blade has accumulated in its
lifetime. The tool aims to support the industry in
making informed and sustainable decisions about the
optimal end-of-life route for turbine blades.
Social
Supporting worker safety and fair employment on
our sites
Worker safety is a top priority for the Group. The Group
also recognises the need for people to be paid fairly for
the work they do and to have appropriate working
conditions. In prioritising these elements, it supports
the local communities in which its wind farms operate,
ensuring the long term viability of its operations.
The Group achieves this through a range of activities,
including:
• complying with all applicable laws relating to
employment, occupational health and safety,
human rights, prevention of human trafficking and
modern slavery, public safety and security and
community matters, including the Wind Turbine
Safety Rules;
• implementing health and safety best practices
through wind farm specific health and safety
policies, project management, contractual
arrangements, staff training and stakeholder
education;
• assessing and monitoring health and safety
practices through wind farm specific risk
identification and prevention activities; and
• reporting on key health and safety data regularly,
with escalation and rapid response procedures in
place in case of emergency.
During the year, these activities included:
• 530 regular safety checks carried out by the
operations and maintenance service providers at
all wind farms;
• safety walks by the Investment Manager’s team at
43 wind farms;
• independent health and safety audits by
accredited professionals at 14 wind farms and
16 O&M partners; and
• HV audits at 10 wind farms.
The Group’s focus on prevention arises out of a culture
of transparent reporting, collaboration, and best
practice. Identifying both hazards and analysing the
causes of incidents is a key risk mitigant.
As a member of Renewable UK, the UK’s leading wind
energy trade association, the Company is keen to work
with other stakeholders to develop the industry further
including on health and safety. In addition, the
Investment Manager is an active member of SafetyOn,
the UK’s leading health and safety focused
organisation for the onshore wind industry. With the
increase in offshore wind capacity in the Company’s
portfolio, the Investment Manager also became a
member of G+, to help ensure industry best practice
for offshore wind assets.
Supporting the communities around our wind farms
It is important that the wind farms are truly part of the
community. The Group’s approach aids long term
support by local communities for wind farms in the UK,
which ultimately enables the continued growth of
the industry.
The Group cares about the communities around
its wind farms and engages with local communities
to ensure respect for land and access rights and that
its wind farms are managed in accordance with
planning permissions.
The Group holds regular dialogue with community
funds and provides financial support to local
groups through community benefit schemes that fund
local projects.
These funds help deliver a range of services, from
improving local amenities and infrastructure to aiding
educational projects for local schools.
In 2023, the Group provided £4.4 million to community
funds.
Environmental, Social and Governance continued
Social continued
Diversity
The Board has a policy to base appointments on merit
and against objective criteria, with due regard for the
benefits of diversity, including both gender and ethnic
diversity. Its objective is to attract and maintain a Board
that, as a whole, comprises an appropriate balance of
skills and experience.
The Board consists of individuals from relevant and
complementary backgrounds offering experience in
the investment management of listed funds, as well as
in the energy sector from both a public policy and a
commercial perspective. As at the date of this report,
the Board comprised 3 men and 2 women, all non-
executive Directors who are considered to be
independent of the Investment Manager and free from
any business or other relationship that could materially
interfere with the exercise of their independent
judgement. Currently, the Chairman and Audit
Committee Chairman positions are both held by
women who represent 40 per cent of Directors on the
Board. After the Company’s AGM on 24 April 2024,
the Board will comprise of 3 women and 2 men.
The Board is cognisant that it does not currently have
ethnic minority representation, contrary to the FCA
diversity guidelines. The size of the Board is relatively
small in comparison to the wider FTSE 250 and
FTSE 100 constituents and therefore provides a greater
challenge in complying with diversity guidelines. In the
recruitment processes conducted during the year,
enhancing the Board’s ethnic diversity was a key focus.
Whilst the Board has not become more ethnically
diverse as a result of the recruitment in 2023, this will
continue to be an important objective during future
succession planning, whilst ensuring an appropriate
balance of skills and experience in the Board.
The Board recognises the importance of an inclusive
and diverse Board in facilitating a collaborative culture
and enhancing the delivery of the Company’s strategic
objectives.
28
Greencoat UK Wind PLC Annual Report for the year ended 31 December 2023
Strategic Report continued
In accordance with Listing Rule 9.8.6R(10), as at the date of this report and as described above, the composition
of the Board is as follows:
Number of
senior positions
Number of on the Board
Board members Percentage (CEO, CFO, SID
in scope of the Board and Chair)
(1)
Men 3 60% 1
Women 2 40% 2
Not specified/prefer not to say ———
(1)
The positions of CEO and CFO are not applicable to the Company as an externally managed investment fund. Senior Board positions will
continue to be reviewed.
Number of
senior positions
Number of on the Board
Board members Percentage (CEO, CFO, SID
in scope of the Board and Chair)
(1)
White British or other White (including minority-white groups) 5 100% 3
Mixed/Multiple Ethnic Groups ———
Asian/Asian British ———
Black/African/Caribbean/Black British ———
Other ethnic group, including Arab ———
Not specified/prefer not to say ———
(1)
The positions of CEO and CFO are not applicable to the Company as an externally managed investment fund. Senior Board positions will
continue to be reviewed.
The above information is based on voluntary self-declaration from the Directors.
The Investment Manager operates an equal opportunities policy and its partners and employees comprise 92 men
and 35 women.
29
Strategic Report continued
G R E E N C O A T
U K W I N D
Environmental, Social and Governance continued
Governance
Detailed disclosure on the Company’s governance
structure and activities can be found in the Corporate
Governance Report on pages 50 to 55 and in the TCFD
Governance section below.
Task Force on Climate Related Financial Disclosures
(TCFD)
The Company strives to maintain the highest standards
of corporate governance and effective risk
identification and management at both Group and
wind farm level. The Company supports the
recommendations of the TCFD and refers to them for
guidance on addressing climate related risks and
opportunities across the Group and enhancing our
disclosure.
These disclosures are categorised between the
4 thematic areas as recommended by the TCFD.
Governance
Board oversight and the role of the Investment
Manager
The Board is responsible for the determination of the
Company’s Investment Objective and Investment
Policy. It also oversees the management of the
Company and its investments, including ESG and
climate related risks and opportunities. The Board also
delegates the day-to-day management of the business,
including management of ESG matters, to the
Investment Manager.
The Audit Committee also considers the Company’s
climate related disclosures in its Annual Report and
Financial Statements.
As discussed in the Corporate Governance Report on
pages 50 to 55, the Board and the Investment Manager
meet regularly and discuss risk management. Climate
related risks are covered during these discussions, as
they naturally arise from the Group’s underlying
investments and the Company’s significant role in the
decarbonisation of the UK economy. A formal risk matrix
is maintained by the Investment Manager and reviewed
and approved by the Board on an annual basis.
The Group is committed to investing in projects that
benefit communities in the long term: the Errogie
Church project is a great example of this approach.
Co-funded by Corriegarth, the Stratherrick & Foyers
Community Trust (SFCT) looks to encourage positive
community development near the wind farm.
Specifically, the project aims to repurpose Errogie
Church into a community hub.
Following the acquisition of Errogie Church 4 years
ago, the project followed an inclusive approach to
decision making with extensive consultations being
held with local residents to gauge the community’s
needs and support for a communal space. This
fostered a sense of ownership and pride in local
heritage. Over the lifetime of the project, the building
will be restored, local talent showcased and
community cohesion enhanced. Additionally,
opportunities for economic growth have emerged
with craft markets, exhibitions, and other activities
which have supported local businesses taking place.
In 2023, we celebrated the completion of the first
phase of the project, as extensive works have been
completed to ensure that the building was fit for
Errogie Chruch
basic use. The Errogie Doors Open Day and the
large turnout are evidence of the consensus around
the initiative and testimony of the positive impact it
will have in the future.
Through ongoing partnerships and community-led
initiatives, the project is on track to leave a lasting
legacy of positive social impact for generations
to come.
CASE STUDY
Errogie Church – Driving positive social impact in the local community
Task Force on Climate Related Financial Disclosures
(TCFD) continued
Governance continued
Board oversight and the role of the Investment
Manager continued
In addition, the Investment Manager has its own ESG
Committee that meets regularly to discuss ESG and
climate related risks relating to the Group and other
funds it manages. This committee has implemented an
ESG Policy that looks to establish best practice in
climate related risk management, reporting and
transparency. Stephen Lilley is on this ESG Committee
and therefore remains well informed and involved with
ESG and climate related discussions, which may impact
the Company. Representatives from the Investment
Manager also sit on all of the boards of the wind farm
companies, which meet quarterly and discuss ESG and
climate related risk management.
Strategy
The Board understands that climate change poses risks
and opportunities to the Company.
As the leading listed renewable infrastructure fund,
invested in UK wind farms, the Company plays a
significant role in the UK renewables industry. Overall,
the Board believes that the decarbonisation of the UK
economy will continue to present a significant
investment opportunity and the size of the Company’s
growth will be related to the success of the sector and
the engagement of its stakeholders. The Company is
committed to its strategy and Investment Policy of
investing in operating wind assets to benefit from this
opportunity. The Company also recognises, however,
that there are short term and medium to long term
transition risks that could impact its future financial
performance. The Company seeks to manage these
risks to mitigate potential impact.
Strategic Report continued
Greencoat UK Wind PLC Annual Report for the year ended 31 December 2023
30
North Hoyle
G R E E N C O A T
U K W I N D
Strategic Report continued
31
Task Force on Climate Related Financial Disclosures (TCFD) continued
Strategy continued
The tables below summarise the principal opportunities and risks identified by the Company and details, where
relevant, how it manages the risks or opportunities.
Opportunities
Category Climate issue Opportunities Company consideration
Transition
Transition
Risks
Category Climate issue Risk Company consideration
Transition The Board considers the likelihood of
any retrospective policy change to be
low in the short term (less than 5
years). To manage any such risk, the
Board and Investment Manager keep
themselves abreast of developments
in international support for renewable
energy as well as their impact and,
where possible, respond to changes
when and if they happen. The
Investment Manager is also actively
engaged in discussion with both
industry and the Government on the
ongoing REMA consultation.
There is a risk that the UK Government
retrospectively changes its financial
support for the renewable energy sector
such as ROCs, network charges and
carbon price floors. Retrospective
changes to such financial support could
decrease portfolio revenues and
increase operating costs making the
technology less commercially viable.
Retrospective
changes to
policies
providing
financial
support to
renewable
energy
The Board believes that providing
investors with a vehicle that supports
their Net Zero ambitions is an
opportunity to the Company in the
short term (<5 years). The Company
continues to evolve its engagement
with the market and its disclosures to
better explain the positive role that
wind energy generation plays in the
energy transition.
Institutional investors are increasingly
expected by regulators and clients to
disclose their strategies to mitigate
climate change. This includes the setting
of Net Zero targets and investing in
assets that contribute to climate change
mitigation such as renewable energy
assets to meet these targets. Increased
investor interest in renewable energy
funds could lead to a lower cost of
capital and enable greater capital raises
to support the long term growth and
investment activities of the Company.
Increased
investor
interest in
renewable
energy funds
Increased
demand for
renewable
energy
generation
The Board considers that the
decarbonisation of the UK economy
will continue to present a significant
investment opportunity in the short
and medium term (0-15 years) and the
size of the Company’s growth will be
related to the success of the sector
and the engagement of its
stakeholders.
Increasing ambition of corporate and
Government Net Zero targets could lead
to a material increase in the procurement
of renewable energy by businesses and
consumers. Moreover, companies are
increasingly required to demonstrate
their commitment to reducing their
carbon footprints, which may increase
the demand for corporate PPAs.
32
Greencoat UK Wind PLC Annual Report for the year ended 31 December 2023
Task Force on Climate Related Financial Disclosures (TCFD) continued
Strategy continued
Risks continued
Category Climate issue Risk Company consideration
Transition
Transition
Physical The Company considers the impact of
such risks to its portfolio to be low. The
current portfolio of wind farms is
designed to withstand extreme
weather conditions and to take
advantage of weather systems such as
increased wind speeds. In addition,
wind turbines are designed to shut
down in the event that wind speeds
exceed very high speeds to protect
them from damage.
The Investment Manager does not
consider an increase in flooding to pose
significant issues to the Company’s
portfolio as onshore wind turbines are
not typically located in areas prone to
flooding. To mitigate risk of damage
from extreme weather events, the
Company procures property damage
and business interruption insurance
should operations be disrupted, or
assets be damaged.
The UK has witnessed an increase in
extreme weather events including
flooding, heatwaves and storms
including high wind speeds in recent
years. Extreme weather events have the
potential to disrupt portfolio operations
impacting cash flows, and to damage
assets resulting in increased operating
costs or insurance premiums.
Increase in
extreme
weather events
The Company considers the potential
impact of this risk to the Company to
be low in the short and medium term.
To manage this risk, the Investment
Manager engages specialist consultants
to measure and report on the
Company’s carbon emissions. The
Investment Manager also uses internal
processes to monitor emerging
climate-related disclosure regulations
and disclosures that are made by the
Company are reviewed by the Audit
Committee as well as the Investment
Manager’s compliance and ESG teams.
There is also an increase in reputational
risk should incorrect or unclear
statements be made in climate related
disclosures that could result in investor
dissatisfaction, fines linked to
greenwashing or broader reputational
damage to the Company and the
Investment Manager.
Increased
reputational
risks
associated
with climate-
related
disclosures and
reporting
obligations
The Board considers there to be
limited potential impact on the
Company from fluctuating power
prices due to the nature of the
portfolio’s cashflows, which are both
fixed and merchant. The Group’s
dividend policy has also been
designed to withstand significant short
term variability in generation or power
price capture.
It is possible that the deployment of
new renewable energy generation
capacity, required to meet future UK
and global emission reduction targets,
could reduce the power prices captured
by the Group’s portfolio investments
resulting in reduced revenues.
Increased
renewable
generation
capacity
reduces power
prices
Strategic Report continued
Task Force on Climate Related Financial Disclosures
(TCFD) continued
Strategy continued
Climate scenarios
The Company recognises the requirement under the
TCFD for considering the resilience of its strategy
under different climate related scenarios, including a
2°C or lower increase scenario. The Board has also
considered the potential impact of a high transition risk
scenario on its strategy and sets out high level
conclusions below. The scenarios were developed by a
market leading consultant.
To meet the FCA’s product level TCFD disclosure
requirements, the Company will publish a separate
report on its website before 30 June 2024. This will
include information relating to an assessment of the
potential impacts of specific transition scenarios as
listed in the FCA Handbook.
High transition risk scenario
Transition risks are those associated with the pace and
extent at which society adapts and mitigates the risk
of climate change. Transition risks can occur when
moving to a greener economy has adverse impacts on
certain sectors, due to policy, legal, market or
technological shifts. The Board and the Investment
Manager continue to believe that the key factor that
could impact the Company in the transition to a lower
carbon economy is the variability of long term prices
for wholesale electricity. In a lower carbon economy,
where considerable build-out of renewable generation
capacity will be required, there is a risk that the power
price received by the Group’s portfolio could be
negatively impacted, depending on how successful the
Government is in implementing its plan and depending
on future electricity market design including the
ongoing REMA consultation.
The Investment Manager has assessed the potential
impact of a high transition risk scenario using a third
party Net Zero model built by leading power market
experts. The model sets out how electricity prices and
the market may develop in line with meeting the
legislated target of Net Zero emissions by 2050,
including current and future policy implementation to
achieve carbon neutrality, technological developments
and commodity price forecasts for a global outlook.
In this high transition risk scenario where global
temperature increases are limited to only 1.5
o
C to 2
o
C
(most typically associated with Net Zero), it is assumed
that the UK Government is successful in implementing
its plan in its entirety and the REMA consultation does
not conclude in significantly different market design. In
this scenario, the long term power price is lower than
the base case used to calculate the Company’s NAV.
The lower long term power price, provided by a leading
market consultant, reflects the wider deployment of low
marginal cost renewable generation capacity, partially
offset by the expected deployment of electrolysers as
part of a growing hydrogen economy, increased
electrification of transport and heat and the build-out of
data centres. Modelling the lower long term power
price would equate to approximately a 17 pence
reduction in NAV per share.
The base case long term power price assumes
significant renewable generation and other measures
to reduce carbon emissions and represents the
independent consultant’s best estimate of likely
outturn. The high transition risk scenario assumes
further measures. The precise effect on power price of
any measures (in the base case and in the high
transition risk scenario) is highly uncertain and is highly
dependent on future electricity market design. The
high transition risk scenario also assumes no other
offsetting factors.
33
Strategic Report continued
G R E E N C O A T
U K W I N D
Dalquhandy
34
Greencoat UK Wind PLC Annual Report for the year ended 31 December 2023
Task Force on Climate Related Financial Disclosures
(TCFD) continued
Strategy continued
Climate scenarios continued
High physical risk scenario
Physical risks may consist of acute physical risk, which
can refer to event driven perils including increased
severity and frequency of extreme weather events, and
chronic physical risk, which can refer to longer term
shifts in climate patterns that cause sea level rises, heat
waves, droughts and desertification.
The Board and the Investment Manager continue to
believe that a scenario where global temperature
increases are significantly higher than 2
o
C (a high
physical risk scenario) would not lead to any significant
physical risk to the Group’s wind farms, which are
designed to operate in extreme weather conditions
and are typically not located in areas prone to flooding.
The Board recognises that climate change could lead
to more extreme weather events including extreme
temperature changes, increased electrical storms,
increased rainfall levels and changes in wind speed and
direction. The Board does not consider these potential
changes to be a material risk to the Group because the
wind farms are designed to operate in extreme
weather conditions, are typically not located in areas
prone to flooding, and insurance and business
continuity plans are in place to manage such an event,
should it occur.
In the medium to long term, the Board and the
Investment Manager recognise that there is a risk that
weather systems may change as a result of higher
temperature change scenarios, but do not believe it is
possible, at this time, to determine whether this would
impact the Group positively or negatively. The Board
and the Investment Manager will continue to
investigate options for physical climate risk models and
tools to support further assessment of the potential
physical risks associated with the Group and wind farm
portfolio.
In 2022, the Investment Manager, with the assistance
of an independent consultant, completed a risk
modelling exercise for a representative sample of the
wind farm SPVs reflecting climate related hazard
exposure over a future period of time. The outcomes
of the risk modelling exercise were reviewed by the
Investment Manager but not considered a credible
basis from which to assess forward looking climate
risks. The Investment Manager will continue to explore
appropriate climate physical risk analysis tools.
Risk Management
As a full scope UK AIFM, the Investment Manager has
established a Risk Management Committee that meets
on a quarterly basis to discuss, amongst other matters,
the risk framework of the Group and investee
companies including processes for identifying,
assessing and managing climate related risks. The
Company’s risk matrix, reviewed and approved by the
Board, includes climate related risks.
All risks identified, including climate related risks are
assessed based on likelihood, impact and mitigation.
The risk assessment is carried out on a qualitative basis
by the Investment Manager, although consideration is
given to how quantitative measures can be used to
support climate related risk assessment. The risk matrix
is then presented to the Board for discussion and
approval on an annual basis.
As mentioned above, climate related risks can be
classified into two broad categories: (i) risks associated
with the transition to a decarbonised economy; and (ii)
risks associated with the physical impacts of climate
change. The table below aims to summarise the most
material transition and physical risks associated with
climate change and the extent to which the Board
considers the impact high or low, based on exposure
and mitigation actions.
To ensure strong performance and risk mitigation, the
Group has specific oversight on environmental and
social issues including climate change. It reinforces this
oversight with a range of activities, including:
• appointing at least one senior representative from
the Investment Manager to the boards of the wind
farm companies to ensure monitoring and
influence of both financial and ESG performance,
including climate related risks and opportunities;
and
• carrying out due diligence during the acquisition
of new wind farms in accordance with the
Investment Manager’s established procedures and
ESG Policy, which requires an analysis of climate
issues.
The Investment Manager’s Investment Committee
comprises experienced senior managers. Whilst
making investment decisions, due consideration is
given to climate related risks as well as to opportunities
identified during due diligence.
Strategic Report continued
Task Force on Climate Related Financial Disclosures
(TCFD) continued
Metrics and Targets
The world continues to face a serious climate
challenge, and the UK is taking an active role as a
global leader in greenhouse gas emissions reduction.
The Government’s Net Zero strategy includes:
• complete decarbonisation of the electricity sector
by 2035;
• 50GW of offshore wind capacity by 2030;
• 70GW of solar PV capacity by 2035;
• 10GW of low carbon hydrogen production
capacity by 2030;
• 24GW of nuclear capacity by 2050;
• capture and store 20-30 MtCO
2
per year by 2030;
and
• electrification of transportation (thus increasing
demand for electricity).
The Group supports this strategy by allowing
developers and utilities to recycle their capital, and by
demonstrating the attractive long term returns in the
industry through its prudent management of wind
farms, thereby reducing the cost of capital and
increasing the potential for further construction of
renewable energy capacity and the decarbonisation of
the economy.
Renewable energy generators avoid CO
2
emissions on
a net basis at a rate of approximately 0.4t CO
2
per
MWh. Given the size of the Group’s investment
portfolio on 31 December 2023, the portfolio’s
contribution to reducing CO
2
emissions is
approximately 2.5 million tonnes per annum. The
portfolio is also generating sufficient electricity to
power 2.3 million homes per annum, at 2.7 MWh
per home.
35
Strategic Report continued
G R E E N C O A T
U K W I N D
Bicker Fen
It is the Investment Manager’s view that Scope 3
emissions are less meaningful given the Company’s
strategy of investing in UK wind farms for the duration
of their asset lives. Furthermore, recognising a wind
farm’s construction and whole life operating emissions
in the year the Group acquires it is potentially
misleading as it both overestimates carbon emissions
in the year of acquisition and underestimates carbon
emissions generated in every other year.
The carbon payback of a wind turbine, how quickly it
offsets the emissions generated during its
manufacture, transportation and on-site construction,
is an indicator of its contribution to accelerating energy
transition. At current rates, carbon payback is typically
around 5-6 months for onshore and 8 months for
offshore wind farms, which is approximately 3 per cent
of the assumed asset life. Carbon footprint indicators
are measured in line with the industry standard
Greenhouse Gas Protocol based on an equity control
approach, meaning emissions from the Group’s
operations are weighted according to the Group’s
proportionate ownership of its SPV investments.
Targets
The Company has not set a carbon emissions reduction
target. It commits to continuing to invest solely in
operating wind power generation assets and to
continue growing its renewable energy generation and
generating capacity to support the transition to a Net
Zero economy. The Investment Manager has been a
signatory to the Net Zero Asset Managers initiative
(‘NZAM’) since 2021. NZAM is an international group
of asset managers committed to supporting the goal
of net zero greenhouse gas emissions by 2050 or
sooner. In 2022, the Investment Manager established a
Net Zero Policy, formalising a commitment to cut the
intensity of its Scope 1 and 2 emissions by 50 per cent
by 2030. With support from the Investment Manager,
the Company will work to develop a plan in line with
evolving UK requirements in this regard, including how
it intends to reduce its carbon footprint to support the
Investment Manager’s commitment whilst continuing
to grow its portfolio and avoid carbon emissions as a
result of its generation activities.
36
Greencoat UK Wind PLC Annual Report for the year ended 31 December 2023
Task Force on Climate Related Financial Disclosures (TCFD) continued
Metrics and Targets continued
Year ended Year ended
31 December 31 December
Disclosure 2023 2022
The portfolio’s Scope 1, Scope 2 and Scope 3 greenhouse gas
emissions are disclosed below.
Scope 1 – direct emissions (tonnes CO
2
) 13 149
Scope 2 – indirect emissions, location based (tonnes CO
2
) 2,162 1,731
Scope 3 – indirect emissions (tonnes CO
2
)
(1)
261,138 136,161
Total Scope 1, 2 and 3 emissions (tonnes CO
2
) 263,313 138,041
Scope 2 – indirect emissions, market based (tonnes CO
2
) 1,485 1,422
Carbon Footprint – scope 1, 2 and 3 emissions normalised
by value of the Company (tonnes CO
2
e/£ million invested)
(2)
42.9 24.6
Weighted Average Carbon Intensity (revenue) – weighted exposure
to investee scope 1, 2 & 3 emissions per revenue generation
(tonnes CO
2
e/£ million)
(2)
1,193.1 535.1
Carbon Intensity – Scope 1, 2 and 3 emissions per MWh renewable
generation (tonnes CO
2
e/MWh renewable energy generation)
(2)
0.00038 0.00035
(1)
Scope 3 emissions are the result of activities from assets not owned or controlled by the Group, but that the Group indirectly impacts in
its value chain. Scope 3 emissions include all sources not within the Group’s Scope 1 and 2 boundary and include, inter alia, emissions arising
from the construction of each wind farm acquired in the year, including those emissions associated with the manufacturing and transport
of all equipment and material, before the wind farm was commissioned, as well as the expected spare part provision throughout its
lifetime.
(2)
Calculations for metrics can be found in the EU SFDR disclosures on pages 122 to 123.
Strategic Report continued
37
Strategic Report continued
G R E E N C O A T
U K W I N D
UK Sustainability Disclosure Requirements (SDR)
In 2023, the FCA published its final rules regarding
Sustainability Disclosure Requirements (SDR). The
Investment Manager has a working group in place,
reporting to its ESG Committee, to understand and
implement requirements of the SDR for funds in scope.
The Company, with support from the Investment
Manager, will consider the rules and work to meet any
obligations of the SDR in the coming financial year.
EU Sustainable Financial Disclosure Regulation
(SFDR)
The Company became Article 9 qualified under EU
SFDR in 2022 and makes sustainability related
disclosures in the financial services sector. Through its
Investment Policy of investing in UK wind farms
predominately with a capacity over 10MW, the
Company contributes to the environmental objective
of climate change mitigation that helps to facilitate the
transition to a low carbon economy.
ESG Report
The Company publishes an annual standalone ESG
Report. This provides further information on how the
Group approaches responsible investment and ESG
matters in addition to further case studies and ESG
performance. The Company’s ESG Report for 2023 will
be published on its website in April 2024.
Detailed Annex V disclosures and the Company’s
principal adverse impacts statement can be found on
pages 105 to 123.
On behalf of the Board
Lucinda Riches C.B.E.
Chairman
28 February 2024
38
Greencoat UK Wind PLC Annual Report for the year ended 31 December 2023
Board of Directors
As at the date of this report, the Board comprises 5 individuals from relevant and complementary backgrounds.
During the year and with effect from the conclusion of the 2023 AGM on 28 April 2023, Shonaid Jemmett-Page
retired from the Board and Lucinda Riches C.B.E. was appointed as Chairman with Nick Winser C.B.E. succeeding
her as Senior Independent Director.
The Directors are of the opinion that the Board as a whole comprises an appropriate balance of skills, experience
and diversity. The Directors of the Company who were in office during the year and up to the date of signing the
financial statements are listed below.
Lucinda Riches C.B.E., Chairman of the Board (appointed 1 May 2019)
Lucinda Riches C.B.E. (Chairman), aged 62, brings significant capital markets
experience, having advised public companies on strategy, fundraising and
investor relations for many years. She also brings extensive experience as a
public company non-executive director across a variety of businesses, including
two FTSE 100 companies.
Lucinda worked at UBS and its predecessor firms for 21 years until 2007 where
she was a managing director, global head of Equity Capital Markets and a
member of the board of the investment bank. She is Chairman of Peel Hunt
Limited and a non-executive Director of Ashtead Group plc. Previously she was
a non-executive Director of UK Financial Investments, a non-executive Director
of The Diverse Income Trust plc, Senior Independent Director of The British Standards Institution and until 2021
she was a non-executive Director of CRH plc and Senior Independent Director of ICG Enterprise Trust plc. She
was awarded a C.B.E. in 2017 for her services to financial services, British industry and to charity.
Caoimhe Giblin, Chairman of the Audit Committee (appointed 1 September 2019)
Caoimhe Giblin (Director and Audit Committee Chairman), aged 47, has
extensive experience in the electricity industry sector and is currently
Commercial Director at ElectroRoute, an energy trading company which is
part of the Mitsubishi Corporation group of companies.
Prior to that, Caoimhe was Director of Finance for SSE Renewables where
she had responsibility for the financial activities of SSE’s significant on and
offshore wind development and construction portfolio. Prior to this, Caoimhe
held various roles in the Corporate Finance department at Airtricity where
she gained significant experience of corporate acquisitions and disposals,
equity fundraising, project finance, debt financing and managed the
company’s corporate valuation process. Caoimhe was appointed Head of Corporate Finance of SSE Renewables
in 2008 following the acquisition of Airtricity by SSE plc.
Caoimhe qualified as a Chartered Accountant with KPMG and spent the early part of her career focusing on
providing corporate finance due diligence, internal audit and risk management services in both Dublin and
New Zealand. Caoimhe is a Fellow of Chartered Accountants of Ireland and has a BA in Accounting & Finance
and an MBS in Accounting from Dublin City University. Caoimhe also holds a Diploma in Company Direction
from the Institute of Directors, of which she is a member. In 2018, Caoimhe was elected to sit on the Wind
Energy Ireland Council.
39
Board of Directors continued
G R E E N C O A T
U K W I N D
Nick Winser C.B.E. Senior Independent Director (appointed 1 January 2022)
Nick Winser C.B.E. (Senior Independent Director), aged 63, has a 30 year
career in the energy sector which included being CEO of National Grid across
UK and Europe, President of the European Network of Transmission System
Operators for Electricity and CIGRE UK Chairman. Nick has been the Chairman
of Energy Systems Catapult since 2015 and was appointed Chairman of the
Advisory Board for the Energy Revolution ISCF programme in 2018. He was
appointed Electricity Network Commissioner by the Government in summer
2022 and is Energy Commissioner at the National Infrastructure Commission.
Nick is a Fellow of the Institute of Engineering and Technology, serving as its
President in 2017/18 and is a Fellow of the Royal Academy of Engineering.
Nick is also former Chairman of the MS Society and a former member of the
Board of the Kier Group.
Martin McAdam (appointed 1 March 2015)
Martin McAdam (Director), aged 62, is an accomplished executive with
significant experience in the energy and renewables sector. He was formerly
Chief Executive Officer of Aquamarine Power. Prior to that, Martin was
President and Chief Executive Officer of the US subsidiary of Airtricity, a role
in which he constructed over 400MW of wind farm capacity.
Martin spent his early career at ESB, the Irish utility, involved in a number of
activities including power station construction and generation planning. After
a number of years in information services, he returned to the power industry
and joined Airtricity, a significant developer and constructor of wind farms
throughout the UK and Ireland, managing construction of new wind farms.
Martin’s role expanded into operations and ultimately to take responsibility for the growing US business. He led
the integration of the Airtricity generation business unit into the SSE Renewables Division after its sale.
Martin is a Chartered Engineer and a Fellow of Engineers Ireland and a Fellow of the Royal Society for the
Encouragement of Arts, Manufactures and Commerce.
Jim Smith (appointed 1 May 2023)
Jim Smith (Director), age 61, is the former Managing Director of
SSE Renewables with 34 years experience within the electricity industry
at SSE. Since retiring from full time employment in 2022 he has
transitioned into a number of part-time roles and is Chair of Noriker Power
Ltd, Chair of Inverness & Cromarty Firth Green Freeport Ltd, a non-executive
Director of Seabank Power Ltd and a renewable energy ambassador to
Cowi UK Ltd.
Jim’s early career in SSE was in development, construction and operations in
both hydro and gas fired generation where he became Station Manager at
Peterhead Power Station. He then went on to be Director of Major Projects
responsible for the group’s major capital infrastructure investments in renewables, thermal generation, gas storage
and transmission.
Following SSE’s acquisition of Airtricity in 2008, he led offshore wind development and construction before taking
responsibility for all wind development and construction. He also spent time as the Managing Director of the
groups energy trading business followed by Managing Director of Generation Operations. Following a
restructuring in 2018 Jim took up his final position as Managing Director of SSE Renewables with responsibility
for the 4000MW operational fleet and the development pipeline, taking over 5GW (gross) of projects through
financial close prior to his retirement.
Jim is a Mechanical Engineer, trained mediator and a mentor for the MCR Pathways charity.
Shonaid Jemmett-Page (appointed 5 December 2012 and retired 28 April 2023)
Shonaid Jemmett-Page, (Chairman) FCA (Director), aged 62, is an experienced
non-executive director in the energy and financial sectors. Shonaid spent the
first 20 years of her career at KPMG in London and Tokyo, rising to the position
of Partner, Financial Services. In 2001, she moved to Unilever, where she was
Senior Vice President, Finance and Information for Asia, based in Singapore,
before returning to the UK as Finance Director for Unilever’s global non-food
business. In 2009, Shonaid joined CDC Group as Chief Operating Officer, a
position she held until 2012.
Since then, Shonaid has focused on non-executive appointments and is
currently Chairman of Cordiant Digital Infrastructure Limited as well as
Chairman of its nominations and management engagement committees,
Chairman of ClearBank Ltd and a member of its nomination and risk committees, non-executive Director of Aviva
plc as well as Chairman of its customer and sustainability committee and a member of its nomination and
governance, risk and audit committees, and non-executive Director of QinetiQ Group plc and Chairman of its
audit committee and a member of its risk and security, remuneration and nomination committees. Until April
2018 she was non-executive Director of GKN plc where she served as Chairman of its audit committee and was
a member of its remuneration and nominations committees. Until November 2019 she was non-executive Director
of MS Amlin plc where she served as Chairman and was also the Chairman of its remuneration and nominations
committees and a member of its risk and solvency committee. Until March 2020 she served as non-executive
Chairman and then non-executive Director of MS Amlin Insurance SE (a Belgian subsidiary of MS Amlin plc), and
until May 2022 she was a non-executive Director of Caledonia Investments plc where she served as Chairman of
its remuneration committee and a member of its governance, nomination and audit committees. She is also the
examiner of the UK branch of an Indian children’s cancer charity.
Abigail Rotheroe (with effect from 1 March 2024)
Abigail is a CFA Charterholder and brings over 20 years’ experience in the
investment industry and knowledge of fund governance and sustainable
investing. She is the former Investment Director of Snowball Impact
Management, responsible for developing the firm’s approach to impact
investment and measurement. She has held positions at Schroder Capital
Management, HSBC Asset Management and was a Director of Columbia
Threadneedle Investments, managing retail and pension fund assets in Asia
and emerging markets.
She is currently a non-executive director of HydrogenOne Capital Growth plc,
Baillie Gifford Shin Nippon plc and Templeton Emerging Markets Investment
Trust plc.
40
Greencoat UK Wind PLC Annual Report for the year ended 31 December 2023
Board of Directors continued
41
G R E E N C O A T
U K W I N D
Board of Directors continued
Other UK Listed Public Company Directorships
In addition to their directorships of the Company, the below Directors currently hold the following UK listed
public company directorships:
Lucinda Riches C.B.E.
Ashtead Group plc
Peel Hunt Limited
With the exception of Martin McAdam, the Directors have all offered themselves for re-election and resolutions
concerning this will be proposed at the 2024 AGM.
Conflicts of Interest
The Directors have declared any conflicts or potential conflicts of interest to the Board which has the authority to
approve such situations. The Company Secretary maintains the Register of Directors’ Conflicts of Interests which
is reviewed bi-annually by the Board and when changes are notified. The Directors advise the Company Secretary
and the Board as soon as they become aware of any conflicts of interest. Directors who have conflicts of interest
do not take part in discussions which relate to any of their conflicts.
In accordance with Provision 9 of the AIC Code, the appointment of any Director has included consideration of
the time they have available to the role. Any additional external appointments will be submitted by Directors to
the Board for approval before the appointment is accepted.
The Directors present their Annual Report, together
with the consolidated financial statements of
Greencoat UK Wind PLC for the year to 31 December
2023. The Corporate Governance Report on pages 50
to 55 forms part of this report.
Details of the Directors who held office during the year
and as at the date of this report are given on pages 38
to 41.
Capital Structure
The Company has one class of ordinary shares which
carry no rights to fixed income. Shareholders are
entitled to all dividends paid by the Company and, on
a winding up, provided the Company has satisfied all
of its liabilities, the shareholders are entitled to all of
the surplus assets of the Company.
Shareholders will be entitled to attend and vote at all
general meetings of the Company and, on a poll, to
one vote for each ordinary share held.
Authority to Purchase Own Shares
The current authority of the Company to make market
purchases of up to 14.99 per cent of its issued share
capital expires at the conclusion of the 2024 AGM.
Special resolution 15 will be proposed at the
forthcoming AGM seeking renewal of such authority
until the next AGM (or 30 June 2025, whichever is
earlier). The price paid for the shares will not be less
than the nominal value or more than the maximum
amount permitted to be paid in accordance with the
rules of the UK Listing Authority in force at the date of
purchase. This power will be exercised only if, in the
opinion of the Directors, a repurchase would be in the
best interests of shareholders as a whole. Any
shares repurchased under this authority will either be
cancelled or held in treasury at the discretion
of the Board for future resale in appropriate
market conditions.
The Directors believe that the renewal of the
Company’s authority to purchase shares, as detailed
above, is in the best interests of shareholders as a
whole and therefore recommend shareholders to vote
in favour of special resolution 15.
The Directors also recommend shareholders to vote in
favour of resolutions 12, 13 and 14, which renew their
authority to allot equity securities for the purpose of
satisfying the Company’s obligations to pay the Equity
Element of the Investment Manager’s fee, and also
their authority to allot equity securities for cash either
pursuant to the authority conferred by resolution 12 or
by way of a sale of treasury shares.
Major Interests in Shares
Significant shareholdings as at 15 February 2024 are
detailed below.
Ordinary
shares held %
15 February
Shareholder 2024
BlackRock Investment Management 7.32
Rathbone Investment Management 5.58
Investec Wealth & Investment 4.61
Schroder Investment Management 4.58
Newton Investment Management 4.16
Hargreaves Lansdown Asset Management 3.69
Charles Stanley 3.02
Significant shareholdings as at 31 December 2023 are
detailed below.
Ordinary
shares held %
31 December
Shareholder 2023
BlackRock Investment Management 8.07
Rathbone Investment Management 5.49
Investec Wealth & Investment 4.65
Schroder Investment Management 4.65
Newton Investment Management 4.38
Hargreaves Lansdown Asset Management 3.50
Charles Stanley 3.02
Companies Act 2006 Disclosures
In accordance with Schedule 7 of the Large and
Medium Sized Companies and Groups (Accounts and
Reports) Regulations 2008 the Directors disclose the
following information:
• the Company’s capital structure is detailed in note
15 to the financial statements and all shareholders
have the same voting rights in respect of the share
capital of the Company. There are no restrictions
on voting rights that the Company is aware of, nor
any agreement between holders of securities that
result in restrictions on the transfer of securities or
on voting rights;
• there exist no securities carrying special rights with
regard to the control of the Company;
• the Company does not have an employees’ share
scheme;
• the rules concerning the appointment and
replacement of Directors are contained in the
Company’s Articles of Association and the
Companies Act 2006;
Report of the Directors
42
Greencoat UK Wind PLC Annual Report for the year ended 31 December 2023
43
G R E E N C O A T
U K W I N D
Companies Act 2006 Disclosures continued
• there exist no agreements to which the Company
is party that may affect its control following a
takeover bid;
• there exist no agreements between the Company
and its Directors providing for compensation for
loss of office that may occur because of a takeover
bid; and
• the Directors’ responsibilities pursuant to Section
172 of the Companies Act 2006, as detailed in the
Strategic Report.
Investment Trust Status
The Company has been approved as an investment
trust under sections 1158 and 1159 of the Corporation
Taxes Act 2010. As an investment trust, the Company
is required to meet relevant eligibility conditions and
ongoing requirements. In particular, the Company
must not retain more than 15 per cent of its eligible
investment income. The Company has conducted and
monitored its affairs so as to enable it to comply with
these requirements.
Diversity and Business Review
A business review is detailed in the Investment
Manager’s Report on pages 5 to 18 and the Group’s
policy on diversity is detailed in the Strategic Report
on page 28.
Directors’ Indemnity
Directors’ and Officers’ liability insurance cover is in
place in respect of the Directors. The Company’s
Articles of Association provide, subject to the
provisions of UK legislation, an indemnity for Directors
in respect of costs which they may incur relating to the
defence of any proceedings brought against them
arising out of their positions as Directors, in which they
are acquitted or judgement is given in their favour by
the Court.
Except for such indemnity provisions in the Company’s
Articles of Association and in the Directors’ letters of
appointment, there are no qualifying third party
indemnity provisions in force.
Streamlined Energy Carbon Reporting
As the Group has outsourced operations to third
parties, there are no significant greenhouse gas
emissions to report from the operations of the Group.
The Group qualifies as a low energy user and is
therefore exempt from disclosures on greenhouse gas
emissions and energy consumption.
The underlying assets of the Group’s investee
companies are renewable energy generators which
avoid CO
2
emissions on a net basis (at a rate of
approximately 0.4t CO
2
per MWh and approximately
2.5 million tonnes per annum given the size of the
Group’s investment portfolio as at 31 December 2023).
Further details of the portfolio’s Scope 1, Scope 2 and
Scope 3 greenhouse gas emissions can be found in the
Strategic Report on page 36.
Risks and Risk Management
The Group is exposed to financial risks such as price
risk, interest rate risk, credit risk and liquidity risk and
the management and monitoring of these risks are
detailed in note 18 to the financial statements.
Independent Auditor
The Directors will propose the reappointment of BDO
LLP as the Company’s Auditor and resolutions
concerning this and the remuneration of the
Company’s Auditor will be proposed at the 2024 AGM.
So far as each of the Directors at the time that this
report was approved are aware:
• there is no relevant audit information of which the
Auditor is unaware; and
• they have taken all the steps they ought to have
taken to make themselves aware of any audit
information and to establish that the Auditor is
aware of that information.
Annual Accounts
The Board is of the opinion that the Annual Report,
taken as a whole, is fair, balanced and understandable
and provides the information necessary for
shareholders to assess the position, performance,
strategy and business model of the Company.
The Board recommends that the Annual Report, the
Report of the Directors and the Independent Auditor’s
Report for the year ended 31 December 2023 are
received and adopted by the shareholders and a
resolution concerning this will be proposed at the
2024 AGM.
Dividend
The Board recommended an interim dividend of
£79.1 million, equivalent to 3.43 pence per share with
respect to the 3 month period ended 31 December
2023, bringing total dividends with respect to the year
to £231.4 million, equivalent to 10 pence per share as
disclosed in note 8 to the financial statements.
Report of the Directors continued
Subsequent Events
Significant subsequent events have been disclosed in
note 21 to the financial statements.
Strategic Report
A review of the business and future outlook, going
concern statement and the principal risks and
uncertainties of the Group have not been included in
this report as they are disclosed in the Strategic Report
on pages 19 to 37.
On behalf of the Board
Lucinda Riches C.B.E.
Chairman
28 February 2024
Report of the Directors continued
44
Greencoat UK Wind PLC Annual Report for the year ended 31 December 2023
Kype Muir Extension
45
G R E E N C O A T
U K W I N D
This report has been prepared by the Directors in accordance with the requirements of the Companies Act 2006
and the Large and Medium sized Companies and Groups (Accounts and Reports) Regulations 2008. A resolution
to approve the Directors’ Remuneration Report will be proposed at the 2024 AGM. At the AGM on 28 April
2023, shareholders voted 99.92 per cent in favour to approve the Directors’ Remuneration Report for the year
ended 31 December 2022.
The Company’s Auditor is required to give their opinion on the information provided on Directors’ remuneration
on pages 45 to 48 of this report and this is explained further in its report to shareholders on page 65. The
remainder of this report is outside the scope of the external audit.
Annual Statement from the Chairman of the Board
The Board, which is profiled on pages 38 to 41, consists solely of non-executive Directors and is considered to
be independent. The Board considers at least annually the level of the Board’s fees, in accordance with the AIC
Code. During the year, the basic fee for non-executive Directors increased by £10,000 per annum to £65,000, the
fee for the Senior Independent Director and the Audit Committee Chairman increased by £5,000 and £10,000
per annum respectively, and the fee for the Chairman increased by £25,000 per annum to £110,000 following an
internal evaluation. The Board confirmed that this increase was appropriate through benchmarking by an external
consultant.
Remuneration Policy
As at the date of this report, the Board comprised 5 Directors, all of whom are non-executive. The Board does
not have a separate Remuneration Committee as, being wholly comprised of non-executive Directors, the whole
Board considers these matters.
At the AGM on 28 April 2023, shareholders voted 99.78 per cent in favour to approve the Company’s
Remuneration Policy, which is put to a vote by shareholders every 3 years. The details of the Company’s
Remuneration Policy are set out in full below. No changes are expected for 2024 and this policy will next be put
to a vote by shareholders at the 2026 AGM.
Each Director receives a fixed fee per annum based on their roles and responsibility within the Company and the
time commitment required. It is not considered appropriate that Directors’ remuneration should be performance
related and none of the Directors are eligible for pension benefits, share options, long term incentive schemes
or other benefits in respect of their services as non-executive Directors of the Company.
The Company’s Articles of Association empower the Board to award a discretionary bonus where any Director has
been engaged in exceptional work on a time spent basis to compensate for the additional time spent over their
expected time commitment.
The Articles of Association provide that Directors retire and offer themselves for re-election at the first AGM after
their appointment and at least every 3 years thereafter. However, in accordance with the AIC Code, the Directors
are required to be re-elected annually. All of the Directors have been provided with letters of appointment for
an initial term of 3 years and for each 3 year term thereafter, which are subject to annual re-election in accordance
with the AIC Code. The following table outlines the effective date and expiry date of each of the Directors’ current
letters of appointment:
Effective date of current Expiry date of current
appointment letter appointment letter
Lucinda Riches C.B.E. 28 April 2023 27 April 2026
Martin McAdam 1 March 2021 24 April 2024
Caoimhe Giblin 1 September 2022 31 August 2025
Nick Winser C.B.E. 28 April 2023 27 April 2026
Jim Smith 1 May 2023 30 April 2026
A Director’s appointment may at any time be terminated by and at the discretion of either the Director or the
Company upon 6 months’ written notice. A Director’s appointment will automatically end without any right to
compensation whatsoever if they are not re-elected by the shareholders. A Director’s appointment may also be
terminated with immediate effect and without compensation in certain other circumstances. Being non-executive
Directors, none of the Directors have a service contract with the Company.
The terms and conditions of appointment of non-executive Directors are available for inspection from the
Company’s registered office.
Directors’ Remuneration Report
Directors’ Remuneration Report continued
46
Greencoat UK Wind PLC Annual Report for the year ended 31 December 2023
47
G R E E N C O A T
U K W I N D
Directors’ Interests (audited information)
Directors who held office and had interests in the shares of the Company as at 31 December 2023 are given in
the table below. There were no changes to the interests of each Director as at the date of this report.
Ordinary shares Ordinary shares
of 1p each held at of 1p each held at
31 December 2023 31 December 2022
Martin McAdam 153,689 103,689
Lucinda Riches C.B.E. 120,000 120,000
Jim Smith
(1)
100,000 n/a
Caoimhe Giblin 70,000 40,000
(1)
Appointed to the Board with effect from 1 May 2023.
Relative Importance of Spend on Pay
The remuneration of the Directors with respect to the year totalled £384,767 (2022: £337,794) in comparison to
dividends paid or declared to shareholders with respect to the year of £231,414,095 (2022: £178,945,737) and
the cost of share buybacks of £9,501,098 (2022: £nil). This is 0.2 per cent (2022: 0.2 per cent) of dividends paid
or declared and 4.1 per cent (2022: 0 per cent) of the cost of share buybacks.
Company Performance
Due to the positioning of the Company in the market as a sector focused infrastructure fund investing in UK wind
farms to produce stable and inflating dividends for investors while aiming to preserve capital value, the Directors
consider that a listed infrastructure fund has characteristics of both an equity index and a bond index. The
following graph shows the TSR of the Company compared to the FTSE 250 index and the Bloomberg Barclays
Sterling Corporate Bond Index:
Directors’ Remuneration Report continued
Total Shareholder Return vs Equity and Bond Indices
On behalf of the Board
Lucinda Riches C.B.E.
Chairman
28 February 2024
%
Greencoat UK Wind PLC
Bloomberg Barclays Sterling
Corporate Bond Index
(rebased to 100)
FTSE 250
(rebased to 100)
90
110
130
150
170
190
210
230
250
270
290
Dec
2013
Dec
2014
Dec
2016
Dec
2017
Dec
2018
Dec
2015
Dec
2019
Dec
2020
Dec
2021
Dec
2022
Dec
2023
Directors’ Remuneration Report continued
48
Greencoat UK Wind PLC Annual Report for the year ended 31 December 2023
Burbo Bank Extension
49
G R E E N C O A T
U K W I N D
Statement of Directors’ Responsibilities
The Directors are responsible for preparing the Annual
Report and the financial statements in accordance with
applicable law and regulations.
Company law requires the Directors to prepare
financial statements for each financial year. Under that
law the Directors are required to prepare the Group’s
financial statements, and have elected to prepare the
Company’s financial statements, in accordance with UK
adopted international accounting standards and with
the requirements of the Companies Act 2006 as
applicable to companies reporting under those
standards. Under company law the Directors must not
approve the financial statements unless they are
satisfied that they give a true and fair view of the state
of affairs of the Group and Company and of the profit
or loss for the Group for that period.
In preparing these financial statements, the Directors
are required to:
• select suitable accounting policies and then apply
them consistently;
• present information, including accounting policies,
in a manner that provides relevant, reliable,
comparable and understandable information;
• provide additional disclosures when compliance
with the specific requirements of IFRS are
insufficient to enable users to understand the
impact of particular transactions, other events and
conditions on the Group and Company financial
position and performance;
• make judgements and accounting estimates that
are reasonable and prudent;
• state whether they have been prepared in
accordance with UK adopted international
accounting standards, subject to any material
departures disclosed and explained in the financial
statements;
• prepare the financial statements on the going
concern basis unless it is inappropriate to presume
that the Company will continue in business; and
• prepare a Report of the Directors, a Strategic
Report and Directors’ Remuneration Report which
comply with the requirements of the Companies
Act 2006.
The Directors are responsible for keeping adequate
accounting records that are sufficient to show and
explain the company’s transactions and disclose with
reasonable accuracy at any time the financial position of
the company and enable them to ensure that the
financial statements comply with the Companies Act
2006. They are also responsible for safeguarding the
assets of the Company and hence for taking reasonable
steps for the prevention and detection of fraud and
other irregularities. The Directors are responsible for
ensuring that the Annual Report, taken as a whole, is
fair, balanced and understandable and provides the
information necessary for shareholders to assess the
Group’s performance, business model and strategy.
The Directors are also responsible under section 172
of the Companies Act 2006 to promote the success of
the Company for the benefit of its members as a whole
and in doing so have regard for the needs of wider
society and other stakeholders.
Website Publication
The Directors are responsible for ensuring the Annual
Report and the financial statements are made available
on a website. Financial statements are published on
the Company’s website in accordance with legislation
in the UK governing the preparation and dissemination
of financial statements, which may vary from legislation
in other jurisdictions. The maintenance and integrity of
the Company’s website is the responsibility of the
Directors. The Directors’ responsibilities also extend to
the ongoing integrity of the financial statements
contained therein.
Directors’ Responsibilities Pursuant to DTR4
The Directors confirm to the best of their knowledge
that:
• the Group’s financial statements have been
prepared in accordance with UK adopted
international accounting standards and with the
requirements of the Companies Act 2006 as
applicable to companies reporting under those
standards, and give a true and fair view of the
assets, liabilities, financial position and profit and
loss of the Group; and
• the Annual Report includes a fair review of the
development and performance of the business
and the financial position of the Group and the
Parent Company, together with a description of
the principal risks and uncertainties that they face.
On behalf of the Board
Lucinda Riches C.B.E.
Chairman
28 February 2024
This Corporate Governance Report forms part of the
Report of the Directors as further disclosed on
pages 42 to 44. The Board operates under a
framework for corporate governance which is
appropriate for an investment company. All companies
with a premium listing of equity shares in the UK are
required under the UK Listing Rules to report on how
they have applied the UK Code in their Annual Report
and financial statements.
The Company became a member of the AIC with effect
from 27 March 2013 and has therefore put in place
arrangements to comply with the AIC Code and, in
accordance with the AIC Code, complies with the
UK Code.
The AIC Code, as explained by the AIC Guide,
addresses all the principles set out in the UK Code, as
well as setting out additional principles and
recommendations on issues that are of specific
relevance to investment companies such as the
Company.
The AIC Code and the AIC Guide are available on the
AIC’s website, www.theaic.co.uk. The UK Code is
available on the FRC’s website, www.frc.org.uk.
The Company has complied with the
recommendations of the AIC Code throughout the
year, where applicable.
Purpose, Culture and Values
The Company’s purpose remains clear; to provide
shareholders with an annual dividend that increases in
line with RPI inflation while preserving the capital value
of its investment portfolio in the long term on a real
basis through reinvestment of excess cash flow.
The Company provides investors with the opportunity
to participate directly in the ownership of UK wind
farms, so increasing the resources and capital
dedicated to the deployment of renewable energy and
the reduction of greenhouse gas emissions.
As an investment trust with no employees, the Board
have agreed that its culture and values should be
aligned with those of the Investment Manager and
centred on long term relationships with the Company’s
key stakeholders and sustainable investment as
follows:
• Integrity is at the heart of every activity, with
importance being placed on transparency,
trustworthiness and dependability.
• The trust of stakeholders is very important to
maintain the Company’s reputation, particularly
for execution certainty for asset sellers and
delivery of investment promises to investors.
• Respect for differing opinions is to be shown
across all interaction and communication.
• Individual empowerment is sought with growth in
responsibility and autonomy being actively
encouraged.
• Collaboration and effectively utilising the
collective skills of all participants is important to
ensure ideas and information are best shared.
The Board
As at the date of this report, the Board consists of 5
non-executive Directors and represents a range of
investment, financial and business skills and
experience. During the year, Shonaid Jemmett-Page
retired as Director and Chairman of the Company with
effect from 28 April 2023, and Jim Smith was
appointed as a Director with effect from 1 May 2023.
The Chairman of the Board is Lucinda Riches C.B.E.,
who was selected to succeed Shonaid following the
2023 AGM. In considering the independence of the
Chairman, the Board took note of the provisions of the
AIC Code relating to independence, and has
determined that Lucinda remains independent as a non-
executive Director with a clear division of responsibilities
from the Investment Manager. The Senior Independent
Director is Nick Winser C.B.E., who was selected to
succeed Lucinda following the 2023 AGM. The
Company, as an Investment Trust, has no employees and
therefore there is no requirement for a chief executive.
The Articles of Association provide that Directors shall
retire and offer themselves for re-election at the first
AGM after their appointment and at least every 3 years
thereafter. However, the AIC Code requires that
Directors be subject to an annual election by
shareholders, and the Directors comply with this
requirement. All of the Directors, other than Martin
McAdam, shall offer themselves for re-election at the
forthcoming AGM. Having considered their
effectiveness, demonstration of commitment to the role,
length of service, attendance at meetings and
contribution to the Board’s deliberations, the Board
approves the nomination for re-election of the Directors.
Corporate Governance Report
50
Greencoat UK Wind PLC Annual Report for the year ended 31 December 2023
51
G R E E N C O A T
U K W I N D
Corporate Governance Report continued
The Board continued
The Company’s view is that the continuity and
experience of its Directors are important and that a
suitable balance needs to be struck with the need for
independence and the refreshing of the skills and
expertise of the Board. The Company believes that
some limited flexibility in its approach to Director
rotation and Chair tenure will enable it to manage
succession planning more effectively, as set out below.
During the year, the Board conducted comprehensive
recruitment processes aimed at ensuring a sustained
balance of skills and experience on the Board in
addition to maintaining diversity. In addition to the
appointment of Jim Smith, the Board engaged an
external recruitment consultant to recruit a non-
executive Director to replace Martin who has
surpassed the nine year director tenure limit and
therefore will not seek re-election at the 2024 AGM.
On 1 March 2024, Abigail Rotheroe will join the Board
bringing over 20 years’ experience from the
investment industry and knowledge of fund
governance and sustainable investing.
The terms and conditions of appointment of non-
executive Directors are available for inspection from
the Company’s registered office.
Chair Tenure Policy
The Company’s policy on Chair tenure is available on
the Company website. The Company’s policy on Chair
tenure is that the Chairman should normally serve no
longer than 9 years as a Director and Chairman but,
where it is in the best interests of the Company, its
shareholders and stakeholders, the Chairman may
serve for a limited time beyond that to help the
Company manage succession planning whilst at the
same time still address the need for regular
refreshment and diversity. In such circumstances the
independence of the other Directors will ensure that
the Board as a whole remains independent.
Diversity Policy
The Company’s policy on Board diversity is available
on the Company website and sets out the approach
that will be adopted to ensure that the Board remains
appropriately balanced, and relevant to the Company’s
operations. The composition of the Board is reviewed
annually by the Nomination Committee, including the
balance of skills, knowledge, experience and the
diversity policy is considered in conjunction with all
Board appointments. The Board’s composition is
detailed within the Strategic Report on page 24.
Performance and Evaluation
Pursuant to Provision 26 of the AIC Code, the Board
undertakes a formal and rigorous evaluation of its
performance each financial year. As a FTSE 250
company, in keeping with the provisions of the AIC
Code, it is the Company’s policy that every 3 years an
external consultant, who has no connection with the
Company, carries out a formal review of the Board’s
performance. This was last conducted in 2022 and
therefore the Board will be subject to an external
evaluation again in 2025.
An internal evaluation of the Board, the Committees
and individual Directors was conducted during 2023 in
the form of annual performance appraisals,
questionnaires and discussions to determine
effectiveness and performance in various areas, as well
as the Directors’ continued independence and tenure.
This process was facilitated by the Company Secretary.
The reviews concluded that the overall performance of
the Board and its Committees was satisfactory and the
Board was confident in its ability to continue to govern
the Company well.
Each individual Director’s training and development
needs are reviewed annually. All new Directors receive
an induction from the Investment Manager and
Company Secretary, which includes the provision of
information about the Company and their
responsibilities. In addition, site visits and specific
Board training sessions are arranged involving
presentations on relevant topics on a regular basis.
Board Responsibilities
The Board will meet, on average, 6 times in each
calendar year for scheduled Board meetings and on an
ad hoc basis as and when necessary. At each meeting
the Board follows a formal agenda that will cover the
business to be discussed. Between meetings there is
regular contact with the Investment Manager and the
Administrator. The Board requires to be supplied with
information by the Investment Manager, the
Administrator and other advisers in a form appropriate
to enable it to discharge its duties.
Board Responsibilities continued
The Board has responsibility for ensuring that the
Company keeps proper accounting records which
disclose with reasonable accuracy at any time the
financial position of the Company and which enable it
to ensure that the financial statements comply with
applicable regulation. It is the Board’s responsibility to
present a fair, balanced and understandable Annual
Report, which provides the information necessary for
shareholders to assess the performance, strategy and
business model of the Company. This responsibility
extends to the half year and other price-sensitive
public reports.
Audit Committee
The Company’s Audit Committee is chaired by
Caoimhe Giblin and consists of a minimum of 3
members. In accordance with best practice, the
Company’s Chairman is not a member of the Audit
Committee however she does attend Audit Committee
meetings as and when deemed appropriate. The Audit
Committee Report which is on pages 56 to 59 of this
report describes the work of the Audit Committee.
Management Engagement Committee
The Company’s Management Engagement Committee
comprises all of the Directors and is required to meet
at least once per year. The Chairman of the
Management Engagement Committee is Lucinda
Riches C.B.E. The Management Engagement
Committee’s main function is to keep under review the
performance of the Investment Manager and make
recommendations on any proposed amendment to the
Investment Management Agreement.
The Management Engagement Committee met once
during the year and agreed an amendment to the
Investment Management Agreement with the
Investment Manager.
Terms of reference for the Management Engagement
Committee have been approved by the Board and are
available on the Company’s website.
Nominations Committee
The Company’s Nominations Committee comprises all
of the Directors and is required to meet at least once
per year. The Chairman of the Nominations Committee
is Lucinda Riches C.B.E. The Nominations Committee’s
main function is to plan for Board succession and to
review annually the structure, size and composition of
the Board and make recommendation to the Board
with regard to any changes that are deemed necessary.
Terms of reference for the Nominations Committee
have been approved by the Board and are available on
the Company’s website.
The Nominations Committee met 5 times during the
year to consider Director remuneration and Board
succession planning, as well as to commence a Director
recruitment process with the assistance of an external
recruitment consultant, Heidrick & Struggles.
Communications and Disclosure Committee
The Company has established a Communications and
Disclosure Committee which is required to meet at
least once a year. The committee has responsibility for,
amongst other things, determining on a timely basis
the disclosure treatment of material information, and
assisting in the design, implementation and periodic
evaluation of disclosure controls and procedures. The
Committee also has responsibility for the identification
of inside information for the purpose of maintaining
the Company’s insider list.
Terms of reference for the Communications and
Disclosure Committee have been approved by the
Board and are available on the Company’s website.
Membership consists of the Chairman (or one other
Director) and one of Stephen Lilley and Laurence
Fumagalli (to be succeeded by Matt Ridley on 1 March
2024). Additional members of the Committee may be
appointed and existing members removed by the
Committee. The membership of the Committee is
reviewed by the Board on a periodic basis and at least
once a year.
The AIC Code recommends that companies appoint a
Remuneration Committee, however the Board has not
deemed this necessary, as being wholly comprised of
non-executive Directors, the whole Board considers
these matters.
The Investment Manager
The Board has entered into the Investment
Management Agreement with the Investment
Manager under which the Investment Manager is
responsible for developing strategy and the day-to-day
management of the Group’s investment portfolio, in
accordance with the Group’s Investment Objective and
Investment Policy, subject to the overall supervision of
the Board. A summary of the fees paid to the
Investment Manager are given in note 3 to the financial
statements.
Corporate Governance Report continued
52
Greencoat UK Wind PLC Annual Report for the year ended 31 December 2023
53
G R E E N C O A T
U K W I N D
Corporate Governance Report continued
The Investment Manager continued
The Investment Management Agreement may be
terminated with immediate effect and without
compensation, by either the Investment Manager or
the Company if the other party has gone into
liquidation, administration or receivership or has
committed a material breach of the Investment
Management Agreement.
The Board as a whole reviewed the Company’s
compliance with the UK Corporate Governance Code,
the Listing Rules, the Disclosure Guidance and
Transparency Rules and the AIC Code. In accordance
with the Listing Rules, the Directors confirm that the
continued appointment of the Investment Manager
under the current terms of the Investment
Management Agreement is in the interests of
shareholders. The Board also reviewed the
performance of other service providers and examined
the effectiveness of the Company’s internal control
systems during the year.
Board Meetings, Committee Meetings and
Directors’ Attendance
The number of meetings of the full Board attended in
the year to 31 December 2023 by each Director is set
out below:
Scheduled Additional
Board Meetings Board Meetings
(Total of 5) (Total of 7)
Lucinda Riches C.B.E. 5 6
Martin McAdam 5 5
Caoimhe Giblin 5 6
Nick Winser C.B.E. 5 6
Jim Smith
(1)
22
Shonaid Jemmett-Page
(2)
35
(1)
Appointed with effect from 1 May 2023, at which point 3
scheduled Board meetings and 5 additional Board meetings had
taken place.
(2)
Resigned with effect from 28 April 2023, at which point 3
scheduled Board meetings and 5 additional Board meetings had
taken place.
The number of meetings of the committees of the
Board attended in the year to 31 December 2023 by
each committee member is set out below:
Management
Audit Engagement Nominations
Committee Committee Committee
Meetings Meetings Meetings
(Total of 4) (Total of 1) (Total of 5)
Lucinda Riches C.B.E.
(1)
2 1 5
Martin McAdam 4 1 5
Caoimhe Giblin 4 1 5
Nick Winser C.B.E. 4 1 5
Jim Smith
(2)
21 4
Shonaid Jemmett-Page
(3)
n/a 01
(1)
Appointed as Chairman and resigned from Audit Committee with
effect from 28 April 2023, at which point 2 Audit Committee
meetings had taken place.
(2)
Appointed to the Board with effect from 1 May 2023, at which
point 2 Audit Committee meetings, no Management
Engagement Committee meetings and 1 Nominations
Committee meeting had taken place.
(3)
Resigned as Chairman with effect from 28 April 2023, at which
point no Management Engagement Committee meetings and
1 Nominations Committee meeting had taken place.
Internal Control
The Board is responsible for the Company’s system of
internal control and for reviewing its effectiveness. The
Board confirms that it has an ongoing process for
identifying, evaluating and managing the significant
risks faced by the Company. This process has been in
place throughout the year and has continued since the
year end.
The Company’s principal risks and uncertainties are
detailed on pages 20 to 22 of this report. As further
explained in the Audit Committee Report, the risks of
the Company are outlined in a risk matrix which was
reviewed and updated during the year. The Board
continually reviews its policy setting and updates the risk
matrix at least annually to ensure that procedures are in
place with the intention of identifying, mitigating and
minimising the impact of risks should they crystallise.
The Board has a process in place to identify emerging
risks, such as climate related risks, and to determine
whether any actions are required. The Board relies on
reports periodically provided by the Investment
Manager and the Administrator regarding risks that the
Company faces. When required, experts are employed
to gather information, including tax and legal advisers.
The Board also regularly monitors the investment
environment and the management of the Company’s
portfolio, and applies the principles detailed in the
internal control guidance issued by the FRC.
Corporate Governance Report continued
Internal Control continued
The Board holds an annual risk and strategy discussion,
which enables the Directors to consider risk outside the
scheduled quarterly Board meetings. This enables
emerging risks to be identified and discussions on
horizon scanning to occur, so the Board can consider
how to manage and potentially mitigate any relevant
emerging risks.
The principal features of the internal controls systems
which the Investment Manager and Administrator have
in place in respect of the Group’s financial reporting
are focused around the 3 lines of defence model and
include:
• internal review of all financial reports;
• review by the Board of financial information prior
to its publication;
• authorisation limits over expenditure incurred by
the Group;
• review of valuations; and
• authorisation of investments.
Whistleblowing
The Board has considered the AIC Code
recommendations in respect of arrangements by which
staff of the Investment Manager or Administrator may,
in confidence, raise concerns within their respective
organisations about possible improprieties in matters
of financial reporting or other matters. It has concluded
that adequate arrangements are in place for the
proportionate and independent investigation of such
matters and, where necessary, for appropriate follow-
up action to be taken within their organisation.
Amendment of Articles of Association
The Company’s Articles of Association may be
amended by the members of the Company by special
resolution (requiring a majority of at least 75 per cent
of the persons voting on the relevant resolution).
Engagement with Stakeholders
The Company is committed to maintaining good
communications and building positive relationships
with all stakeholders, including shareholders, debt
providers, analysts, potential investors, suppliers and
the wider communities in which the Group and its
investee companies operate. This includes regular
engagement with the Company’s shareholders and
other stakeholders by the Board, the Investment
Manager and the Administrator. Highlights of some of
the principal decisions that have been made in the
interests of stakeholders can be found within the
section 172 statement as outlined on pages 23 and 24.
Regular feedback is provided to the Board to ensure
they understand the views of stakeholders and a
stakeholder matrix is reviewed at each scheduled
Board and Audit Committee meeting to record the
stakeholders considered for each item of business.
Relations with Shareholders
The Company welcomes the views of shareholders and
places great importance on communication with its
shareholders. The Investment Manager is available at all
reasonable times to meet with principal shareholders
and key sector analysts. The Chairman, the Senior
Independent Director and other Directors are also
available to meet with shareholders, if required.
All shareholders have the opportunity to put questions
to the Company at its registered address or via email.
The AGM of the Company also provides a forum for
shareholders to meet and discuss issues with the
Directors and Investment Manager. The Company
issues regulatory announcements via the London Stock
Exchange in respect of routine reporting obligations,
periodic financial and portfolio information updates
and in response to other events.
The Board receives comprehensive shareholder reports
from the Company’s Registrar and regularly monitors
the views of shareholders and the shareholder profile
of the Company. The Board is also kept fully informed
of all relevant market commentary on the Company by
the Investment Manager.
Relations with Other Stakeholders
The Company values its relationships with its debt
providers. The Investment Manager ensures the
Company continues to meet its debt covenants and
reporting requirements. During the year, the Company
drew £640 million of new term debt and repaid £150
million of existing term debt, as disclosed in note 13 to
the financial statements.
The Investment Manager conducts presentations with
analysts and investors to coincide with the
announcement of the Company’s full and half year
results, providing an opportunity for discussions and
queries on the Company’s activities, performance and
key metrics. In addition to these semi-annual
presentations, the Investment Manager meets
regularly with analysts and investors to provide further
updates with how the Company and the investment
portfolio are performing.
54
Greencoat UK Wind PLC Annual Report for the year ended 31 December 2023
55
G R E E N C O A T
U K W I N D
Corporate Governance Report continued
Relations with Other Stakeholders continued
The Directors and Investment Manager receive
informal feedback from analysts and investors, which
is presented to the Board by the Company’s Joint
Brokers. The Company Secretary also receives informal
feedback via queries submitted through the
Company’s website and these are addressed by the
Board, the Investment Manager or the Company
Secretary, where applicable.
The Company recognises that relationships with
suppliers are enhanced by prompt payment and the
Company’s Administrator ensures all payments are
processed within the contractual terms agreed with the
individual suppliers.
The Company, via its Investment Manager, has long
term and important relationships with its operational
site managers and turbine operations and maintenance
managers and reviews performance, including health
and safety, on a monthly basis. Representatives of the
site manager and SPV board directors from the
Investment Manager, visit all operational sites on a
regular basis and generally carry out safety walks at
least once a year on each site. The Board’s Health and
Safety Director also visits sites at regular intervals.
Similarly, environment protection issues are reported
on every month by the site managers and annual
habitat management plans are agreed by each SPV
board for all sites to ensure that the environment in
and surrounding each windfarm is carefully protected.
The Directors recognise that the long term success of
the Company is linked to the success of the
communities in which the Group, and its investee
companies, operate. During the year, a number of
community projects were supported by the Group’s
investee companies.
Key decisions made or approved by the Directors
during the year and the impact of those decisions on
the Company’s members and wider stakeholders is
disclosed further in the Strategic Report on pages 23
to 24.
Shareholders may also find Company information or
contact the Company through its website.
On behalf of the Board
Lucinda Riches C.B.E.
Chairman of the Board
28 February 2024
Clyde
56
Greencoat UK Wind PLC Annual Report for the year ended 31 December 2023
At the date of this report, the Audit Committee
comprised Caoimhe Giblin (Chairman), Martin
McAdam, Nick Winser C.B.E. and Jim Smith. The AIC
Code has a requirement that at least one member of
the Audit Committee should have recent and relevant
financial experience and the Audit Committee as a
whole shall have competence relevant to the sector.
The Board is satisfied that the Audit Committee is
properly constituted in these respects. The
qualifications and experience of all Audit Committee
members are disclosed on pages 38 to 41 of this report.
The Audit Committee operates within clearly defined
terms of reference which were reviewed during the
financial year and approved by the Board, and include
all matters indicated by Disclosure Guidance and
Transparency Rule 7.1 and the AIC Code and are
available for inspection on the Company’s website:
www.greencoat-ukwind.com. The Company’s Annual
Report complies with the provisions of the
Competition and Markets Authority’s (CMA) Order.
Audit Committee meetings are scheduled at
appropriate times in the reporting and auditing cycle.
The Chairman, other Directors and third parties may
be invited to attend meetings as and when deemed
appropriate.
Summary of the Role and Responsibilities of the
Audit Committee
The duties of the Audit Committee, amongst other
things, include reviewing the Company’s quarterly
NAV, half year report, Annual Report and financial
statements and any formal announcements relating to
the Company’s financial performance.
The Audit Committee is the forum through which the
external Auditor reports to the Board and is
responsible for reviewing the terms of appointment of
the Auditor, together with their remuneration. On an
ongoing basis, the Audit Committee is responsible for
reviewing the objectivity of the Auditor along with the
effectiveness of the audit and the terms under which
the Auditor is engaged to perform non-audit services
(restricted to the limited scope review of the half year
report and reporting accountant services in relation to
equity raises). The Audit Committee is also responsible
for reviewing the Company’s corporate governance
framework, system of internal controls and risk
management, ensuring they are suitable for an
investment company.
The Audit Committee reports its findings to the Board,
identifying any matters on which it considers that
action or improvement is needed, and makes
recommendations on the steps to be taken.
During the year, the Audit Committee undertook an
assessment of its obligations and processes under the
FRC’s Minimum Standard for audit committees
published during the year.
Overview
During the year, the Audit Committee’s discussions
have been broad ranging. In addition to the 4 formally
convened Audit Committee meetings, the Audit
Committee has had regular contact and meetings with
the Investment Manager, the Administrator and the
Auditor. These meetings and discussions focused on,
but were not limited to:
• a detailed analysis of the Company’s quarterly
NAVs;
• reviewing the updated risk matrix of the Company
and assessing the Company’s risk management
systems;
• reviewing the Company’s corporate governance
framework, including climate related reporting
disclosures under the TCFD framework;
• reviewing the internal controls framework for the
Company, the Administrator and the Investment
Manager, considering the need for a separate
internal audit function;
• considering any incidents of internal control failure
or fraud and the Company’s response;
• considering the ongoing assessment of the
Company as a going concern;
• considering the principal risks and period of
assessment for the longer term viability of the
Company;
• monitoring the ongoing appropriateness of the
Company’s status as an investment entity under
IFRS 10, in particular following an acquisition;
• monitoring compliance with AIFMD, the AIC code
and other regulatory and governance frameworks;
• reviewing and approving the audit plan in relation
to the audit of the Company’s Annual Report and
financial statements;
• monitoring the performance of the Auditor and its
engagement with the Investment Manager and
Administrator;
• monitoring compliance with the Company’s policy
on the provision of non-audit services by the
Auditor;
Audit Committee Report
57
G R E E N C O A T
U K W I N D
Audit Committee Report continued
Overview continued
• reviewing the effectiveness, resources,
qualifications and independence of the Auditor;
• reviewing the Company’s adherence to the
responsibilities within the FRC Audit Committees
and the External Audit: Minimum Standard; and
• reviewing the anti-money laundering procedures
for the Company, the Administrator and the
Investment Manager.
Financial Reporting
The primary role of the Audit Committee in relation to
financial reporting is to review with the Investment
Manager, the Administrator and the Auditor the
appropriateness of the half year report and Annual
Report and financial statements, concentrating on,
amongst other matters:
• the quality and acceptability of accounting policies
and practices;
• the clarity of the disclosures and compliance with
financial reporting standards and relevant financial
and governance reporting requirements;
• amendments to legislation and corporate
governance reporting requirements and
accounting treatment of new transactions in the
year;
• the impact of new and amended accounting
standards on the Company’s financial statements;
• whether the Audit Committee believes that
proper and appropriate processes and procedures
have been followed in the preparation of the half
year report and Annual Report and financial
statements;
• considering and recommending to the Board for
approval the contents of the annual financial
statements and reviewing the Auditor’s report
thereon including considering whether the
financial statements are overall fair, balanced and
understandable;
• material areas in which significant judgements
have been applied or there has been discussion
with the Auditor; and
• any correspondence from regulators in relation to
the Company’s financial reporting.
BDO LLP attended 2 of the 4 Audit Committee
meetings held during the year. The Audit Committee
has also held private meetings with the Auditor to
provide additional opportunities for open dialogue and
feedback. Matters typically discussed include the
Auditor’s assessment of the transparency and
openness of interactions with the Investment Manager
and the Administrator, confirmation that there has
been no restriction in scope placed on them, the
independence of their audit and how they have
exercised professional scepticism.
Significant Issues
The Audit Committee discussed the planning, conduct
and conclusions of the external audit as it proceeded.
At the Audit Committee meeting in advance of the
year end, the Audit Committee discussed and
approved the Auditor’s audit plan. The Audit
Committee identified the carrying value of investments
as a key area of risk of misstatement in the Company’s
financial statements.
Cotton Farm
Greencoat UK Wind PLC Annual Report for the year ended 31 December 2023
58
Assessment of the Carrying Value of Investments
The Group has an accounting policy to designate
investments at fair value through profit or loss.
Therefore, the most significant risk in the Group’s
financial statements is whether its investments are fairly
valued due to the uncertainty involved in determining
the investment valuations. There is also an inherent risk
of management override as the Investment Manager’s
fee is calculated based on NAV, as disclosed in note 3
to the financial statements. The Investment Manager
is responsible for calculating the NAV with the
assistance of the Administrator, prior to approval by
the Board.
On a quarterly basis, the Investment Manager provides
a detailed analysis of the NAV highlighting any
movements and assumption changes from the
previous quarter’s NAV. This analysis and the rationale
for any changes made is considered and challenged by
the Chairman of the Audit Committee and
subsequently considered, challenged and approved by
the Board. The Audit Committee has satisfied itself
that the key estimates and assumptions used in the
valuation model are appropriate and that the
investments have been fairly valued. The key estimates
and assumptions include the useful life of the assets,
the discount rates, the level of wind resource, the rate
of inflation, the price at which the power and
associated benefits can be sold and the amount of
electricity the assets are expected to produce.
Internal Control
The Audit Committee has established a set of ongoing
processes designed to meet the particular needs of the
Company in managing the risks to which it is exposed.
The Investment Manager has identified the principal
risks to which the Company is exposed, and recorded
them on a risk matrix together with the controls
employed to mitigate these risks. The Investment
Manager also identifies emerging risks and determines
whether any actions are required. A residual risk rating
has been applied to each risk. The Audit Committee is
responsible for reviewing the risk matrix and
associated controls before recommending to the
Board for consideration and approval, challenging the
Investment Manager’s assumptions, to ensure a robust
internal risk management process.
The Audit Committee considers risk and strategy
regularly, and formally reviewed the updated risk
matrix in Q1 2024 and will continue to do so at least
annually. By their nature, these procedures provide a
reasonable, but not absolute, assurance against
material misstatement or loss. Regular reports are
provided to the Audit Committee highlighting material
changes to risk ratings.
The Audit Committee reviewed the Group’s principal
risks and uncertainties as at 30 June 2023 to determine
that these were unchanged from those disclosed in the
Company’s 2022 Annual Report and remained the most
likely to affect the Group in the second half of the year.
During the year, the Audit Committee discussed and
reviewed in depth the internal controls frameworks in
place at the Investment Manager and the Administrator.
Discussions were centred around 3 lines of defence:
assurances at operational level; internal oversight; and
independent objective assurance. The Administrator
holds the International Standard on Assurance
Engagements (ISAE) 3402 Type 2 certification. This
entails an independent rigorous examination and testing
of their controls and processes.
The Audit Committee concluded that these frameworks
were appropriate for the identification, assessment,
management and monitoring of financial, regulatory
and other risks, with particular regard to the protection
of the interests of the Company’s shareholders.
Internal Audit
The Audit Committee continues to review the need for
an internal audit function and has decided that the
systems, processes and procedures employed by the
Company, Investment Manager and Administrator,
including their own internal controls and procedures,
provide sufficient assurance that an appropriate level
of risk management and internal control is maintained.
In addition to this, the Company’s external Depositary
provides cash monitoring, asset verification and
oversight services to the Company.
The Audit Committee has therefore concluded that
shareholders’ investments and the Company’s assets
are adequately safeguarded and an internal audit
function specific to the Company is considered
unnecessary.
The Audit Committee is available on request to meet
investors in relation to the Company’s financial
reporting and internal controls.
Audit Committee Report continued
G R E E N C O A T
U K W I N D
59
Audit Committee Report continued
External Auditor
Effectiveness of the Audit Process
The Audit Committee assessed the effectiveness of the
audit process by considering BDO LLP’s fulfilment of
the agreed audit plan through the reporting presented
to the Audit Committee by BDO LLP and the
discussions at the Audit Committee meeting, which
highlighted the major issues that arose during the
course of the audit. In addition, the Audit Committee
also sought feedback from the Investment Manager
and the Administrator on the effectiveness of the audit
process. For this financial year, the Audit Committee
was satisfied that there had been appropriate focus
and challenge on the primary areas of audit risk and
assessed the quality of the audit process to be good.
Non-Audit Services
The Audit Committee has a policy regarding the
provision of non-audit services by the external Auditor.
The Audit Committee monitors the Group’s
expenditure on non-audit services provided by the
Company’s Auditor who should only be engaged for
non-audit services where they are deemed to be the
most commercially viable supplier and prior approval
of the Audit Committee has been sought.
Details of fees paid to BDO LLP during the year are
disclosed in note 5 to the financial statements. The
Audit Committee approved these fees after a review
of the level and nature of work to be performed and
are satisfied that they are appropriate for the scope of
the work required. The Audit Committee seeks to
ensure that any non-audit services provided by the
external Auditor do not conflict with their statutory and
regulatory responsibilities, as well as their
independence, before giving written approval prior to
their engagement. The Audit Committee was satisfied
that provision of these non-audit services did not
provide threats to the Auditor’s independence.
Independence
The Audit Committee is required to consider the
independence of the external Auditor. In fulfilling this
requirement, the Audit Committee has considered a
report from BDO LLP describing its arrangements to
identify, report and manage any conflict of interest and
the extent of non-audit services provided by them.
The Audit Committee has concluded that it considers
BDO LLP to be independent of the Company and that
the provision of the non-audit services described
above is not a threat to the objectivity and
independence of the conduct of the audit.
Re-appointment
BDO LLP has been the Company’s Auditor from its
incorporation on 4 December 2012. The Auditor is
required to rotate the audit partner responsible for the
Group audit every 5 years. A new lead partner was
appointed in 2020 and therefore the lead partner will
be required to rotate after the completion of the 2024
year end audit.
The external audit contract is required to be put to
tender at least every 10 years. The Audit Committee
last conducted a formal and competitive external audit
tender process in 2022 and resolved to reappoint BDO
LLP as the Company’s Auditor for the year ending
31 December 2023.
As described above, the Audit Committee reviewed
the effectiveness and independence of the Auditor and
remains satisfied that the Auditor provides effective
independent challenge to the Board, the Investment
Manager and the Administrator. The Audit Committee
will continue to monitor the performance of the
Auditor on an annual basis and will consider their
independence and objectivity, taking account of
appropriate guidelines.
The Audit Committee has therefore recommended to
the Board that BDO LLP be proposed for re-
appointment as the Company’s Auditor at the 2024
AGM of the Company.
Caoimhe Giblin
Chairman of the Audit Committee
28 February 2024
Greencoat UK Wind PLC Annual Report for the year ended 31 December 2023
60
To the Members of Greencoat UK Wind PLC
Opinion on the financial statements
In our opinion:
• the financial statements give a true and fair view of the state of the Group’s and Parent Company’s affairs as
at 31 December 2023 and of the Group’s profit for the year then ended;
• the Group financial statements have been properly prepared in accordance with UK adopted international
accounting standards;
• the Parent Company financial statements have been properly prepared in accordance with UK adopted
international accounting standards and as applied in accordance with the provisions of the Companies Act
2006; and
• the financial statements have been prepared in accordance with the requirements of the Companies
Act 2006.
We have audited the financial statements of Greencoat UK Wind PLC (the ‘Parent Company’) and its subsidiaries
(the ‘Group’) for the year ended 31 December 2023 which are comprised of the Consolidated Statement of
Comprehensive Income, the Consolidated Statement of Financial Position, the Statement of Financial Position –
Company, the Consolidated and Company Statement of Changes in Equity, the Consolidated Statement of Cash
Flows, the Statement of Cash Flows – Company and notes to the financial statements, including a summary of
material accounting policies. The financial reporting framework that has been applied in their preparation is
applicable law and UK adopted international accounting standards and as regards the Parent Company financial
statements, as applied in accordance with the provision of the Companies Act 2006.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable
law. Our responsibilities under those standards are further described in the Auditor’s responsibilities for the audit
of the financial statements section of our report. We believe that the audit evidence we have obtained is sufficient
and appropriate to provide a basis for our opinion. Our audit opinion is consistent with the additional report to
the Audit Committee.
Independence
Following the recommendation of the Audit Committee, we were appointed by the Board of Directors in the
year of incorporation to audit the financial statements for the year ended 31 December 2013 and subsequent
financial periods. The period of total uninterrupted engagement including retenders and reappointments is
11 years, covering the years ending 31 December 2013 to 31 December 2023. We remain independent of the
Group and Parent Company in accordance with the ethical requirements that are relevant to our audit of the
financial statements in the UK, including the FRC’s Ethical Standard as applied to listed public interest entities,
and we have fulfilled our other ethical responsibilities in accordance with these requirements. The non-audit
services prohibited by that standard were not provided to the Group and Parent Company.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the Directors’ use of the going concern basis of
accounting in the preparation of the financial statements is appropriate. Our evaluation of the Directors’
assessment of the Group and the Parent Company’s ability to continue to adopt the going concern basis of
accounting included:
• Agreeing the key inputs and assumptions relating to the long-term life of the assets and forecasted power
prices used within the valuation models to supporting documentation and our own understanding as a part
of our work over investment valuation which has been covered in the Key Audit matter table below;
• Reviewing the future commitments of the Group and Parent Company and checking they have been
appropriately incorporated into the forecast;
• We have reviewed and challenged the inputs in the stress testing of reasonable and extreme downside
scenarios and cash flow forecasts prepared by the Directors and recalculated the Group and Parent
Company’s liquidity position;
Independent Auditor’s Report
G R E E N C O A T
U K W I N D
61
Conclusions relating to going concern continued
• We have reviewed the Group’s loan agreements, obtained the Director’s assessment of the risk relating to
loans which are expiring within the next 12 months and challenged the Director’s assessment of the ability
to repay or refinance the loans;
• We have checked the compliance with the bank covenants in place, based on the forecast, and considered
the likelihood of these being breached in the future via the stress tested scenarios previously mentioned;
and
• We have reviewed the Board’s assessment of the possible results of the continuation vote by shareholders
at the forthcoming AGM and their expectation that shareholders will vote to continue the Group and
Parent Company.
Based on the work we have performed, we have not identified any material uncertainties relating to events or
conditions that, individually or collectively, may cast significant doubt on the Group and the Parent Company’s
ability to continue as a going concern for a period of at least twelve months from when the financial statements
are authorised for issue.
In relation to the Parent Company’s reporting on how it has applied the UK Corporate Governance Code, we have
nothing material to add or draw attention to in relation to the Directors’ statement in the financial statements
about whether the Directors considered it appropriate to adopt the going concern basis of accounting.
Our responsibilities and the responsibilities of the Directors with respect to going concern are described in the
relevant sections of this report.
An overview of the scope of our Audit
Coverage 100% (2022: 100%) of Group profit before tax
100% (2022: 100%) of Group revenue
100% (2022: 100%) of Group total assets
Key audit matters 2023 2022
Valuation of investments Yes Yes
Materiality Group financial statements as a whole
£56.9m (2022: £58.1m) based on 1.5% (2022: 1.5%) of net assets.
Specific Materiality
Materiality for items impacting on the realised return was £15.9m (2022: £25.5m) based
on 5% (2022: 5%) of profit before tax, excluding the unrealised valuation movements.
Scope of our audit
Our Group audit was scoped by obtaining an understanding of the Group and its environment, including the
Group’s system of internal control, and assessing the risks of material misstatement in the financial statements.
We also addressed the risk of management override of internal controls, including assessing whether there was
evidence of bias by the Directors that may have represented a risk of material misstatement.
We have identified Parent company and Greencoat UK Wind Holdco Limited (Holdco) in the Group as being
significant and both were subject to a full scope audit by BDO LLP. There were no other components in the Group.
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit
of the financial statements of the current period and include the most significant assessed risks of material
misstatement (whether or not due to fraud) that we identified, including those which had the greatest effect on:
the overall audit strategy; the allocation of resources in the audit; and directing the efforts of the engagement
team. These matters were addressed in the context of our audit of the financial statements as a whole and in
forming our opinion thereon, and we do not provide a separate opinion on these matters.
Independent Auditor’s Report continued
62
Greencoat UK Wind PLC Annual Report for the year ended 31 December 2023
Key audit matters continued
Key audit matter How the scope of our audit addressed the key audit matter
In respect of the equity investments valued using discounted cash
flow models, we performed the following specific procedures over
100% of the investments::
• Used spreadsheet analysis tools to assess the integrity of the
valuation models and track changes to inputs or structure from
the valuation model used in the prior year.
• Agreed wind generation and power price forecasts to
independent reports prepared by third-party experts engaged by
management. We have assessed the independence, objectivity
and competence of the experts.
• For the new investments made in the year, we obtained and
reviewed agreements and contracts and considered whether
these were accurately reflected in the valuation model.
• Challenged the appropriateness of the selection and application
of key assumptions in the model including the asset life, discount
rate, level of wind resource, rate of inflation and power price
forecasts by benchmarking to available industry data and
consulting with our internal valuation expert on the above key
assumptions.
• For existing investments, we compared the assumptions used in
the current year to the prior year audited assumptions and agreed
significant changes in assumptions to independent evidence
including available industry data.
• We reviewed the corporation tax workings within the valuation
model and considered whether these had been calculated
accurately in the context of current corporation tax legislation and
rates. This includes a consideration of the electricity generator
levy.
• Agreed cash and other net assets to bank statements and investee
company management accounts.
• Considered the accuracy of forecasting by comparing previous
forecasts to actual results and challenged the reasons for
significant variances and whether these have been adequately
factored into future modelling.
• For each of the key assumptions in the valuation models, we
considered the appropriateness of the assumption and whether
alternative reasonable assumptions could have been applied. We
considered each assumption in isolation as well as in conjunction
with other assumptions and the valuation as a whole. Where
appropriate, we sensitised the valuations where other reasonable
alternative assumptions could have been applied. We also
considered the completeness and clarity of disclosures regarding
the range of reasonable alternative assumptions in the financial
statements.
For loan investments we agreed them to loan agreements and
verified the relevant terms of the loan, we recalculated the closing
value of the loan and tested the movement in the loan balance
during the year.
Key observations
Based on our procedures performed we did not identify any matters
to suggest the valuation of the investments was not appropriate.
Valuation of
investments
(See note 1 and
note 9 on
pages 75 to 77
and 82 to 84)
100% of the underlying
investment portfolio is
represented by
unquoted equity and
loan investments.
The valuation of the
Investment portfolio is
calculated using
discounted cash flow
models. This is a highly
subjective accounting
estimate where there is
an inherent risk of bias
arising from the
investment valuations
being prepared by the
Investment Manager,
who is remunerated
based on the net asset
value of the company.
These estimates include
judgements including
the useful life of the
assets, the discount
rates, the level of wind
resource, the rate of
inflation, the price at
which the power and
associated benefits can
be sold and the amount
of electricity the assets
are expected to
produce.
For these reasons and
the materiality of the
balance in relation to the
financial statements as a
whole, we considered
this to be a key audit
matter.
Independent Auditor’s Report continued
63
G R E E N C O A T
U K W I N D
Our application of materiality
We apply the concept of materiality both in planning and performing our audit, and in evaluating the effect of
misstatements. We consider materiality to be the magnitude by which misstatements, including omissions, could
influence the economic decisions of reasonable users that are taken on the basis of the financial statements.
In order to reduce to an appropriately low level the probability that any misstatements exceed materiality, we use
a lower materiality level, performance materiality, to determine the extent of testing needed. Importantly,
misstatements below these levels will not necessarily be evaluated as immaterial as we also take account of the
nature of identified misstatements, and the particular circumstances of their occurrence, when evaluating their
effect on the financial statements as a whole.
Based on our professional judgement, we determined materiality for the financial statements as a whole and
performance materiality as follows:
Group financial statements Parent company financial statements
2023 2022 2023 2022
£m £m £m £m
Materiality
Basis for determining materiality
Performance materiality
Specific materiality
We also determined that for those items impacting on realised returns, a misstatement of less than materiality for
the financial statements as a whole, specific materiality, could influence the economic decisions of users. As a
result, we determined materiality for these items based on 5% (2022:5%) of profit before tax, excluding unrealised
valuation movements of £15.9m (2022: £25.5m). We further applied a performance materiality level of 75%
(2022: 75%) of specific materiality of £11.3m (2022: £19.1m) to ensure that the risk of errors exceeding specific
materiality was appropriately mitigated.
Component materiality
We set materiality for each component of the Group based on a percentage of 95% (2022: 95%) of Group
materiality dependent on our assessment of the risk of material misstatement of each component. In addition to
the parent company the other significant component in the group is Greencoat UK Wind Holdco Limited for
which the materiality was set at £54m (2022: £55.2m). In the audit of each significant component, we further
applied performance materiality levels of 75% (2022: 75%) of the component materiality to our testing to ensure
that the risk of errors exceeding component materiality was appropriately mitigated.
Reporting threshold
We agreed with the Audit Committee that we would report to them all individual audit differences in excess of
£2.8m (2022: £1.275m) and for those items impacting realised return before tax £795k (2022: £1,275k). We also
agreed to report differences below these thresholds that, in our view, warranted reporting on qualitative grounds.
Basis for determining
performance materiality
75% materiality
The level of performance materiality applied was set after having
considered a number of factors including the expected total value of
known and likely misstatements and the level of transactions in the year.
42.6m 43.6m 40.5m 41.4m
Rationale for the benchmark
applied
Net assets are considered to be the
benchmark of most interest to the
users of the financial statements in
understanding the financial position
of the group as an investor in UK
wind farms.
To address the aggregation risk we
have restricted the materiality to
95%.
1.5% net assets 95% of Group
materiality
56.9 58.1 54 55.2
Independent Auditor’s Report continued
64
Greencoat UK Wind PLC Annual Report for the year ended 31 December 2023
Other information
The Directors are responsible for the other information. The other information comprises the information included
in the annual report other than the financial statements and our auditor’s report thereon. Our opinion on the
financial statements does not cover the other information and, except to the extent otherwise explicitly stated
in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other
information and, in doing so, consider whether the other information is materially inconsistent with the financial
statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated.
If we identify such material inconsistencies or apparent material misstatements, we are required to determine
whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work
we have performed, we conclude that there is a material misstatement of this other information, we are required
to report that fact.
We have nothing to report in this regard.
Corporate governance statement
The Listing Rules require us to review the Directors’ statement in relation to going concern, longer-term viability
and that part of the Corporate Governance Statement relating to the Parent Company’s compliance with the
provisions of the UK Corporate Governance Code specified for our review.
Based on the work undertaken as part of our audit, we have concluded that each of the following elements of
the Corporate Governance Statement is materially consistent with the financial statements or our knowledge
obtained during the audit.
• The Directors’ statement with regards to the appropriateness of adopting
the going concern basis of accounting and any material uncertainties
identified set out on page 22; and
• The Directors’ explanation as to their assessment of the Group’s prospects,
the period this assessment covers and why the period is appropriate set out
on page 22.
• Directors’ statement on fair, balanced and understandable set out on
page 43;
• Board’s confirmation that it has carried out a robust assessment of the
emerging and principal risks set out on page 53;
• The section of the annual report that describes the review of effectiveness of
risk management and internal control systems set out on pages 53 and 54;
and
• The section describing the work of the Audit Committee set out on pages 56
and 57.
Other Code provisions
Going concern and longer-
term viability
Independent Auditor’s Report continued
65
G R E E N C O A T
U K W I N D
Other Companies Act 2006 reporting
Based on the responsibilities described below and our work performed during the course of the audit, we are
required by the Companies Act 2006 and ISAs (UK) to report on certain opinions and matters as described below.
In our opinion, based on the work undertaken in the course of the audit:
• the information given in the Strategic Report and the Directors’ Report for
the financial year for which the financial statements are prepared is consistent
with the financial statements; and
• the Strategic Report and the Directors’ Report have been prepared in
accordance with applicable legal requirements.
In the light of the knowledge and understanding of the Group and Parent Company
and its environment obtained in the course of the audit, we have not identified
material misstatements in the Strategic Report or the Directors’ Report.
In our opinion, the part of the Directors’ remuneration report to be audited has
been properly prepared in accordance with the Companies Act 2006.
We have nothing to report in respect of the following matters in relation to which
the Companies Act 2006 requires us to report to you if, in our opinion:
• adequate accounting records have not been kept by the Parent Company, or
returns adequate for our audit have not been received from branches not
visited by us; or
• the Parent Company financial statements and the part of the Directors’
Remuneration Report to be audited are not in agreement with the
accounting records and returns; or
• certain disclosures of Directors’ remuneration specified by law are not made;
or
• we have not received all the information and explanations we require for
our audit.
Responsibilities of Directors
As explained more fully in the statement of Directors’ responsibilities, the Directors are responsible for the
preparation of the financial statements and for being satisfied that they give a true and fair view, and for such
internal control as the Directors determine is necessary to enable the preparation of financial statements that are
free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the Directors are responsible for assessing the Group’s and the Parent
Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern
and using the going concern basis of accounting unless the Directors either intend to liquidate the Group or the
Parent Company or to cease operations, or have no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from
material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion.
Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance
with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or
error and are considered material if, individually or in the aggregate, they could reasonably be expected to
influence the economic decisions of users taken on the basis of these financial statements.
Matters on which we are
required to report by
exception
Directors’ remuneration
Strategic Report and
Directors’ Report
Independent Auditor’s Report continued
66
Greencoat UK Wind PLC Annual Report for the year ended 31 December 2023
Auditor’s responsibilities for the audit of the financial statements continued
Extent to which the audit was capable of detecting irregularities, including fraud
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures
in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities,
including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is
detailed below:
Non-compliance with laws and regulations
We gained an understanding of the legal and regulatory framework applicable to the Group and the industry in
which it operates, and considered the risk of acts by the Group and the Parent Company which were contrary to
applicable laws and regulations, including fraud. We considered the significant laws and regulations to be the
Companies Act 2006, the FCA listing and DTR rules, the principles of the UK Corporate Governance Code, the
requirements of s.1158 of the Corporation Tax Act, and applicable accounting standards.
Our tests included, but were not limited to:
• Obtaining an understanding of the control environment in monitoring compliance with laws and regulations;
• Agreement of the financial statement disclosures to underlying supporting documentation;
• Enquiries of management and those charged with governance regarding any instances of non-compliance
with laws and regulations; and
• Review of minutes of board meetings throughout the period regarding any instances of non-compliance with
laws and regulations.
Fraud
We assessed the susceptibility of the financial statements to material misstatement including fraud.
Our risk assessment procedures included:
• Enquiry with management, Audit committee and those charged with governance regarding any known or
suspected instances of fraud;
• Obtaining an understanding of the Group’s policies and procedures relating to:
• Detecting and responding to the risks of fraud; and
• Internal controls established to mitigate risks related to fraud.
• Review of minutes of meeting of those charged with governance for any known or suspected instances
of fraud;
• Discussion amongst the engagement team as to how and where fraud might occur in the financial statements;
and
• Considering remuneration incentive schemes and performance targets and the related financial statement
areas impacted by these.
Based on our risk assessment, we considered the areas most susceptible to fraud to be the valuation of
investments and management override of controls.
Our procedures in response to the above included:
• The procedures set out in the Key Audit Matters section above; and
• Testing journals, based on risk assessment criteria as well as an unpredictable sample, and evaluating whether
there was evidence of bias by the Investment Manager and Directors that represented a risk of material
misstatement due to fraud.
Independent Auditor’s Report continued
67
G R E E N C O A T
U K W I N D
Auditor’s responsibilities for the audit of the financial statements continued
Fraud continued
We also communicated relevant identified laws and regulations and potential fraud risks to all engagement team
members, who were deemed to have the appropriate competence and capabilities, and remained alert to any
indications of fraud or non-compliance with laws and regulations throughout the audit.
Our audit procedures were designed to respond to risks of material misstatement in the financial statements,
recognising that the risk of not detecting a material misstatement due to fraud is higher than the risk of not
detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery,
misrepresentations or through collusion. There are inherent limitations in the audit procedures performed and the
further removed non-compliance with laws and regulations is from the events and transactions reflected in the
financial statements, the less likely we are to become aware of it.
A further description of our responsibilities is available on the Financial Reporting Council’s website at:
www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report.
Use of our report
This report is made solely to the Parent Company’s members, as a body, in accordance with Chapter 3 of Part 16
of the Companies Act 2006. Our audit work has been undertaken so that we might state to the Parent Company’s
members those matters we are required to state to them in an auditor’s report and for no other purpose. To the
fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Parent
Company and the Parent Company’s members as a body, for our audit work, for this report, or for the opinions
we have formed.
Peter Smith (Senior Statutory Auditor)
For and on behalf of BDO LLP, Statutory Auditor
London
28 February 2024
BDO LLP is a limited liability partnership registered in England and Wales (with registered number OC305127).
Independent Auditor’s Report continued
68
Greencoat UK Wind PLC Annual Report for the year ended 31 December 2023
For the year ended | For the year ended | ||
31 December 2023 | 31 December 2022 | ||
Note | £’000 | £’000 | |
Investment income | 4 | ||
Unrealised movement in fair value of investments | 9 | ( | |
Other income | |||
Total income and gains | |||
Operating expenses | 5 | ( | ( |
Investment acquisition costs | ( | ( | |
Operating profit | |||
Finance expense | 13 | ( | ( |
Profit for the year before tax | |||
Tax | 6 | ( | |
Profit for the year after tax | |||
| Profit and total comprehensive income attributable to: | |||
Equity holders of the Company | |||
| Earnings per share | |||
Basic and diluted earnings from continuing operations in the year (pence) | 7 |
Consolidated Statement of Comprehensive Income
For the year ended 31 December 2023
The accompanying notes on pages 74 to 102 form an integral part of the financial statements.
69
G R E E N C O A T
U K W I N D
31 December 2023 | 31 December 2022 | ||
Note | £’000 | £’000 | |
| Non current assets | |||
Investments at fair value through profit or loss | 9 | ||
| Current assets | |||
Receivables | 11 | ||
Cash at bank | |||
| Current liabilities | |||
Loans and borrowings | 13 | ( | ( |
Payables | 12 | ( | ( |
Net current liabilities | ( | ( | |
| Non current liabilities | |||
Loans and borrowings | 13 | ( | ( |
Net assets | |||
| Capital and reserves | |||
Called up share capital | 15 | ||
Share premium account | 15 | ||
Capital redemption reserve | 15 | ||
Retained earnings | |||
Total shareholders’ funds | |||
Net assets per share (pence) | 16 |
Consolidated Statement of Financial Position
As at 31 December 2023
The accompanying notes on pages 74 to 102 form an integral part of the financial statements.
31 December 2023 31 December 2022
Note £’000 £’000
Non current assets
Investments at fair value through profit or loss 9 5,558,357 4,978,816
5,558,357 4,978,816
Current assets
Receivables 11 40,381 125
Cash at bank 52 2,446
40,433 2,571
Current liabilities
Loans and borrowings 13 (500,000) (150,000)
Payables 12 (14,793) (8,159)
Net current liabilities (474,360) (155,588)
Non current liabilities
Loans and borrowings 13 (1,290,000) (950,000)
Net assets 3,793,997 3,873,228
Capital and reserves
Called up share capital 15 23,121 23,181
Share premium account 15 2,471,515 2,470,396
Capital redemption reserve 15 66 —
Retained earnings 1,299,295 1,379,651
Total shareholders’ funds 3,793,997 3,873,228
Net assets per share (pence) 16 164.1 167.1
The Company has taken advantage of the exemption under section 408 of the Companies Act 2006 and
accordingly has not presented a Statement of Comprehensive Income for the Company alone. The profit after
tax of the Company alone for the year was £126,188,000 (2022: £953,863,000).
Authorised for issue by the Board on 28 February 2024 and signed on its behalf by:
Lucinda Riches C.B.E. Caoimhe Giblin
Chairman Director
Statement of Financial Position – Company
As at 31 December 2023
The accompanying notes on pages 74 to 102 form an integral part of the financial statements.
70
Greencoat UK Wind PLC Annual Report for the year ended 31 December 2023
71
G R E E N C O A T
U K W I N D
Capital
Share | Share | redemption | Retained | |||
capital | premium | reserve | earnings | Total | ||
For the year ended 31 December 2023 | Note | £’000 | £’000 | £’000 | £’000 | £’000 |
Opening net assets attributable to shareholders 1 January 2023) | ||||||
Issue of share capital | 15 | |||||
Share buybacks | 15 | ( | ( | ( | ||
Share buyback costs | ( | ( | ||||
Profit and total comprehensive income for the year | ||||||
Interim dividends paid in the year | 8 | ( | ( | |||
Closing net assets attributable to shareholders | ||||||
After taking account of cumulative unrealised gains of £ dividend as at 31 December 2023 were £ | Share | Share | Retained | |||
capital | premium | earnings | Total | |||
For the year ended 31 December 2022 | Note | £’000 | £’000 | £’000 | £’000 | |
Opening net assets attributable to shareholders (1 January 2022) | ||||||
Issue of share capital | 15 | |||||
Share issue costs | 15 | ( | ( | |||
Profit and total comprehensive income for the year | ||||||
Interim dividends paid in the year | 8 | ( | ( | |||
Closing net assets attributable to shareholders |
After taking account of cumulative unrealised gains of £713,442,660 , the total reserves distributable by way of a
dividend as at 31 December 2022 were £666,208,331 .
Consolidated and Company Statement of Changes in Equity
For the year ended 31 December 2023
The accompanying notes on pages 74 to 102 form an integral part of the financial statements.
For the year ended | For the year ended | ||
31 December 2023 | 31 December 2022 | ||
Note | £’000 | £’000 | |
Net cash flows from operating activities | 17 | ||
| Cash flows from investing activities | |||
Acquisition of investments | 9 | ( | ( |
Investment acquisition costs | ( | ( | |
Repayment of shareholder loan investments | 9 | ||
Net cash flows from investing activities | ( | ( | |
| Cash flows from financing activities | |||
Payment of issue costs | ( | ||
Share buybacks | ( | ||
Share buyback costs | ( | ||
Amounts drawn down on loan facilities | 13 | ||
Amounts repaid on loan facilities | 13 | ( | ( |
Finance costs | ( | ( | |
Dividends paid | 8 | ( | ( |
Net cash flows from financing activities | ( | ||
Net increase in cash during the year | |||
Cash at the beginning of the year | |||
Cash at the end of the year |
Consolidated Statement of Cash Flows
For the year ended 31 December 2023
The accompanying notes on pages 74 to 102 form an integral part of the financial statements.
72
Greencoat UK Wind PLC Annual Report for the year ended 31 December 2023
73
G R E E N C O A T
U K W I N D
For the year ended For the year ended
31 December 2023 31 December 2022
Note £’000 £’000
Net cash flows from operating activities 17 (65,695) (30,949)
Cash flows from investing activities
Loans advanced to Group companies 9 (680,800) (260,811)
Repayment of loans to Group companies 9 328,412 347,862
Net cash flows from investing activities (352,388) 87,051
Cash flows from financing activities
Payment of issue costs — (42)
Share buybacks (9,439) —
Share buyback costs (56) —
Amounts drawn down on loan facilities 13 1,040,000 460,000
Amounts repaid on loan facilities 13 (350,000) (310,000)
Finance costs (67,773) (29,689)
Dividends paid 8 (197,043) (175,800)
Net cash flows from financing activities 415,689 (55,531)
Net (decrease)/increase in cash during the year (2,394) 571
Cash at the beginning of the year 2,446 1,875
Cash at the end of the year 52 2,446
Statement of Cash Flows – Company
For the year ended 31 December 2023
The accompanying notes on pages 74 to 102 form an integral part of the financial statements.
Notes to the Consolidated Financial Statements
For the year ended 31 December 2023
74
Greencoat UK Wind PLC Annual Report for the year ended 31 December 2023
75
G R E E N C O A T
U K W I N D
Notes to the Consolidated Financial Statements continued
For the year ended 31 December 2023
Notes to the Consolidated Financial Statements continued
For the year ended 31 December 2023
76
Greencoat UK Wind PLC Annual Report for the year ended 31 December 2023
77
G R E E N C O A T
U K W I N D
Notes to the Consolidated Financial Statements continued
For the year ended 31 December 2023
Notes to the Consolidated Financial Statements continued
For the year ended 31 December 2023
78
Greencoat UK Wind PLC Annual Report for the year ended 31 December 2023
79
G R E E N C O A T
U K W I N D
Notes to the Consolidated Financial Statements continued
For the year ended 31 December 2023
Notes to the Consolidated Financial Statements continued
For the year ended 31 December 2023
80
Greencoat UK Wind PLC Annual Report for the year ended 31 December 2023
81
G R E E N C O A T
U K W I N D
Notes to the Consolidated Financial Statements continued
For the year ended 31 December 2023
Notes to the Consolidated Financial Statements continued
For the year ended 31 December 2023
82
Greencoat UK Wind PLC Annual Report for the year ended 31 December 2023
83
G R E E N C O A T
U K W I N D
Notes to the Consolidated Financial Statements continued
For the year ended 31 December 2023
Notes to the Consolidated Financial Statements continued
For the year ended 31 December 2023
84
Greencoat UK Wind PLC Annual Report for the year ended 31 December 2023
85
G R E E N C O A T
U K W I N D
Notes to the Consolidated Financial Statements continued
For the year ended 31 December 2023
Notes to the Consolidated Financial Statements continued
For the year ended 31 December 2023
86
Greencoat UK Wind PLC Annual Report for the year ended 31 December 2023
87
G R E E N C O A T
U K W I N D
Notes to the Consolidated Financial Statements continued
For the year ended 31 December 2023
Notes to the Consolidated Financial Statements continued
For the year ended 31 December 2023
88
Greencoat UK Wind PLC Annual Report for the year ended 31 December 2023
89
G R E E N C O A T
U K W I N D
Notes to the Consolidated Financial Statements continued
For the year ended 31 December 2023
Notes to the Consolidated Financial Statements continued
For the year ended 31 December 2023
90
Greencoat UK Wind PLC Annual Report for the year ended 31 December 2023
91
G R E E N C O A T
U K W I N D
Notes to the Consolidated Financial Statements continued
For the year ended 31 December 2023
Notes to the Consolidated Financial Statements continued
For the year ended 31 December 2023
92
Greencoat UK Wind PLC Annual Report for the year ended 31 December 2023
93
G R E E N C O A T
U K W I N D
Notes to the Consolidated Financial Statements continued
For the year ended 31 December 2023
Notes to the Consolidated Financial Statements continued
For the year ended 31 December 2023
94
Greencoat UK Wind PLC Annual Report for the year ended 31 December 2023
95
G R E E N C O A T
U K W I N D
Notes to the Consolidated Financial Statements continued
For the year ended 31 December 2023
Notes to the Consolidated Financial Statements continued
For the year ended 31 December 2023
96
Greencoat UK Wind PLC Annual Report for the year ended 31 December 2023
97
G R E E N C O A T
U K W I N D
19. Related party transactions
During the year, the Company increased its loan to Holdco by £680,800,000 (2022: £260,811,425) and Holdco
settled amounts of £328,411,737 (2022: £347,862,031). The amount outstanding at the year end was
£2,696,103,477 (31 December 2022: £2,343,715,214).
Under the terms of a Management Services Agreement with Holdco, the Company receives £800,000 per annum
in relation to management and administration services. During the year, £800,000 (2022: £800,000) was paid from
Holdco to the Company under this agreement and amounts due to the Company at the year end were £nil
(2022: £nil).
Holdco has Management Service Agreements in place with various wind farms. Total amounts received by Holdco,
amounts paid to the Investment Manager and amounts paid to the Administrator during the year, are outlined in
the table below.
During the year, Holdco received £1,861,994 (2022: £2,847,873) in relation to renewables obligation proceeds on
behalf of Bin Mountain, Carcant and Tappaghan. Amounts due to these investee companies as at 31 December
2023 were £3,246 (2022: £nil).
As at 31 December 2023, £182,698 was due to Bicker Fen (2022: £230,214 due from Bicker Fen), £834,064 was
due to Fenlands (2022: £120,135 due from Fenlands), £924,611 was due to North Hoyle (2022: £869,799 due from
North Hoyle), £147,295 was due to Nanclach (2022: £nil), £51,783 was due to Langhope Rig (2022: £nil), £27,133
was due to Douglas West (2022: £nil) and £1,017,709 was due from Burbo (2022: £nil) in respect of tax
payments/rebates paid/received by Holdco.
As at 31 December 2023, under the terms of Management Services Agreements with the SPVs, Holdco was due
to receive £982 from Fenlands (2022: £899 from Bicker Fen, £899 from Fenlands and £32,588 from Windy Rig).
Notes to the Consolidated Financial Statements continued
For the year ended 31 December 2023
19. Related party transactions continued
As at 31 December 2023, under the terms of the Investment Management Agreement, the Company owed the
Investment Manager a Cash Fee of £7,715,319 and an Equity Element of £375,000, relating to the final quarter
of the year and a 2023 true-up.
As at 31 December 2023, an amount of £1,539,501 (2022: £nil) was payable from the Group to Douglas West,
being a return of a dividend received during the year.
For the year ended 31 December 2023
Expenses paid
to the Expenses paid
Income Investment to the
received Manager Administrator
£ £ £
Andershaw, Bin Mountain, Bishopthorpe, Brockaghboy, Carcant,
Church Hill, Cotton Farm, Corriegarth, Crighshane, Douglas West,
Earl’s Hall Farm, Glen Kyllachy, Kildrummy, Langhope Rig, Maerdy,
North Hoyle, Screggagh, Slieve Divena, Slieve Divena 2,
Stroupster, Tappaghan, Tom nan Clach, Twentyshilling, Windy Rig: 1,366,019 683,010 683,010
£56,918 income receivable per wind farm per annum
£28,459 expenses payable to the Investment Manager per wind farm
per annum
£28,459 expenses payable to the Administrator per wind farm per annum
Braes of Doune, Drone Hill, North Rhins, Sixpenny Wood,
Yelvertoft:
£42,688 income receivable per wind farm per annum 213,440 71,147 142,293
£14,229 expenses payable to the Investment Manager per wind farm
per annum
£28,459 expenses payable to the Administrator per wind farm per annum
Dalquhandy:
£32,200 income receivable per annum
32,200 16,100 16,100
£16,100 expenses payable to the Investment Manager per annum
£16,100 expenses payable to the Administrator per annum
Dunmaglass Holdco, Stronelairg Holdco:
£8,574 income receivable per wind farm per annum
£nil expenses payable to the Investment Manager per wind farm
17,148 — 17,148
per annum
£8,574 expenses payable to the Administrator per wind farm per annum
Bicker Fen, Fenlands:
£3,274 income receivable per wind farm per annum
£3,274 expenses payable to the Investment Manager per wind farm
6,548 6,548 —
per annum
£nil expenses payable to the Administrator per wind farm per annum
Walney Holdco:
£21,570 income receivable per annum
21,570 10,785 10,785
£10,785 expenses payable to the Investment Manager per annum
£10,785 expenses payable to the Administrator per annum
Humber Holdco:
£8,459 income receivable per annum
8,459 — 8,459
£nil expenses payable to the Investment Manager per annum
£8,459 expenses payable to the Administrator per annum
Burbo Bank Extension:
£6,740 income receivable per annum
6,740 6,740 —
£6,740 expenses payable to the Investment Manager per annum
£nil expenses payable to the Administrator per wind farm per annum
Total 1,672,124 794,329 877,795
Notes to the Consolidated Financial Statements continued
For the year ended 31 December 2023
98
Greencoat UK Wind PLC Annual Report for the year ended 31 December 2023
99
G R E E N C O A T
U K W I N D
19. Related party transactions continued
For the year ended 31 December 2022
Expenses paid
to the Expenses paid
Income Investment to the
received Manager Administrator
£ £ £
Andershaw, Bishopthorpe, Brockaghboy, Church Hill, Corriegarth,
Crighshane, Douglas West, Glen Kyllachy
(1)
, Langhope Rig,
North Hoyle, Screggagh, Slieve Divena, Slieve Divena 2,
Stroupster, Tom nan Clach, Twentyshilling
(2)
, Windy Rig
(3)
: 864,312 432,156 432,156
£52,102 income receivable per wind farm per annum
£26,051 expenses payable to the Investment Manager per wind farm
per annum
£26,051 expenses payable to the Administrator per wind farm per annum
Bin Mountain, Braes of Doune, Carcant, Cotton Farm, Drone Hill,
Earl’s Hall Farm, Kildrummy, Maerdy, North Rhins, Sixpenny
Wood, Tappaghan, Yelvertoft:
£39,077 income receivable per wind farm per annum 468,922 156,307 312,615
£13,026 expenses payable to the Investment Manager per wind farm
per annum
£26,051 expenses payable to the Administrator per wind farm per annum
Dunmaglass Holdco, Stronelairg Holdco:
£7,848 income receivable per wind farm per annum
15,697 — 15,697
£nil expenses payable to the Investment Manager per wind farm
per annum
£7,848 expenses payable to the Administrator per wind farm per annum
Bicker Fen, Fenlands:
£2,997 income receivable per wind farm per annum
5,994 5,994 —
£2,997 expenses payable to the Investment Manager per wind farm
per annum
£nil expenses payable to the Administrator per wind farm per annum
Walney Holdco:
£19,746 income receivable per annum
19,746 9,873 9,873
£9,873 expenses payable to the Investment Manager per annum
£9,873 expenses payable to the Administrator per annum
Humber Holdco:
£7,744 income receivable per wind farm per annum
£nil expenses payable to the Investment Manager per wind farm
7,744 — 7,744
per annum
£7,744 expenses payable to the Administrator per wind farm per annum
Total 1,382,415 604,330 778,085
(1)
Acquired in December 2021. £53,396 income received and £26,698 paid to the Investment Manager during the year.
(2)
Acquired in June 2022. £27,157 income received and £13,579 paid to the Investment Manager during the year.
(3)
Acquired in December 2021. £54,326 income received and £27,163 paid to the Investment Manager during the year.
Notes to the Consolidated Financial Statements continued
For the year ended 31 December 2023
19. Related party transactions continued
The table below shows dividends received in the year from the Group’s investments.
For the year ended For the year ended
31 December 2023 31 December 2022
£’000 £’000
Humber Holdco
(1)
53,436 53,017
Clyde 46,776 51,055
Stronelairg Holdco
(2)
26,154 33,733
Walney Holdco
(3)
25,298 28,890
Hornsea 1 Holdco
(4)
16,842 —
North Hoyle 14,412 27,730
Braes of Doune 14,361 28,724
Brockaghboy 13,804 18,763
Corriegarth 13,097 32,463
Hoylake
(5)
12,583 7,342
Dunmaglass Holdco
(6)
11,298 13,177
ML Wind
(7)
10,143 16,317
Fenlands
(8)
9,515 16,937
SYND Holdco
(9)
9,430 18,695
Rhyl Flats 8,258 13,099
Stroupster 6,610 3,021
Little Cheyne Court 6,437 9,184
Windy Rig 5,277 14,942
Tappaghan 5,017 9,221
Andershaw 4,417 15,599
Slieve Divena 4,345 7,951
Maerdy 4,318 9,038
Twentyshilling 4,046 8,384
Bishopthorpe 3,944 7,952
Bicker Fen 3,770 6,382
Langhope Rig 3,475 9,287
Screggagh 3,404 6,477
Cotton Farm 2,960 4,467
Slieve Divena 2 2,732 5,490
Kildrummy 2,359 4,614
Crighshane 2,201 5,677
Glen Kyllachy 2,131 11,300
Earl's Hall Farm 1,788 2,264
Douglas West 1,500 14,250
Carcant 1,340 3,237
Bin Mountain 1,260 3,168
Church Hill 1,201 4,050
359,939 525,897
(1)
The Group’s investment in Humber Gateway is held through Humber Holdco.
(2)
The Group’s investment in Stronelairg is held through Stronelairg Holdco.
(3)
The Group’s investment in Walney is held through Walney Holdco.
(4)
The Group’s investment in Hornsea 1 is held through Hornsea 1 Holdco.
(5)
The Group’s investment in Burbo Bank Extension is held through Hoylake.
(6)
The Group’s investment in Dunmaglass is held through Dunmaglass Holdco.
(7)
The Group’s investments in Middlemoor and Lindhurst are held through ML Wind.
(8)
The Group’s investments in Deeping St. Nicholas, Glass Moor, Red House and Red Tile are held through Fenlands.
(9)
The Group’s investments in Drone Hill, North Rhins, Sixpenny Wood and Yelvertoft are held through SYND Holdco.
Notes to the Consolidated Financial Statements continued
For the year ended 31 December 2023
100
Greencoat UK Wind PLC Annual Report for the year ended 31 December 2023
101
G R E E N C O A T
U K W I N D
19. Related party transactions continued
The table below shows interest received in the year from the Group’s shareholder loan investments.
For the year ended For the year ended
31 December 2023 31 December 2022
£’000 £’000
Hoylake
(1)
10,662 6,706
Walney Holdco
(2)
9,994 11,244
Stronelairg Holdco
(3)
5,197 5,197
Clyde 4,283 4,206
South Kyle 4,239 —
Dunmaglass Holdco
(4)
3,412 3,412
Tom nan Clach 2,890 2,809
Glen Kyllachy 2,886 3,085
Corriegarth 2,805 2,658
London Array
(5)
2,605 —
Douglas West 2,532 2,947
Hornsea 1 Holdco
(6)
2,206 —
Andershaw 1,894 2,125
Windy Rig 1,850 2,309
Twentyshilling 1,473 1,005
Slieve Divena 2 1,340 1,329
Crighshane 1,257 1,283
Church Hill 843 944
Dalquhandy 417 —
62,785 51,259
(1)
The Group’s investment in Burbo Bank Extension is held through Hoylake.
(2)
The Group’s investment in Walney is held through Walney Holdco.
(3)
The Group’s investment in Stronelairg is held through Stronelairg Holdco.
(4)
The Group’s investment in Dunmaglass is held through Dunmaglass Holdco.
(5)
The Group’s investment in London Array is held through London Array Holdco.
(6)
The Group’s investment in Hornsea 1 is held through Hornsea 1 Holdco.
Notes to the Consolidated Financial Statements continued
For the year ended 31 December 2023
19. Related party transactions continued
The table below shows the Group’s shareholder loans with the wind farm investments.
Accrued
Loans at Loans Loans Loan Loans at interest at
1 January advanced restructured repayments 31 December 31 December
2023
(1)
in the year
(2)
in the year in the year 2023 2023 Total
£’000 £’000 £’000 £’000 £’000 £’000 £’000
Andershaw 32,641 — — (2,695) 29,946 135 30,081
Church Hill 13,830 — — (1,176) 12,654 2 12,656
Clyde 71,503 — — — 71,503 1,022 72,525
Corriegarth 42,553 — — — 42,553 70 42,623
Crighshane 20,497 — — (1,970) 18,527 — 18,527
Dalquhandy — 40,878 — — 40,878 987 41,865
Douglas West 43,248 — — (3,139) 40,109 — 40,109
Dunmaglass Holdco
(3)
56,864 — — — 56,864 860 57,724
Glen Kyllachy 48,776 — — (2,146) 46,630 — 46,630
Hornsea 1 Holdco
(4)
109,475 6,906 — (15,050) 101,331 34 101,365
Hoylake
(5)
178,120 1,239 — — 179,359 — 179,359
Kype Muir Extension 39,415 6,553 (15,809) — 30,159 152 30,311
London Array
(6)
— 146,987 — (13,718) 133,269 1,542 134,811
Slieve Divena 2 21,378 — — (706) 20,672 — 20,672
South Kyle — 208,505 — (1,714) 206,791 — 206,791
Stronelairg 86,619 — — — 86,619 1,310 87,929
Tom nan Clach 73,709 — — (7,885) 65,824 11 65,835
Twentyshilling 32,190 — — — 32,190 464 32,654
Walney Holdco
(7)
172,727 — — — 172,727 369 173,096
Windy Rig 36,772 — — — 36,772 369 37,141
1,080,317 411,068 (15,809) (50,199) 1,425,377 7,327 1,432,704
(1)
Excludes accrued interest at 31 December 2022 of £6,763,541.
(2)
Includes capitalised interest of £2,074,396 for Kype Muir Extension, £1,239,406 for Hoylake and £5,070,644 for Hornsea 1, plus a true-up
of £1,835,512 relating to the Hornsea 1 loan.
(3)
The Group’s investment in Dunmaglass is held through Dunmaglass Holdco.
(4)
The Group’s investment in Hornsea 1 is held through Hornsea 1 Holdco.
(5)
The Group’s investment in Burbo Bank Extension is held through Hoylake.
(6)
The Group’s investment in London Array is held through London Array Holdco.
(7)
The Group’s investment in Walney is held through Walney Holdco.
20. Ultimate controlling party
In the opinion of the Board, on the basis of the shareholdings advised to them, the Company has no ultimate
controlling party.
21. Subsequent events
On 29 January 2024, the Company announced a dividend of £79.1 million, equivalent to 3.43 pence per share
with respect to the quarter ended 31 December 2023, bringing the total dividend declared with respect to the
year to 31 December 2023 to 10 pence per share. The record date for the dividend was 16 February 2024 and
the payment date is 29 February 2024.
On 30 January 2024, the Company announced that Abigail Rotheroe will join the Board, effective from 1 March
2024.
Post year end, the Company had announced cumulative buybacks of 14 million shares between 1 January and
27 February 2024.
Notes to the Consolidated Financial Statements continued
For the year ended 31 December 2023
102
Greencoat UK Wind PLC Annual Report for the year ended 31 December 2023
103
G R E E N C O A T
U K W I N D
Directors (all non-executive)
Lucinda Riches C.B.E (Chairman)
Martin McAdam
Caoimhe Giblin
Nick Winser C.B.E.
Jim Smith
(1)
Shonaid Jemmett-Page
(2)
Investment Manager
Schroders Greencoat LLP
4th Floor, The Peak
5 Wilton Road
London
SW1V 1AN
Administrator and Company Secretary
Ocorian Administration (UK) Limited
Unit 4, The Legacy Building
Northern Ireland Science Park
Queen’s Road
Belfast
BT3 9DT
Depositary
Ocorian Depositary (UK) Limited
Unit 4, The Legacy Building
Northern Ireland Science Park
Queen’s Road
Belfast
BT3 9DT
Registrar
Computershare Limited
The Pavilions
Bridgwater Road
Bristol
BS99 6ZZ
Registered Company Number
08318092
Registered Office
5th Floor
20 Fenchurch Street
London
EC3M 3BY
Registered Auditor
BDO LLP
55 Baker Street
London
W1U 7EU
Joint Broker
RBC Capital Markets
100 Bishopsgate
London
EC2N 4AA
Joint Broker
Jefferies International Limited
100 Bishopsgate
London
EC2N 4JL
Company Information
(1)
Appointed to the Board with effect from 1 May 2023.
(2)
Retired from the Board with effect from 28 April 2023.
Under the Alternative Investment Fund Manager
Regulations 2013 (as amended) the Company is a UK
AIF and the Investment Manager is a full scope UK
AIFM.
Ocorian Depositary (UK) Limited provides depositary
services under the AIFMD.
The AIFMD outlines the required information which has
to be made available to investors prior to investing in
an AIF and directs that material changes to this
information be disclosed in the Annual Report of the
AIF. There were no material changes in the year.
All information required to be disclosed under the
AIFMD is either disclosed in this Annual Report or is
detailed within a schedule of disclosures on the
Company’s website at www.greencoat-ukwind.com.
The Investment Manager covers the potential
professional liability risks resulting from its activities by
holding professional indemnity insurance in
accordance with Article 9(7)(b) of AIFMD.
The information in this paragraph relates to the
Investment Manager, the AIFM, and its subsidiary
company providing services to the AIFM and it does
not relate to the Company. The total amount of
remuneration paid by the Investment Manager, in its
capacity as AIFM, to its 118 staff for the financial year
ending 31 December 2023 was £29.4 million,
consisting of £19.1 million fixed and £10.3 million
variable remuneration. The aggregate amount of
remuneration for the 14 staff members of the
Investment Manager constituting senior management
and those staff whose actions have a material impact
on the risk profile of the Company was £5.3 million.
These figures relate to the Investment Manager’s entire
AIFM business and not to the Company.
Supplementary Information (unaudited)
104
Greencoat UK Wind PLC Annual Report for the year ended 31 December 2023
105
G R E E N C O A T
U K W I N D
Annex V
Template periodic disclosure for the financial products referred to in
Article 9, paragraphs 1 to 4a, of Regulation (EU) 2019/2088 and Article 5,
first paragraph, of Regulation (EU) 2020/852
Product name: Greencoat UK Wind PLC (the “Company”)
Legal entity identifier: 213800ZPBBK8H51RX165
Sustainable investment objective
Did this financial product have a sustainable investment objective? (tick and fill in
as releva nt, the percentage figure re presents the minimum com mitment to
sustainable investments)
GG GG
YE
S
GG GG
NO
It promoted Environmental/Social
(E/S) characteristics and while it did
not have as its objective a sustainable
investment, it had a proportion of
___% of sustainable investmentss
with an environmental objective in
economic activities that qualify as
environmentally sustainable under
the EU Taxonomy
with an environmental objective
in economic activities that do
not qualify as environmentally
sustainable under the EU Taxonomy
with a social objective
It promoted E/S characteristics, but did
not make any sustainable investments
To what extent was the sustainable investment objective of this financial product met?
The Company invests in operating UK wind farms, supporting the transition to Net Zero.
The Company’s aim is to provide investors with an annual dividend per Ordinary Share
that increases in line with RPI inflation while preserving the capital value of its investment
portfolio on a real basis over the long term, through re-investment of excess cashflow.
The Company has sustainable investment as its objective within the meaning of Article 9
SFDR. More specifically, the Company is intended to contribute to the environmental
objective of climate change mitigation on the basis of the activities of the assets targeted
by the Company, which are wind power generation assets that help to facilitate the
transition to a low-carbon economy.
The Company does not have a carbon reduction objective and has not designated a
reference benchmark for the purpose of attaining the sustainable investment objective.
As at 31 December 2023, the Company’s portfolio comprises interests in 49 operating
wind farms totalling 2,007MW capacity.
It made sustainable investments with
a social objective: ___%
It made sustainable investments with
an environmental objective: 99%
in economic activities that qualify
as environmentally sustainable
under the EU Taxonomy
in economic activities that do not
qualify as environmentally
sustainable under the EU
Taxonomy
EU SFDR Disclosures (unaudited)
Sustainable investment
means an investment in
an economic activity
that contributes to an
environmental or social
objective, provided that
the investment does
not significantly harm
any environmental or
social objective and
that the investee
companies follow good
governance practices.
Sustainability indicators
measure how the
sustainable objectives
of this financial product
are attained.
The EU Taxonomy is a
classification system laid
down in Regulation (EU)
2020/852 establishing a
list of environmentally
sustainable economic
activities. That
Regulation does not lay
down a list of socially
sustainable economic
activities. Sustainable
investments with an
environmental objective
might be aligned with
the Taxonomy or not.
These sustainable investments contribute to the Company’s sustainable investment
objective as the electricity generated from wind farms can be used in place of non-
renewable energy sources, thereby helping to stabilise greenhouse gas concentrations in
the atmosphere and contributing to climate change mitigation. These investments are
considered environmentally sustainable in accordance with the technical screening criteria
of the EU Taxonomy relating to the environmental objective of climate change mitigation
and electricity generation from wind power.
GG
How
did the sustainability indicators perform?
The sustainability indicators used to measure attainment of the sustainable investment
objective of the Company performed as follows in the reporting period:
• Renewable energy generated: 4,743GWh
• Greenhouse gas emissions
(1)
avoided: 1.9 million tonnes CO
2
e
• Equivalent number of homes powered
(2)
: 1.8 million
Carbon footprint indicators are measured in line with the industry standard
Greenhouse Gas Protocol based on an equity control approach, meaning emissions
from the Group’s operations are weighted according to the Group’s proportionate
ownership in its SPV investments.
Scope emissions calculations are verified by third party consultants.
Scope 3 emissions are the result of activities from assets not owned or controlled by
the Group, but that the Group indirectly impacts in its value chain. Scope 3 emissions
include all sources not within the Group’s Scope 1 and 2 boundary and include, inter
alia, emissions arising from the construction of each wind farm acquired in 2023,
including those emissions associated with the manufacturing and transport of all
equipment and material, before the wind farm was commissioned as well as the
expected spare part provision throughout its lifetime.
GG
…a
nd compared to previous periods?
Sustainability Indicator 2023 2022
Renewable electricity generated (GWh) 4,743 4,362
Greenhouse gas emissions avoided (tCO
2
) 1.9 million 1.7 million
Equivalent number of homes powered 1.8 million 1.5 million
All indicators increased year-on-year reflecting the increase in operating capacity of
the Group resulting from new investments in the year. Relative to its MW capacity,
homes powered by the Group decreased as the annual average household
consumption in the UK fell from 2.9MWh to 2.7MWh per annum.
GG
Ho
w did the sustainable investments not cause significant harm to any
sustainable investment objective?
The Investment Manager has sought to ensure that the Company’s sustainable
investments cause no significant harm to any sustainable investment objective by
predominately investing in operating wind farms and by actively engaging and
managing sustainability risks and opportunities for the Company and its investments
prior to investment and on an ongoing basis once an investment has been made.
Prior to each investment, the Investment Manager’s Investment Committee,
responsible for the Company, considered the Company’s investment policy,
investment restrictions and the Company’s ESG Policy (a copy of which can be found
on the Company’s website, as well as the sustainability risks and opportunities
identified during due diligence (including by means of an ESG checklist).
EU SFDR Disclosures (unaudited) continued
(1)
This reflects CO
2
e savings calculated based on the thermal generation displaced. In the UK, this assumes the
displacement of CCGT generation at a carbon intensity factor of 0.4 kgCO
2
e/KWh (IEA).
(2)
Calculated based on average household consumption estimates. In the UK, this was 2.7MWh/annum (Ofgem).
Principal adverse
impacts are the most
significant negative
impacts of investment
decisions on
sustainability factors
relating to
environmental, social
and employee matters,
respect for human
rights, anti‐corruption
and anti‐bribery matters.
106
Greencoat UK Wind PLC Annual Report for the year ended 31 December 2023
107
G R E E N C O A T
U K W I N D
Each investment made is held through SPVs and the Investment Manager has
appointed senior representatives to each of the boards of those SPVs to oversee all
major strategic and operational decisions.
Sustainability risks and opportunities have been fully embedded into the risk
management framework at both Company and asset SPV level. A risk matrix has been
set up for each new SPV, which includes sustainability risks, and assesses risks (in
respect of the likelihood of its occurrence and the impact of its occurrence) on a
numerical scale.
Ongoing sustainability risks for the portfolio were monitored, managed and reported
on by the Investment Manager to the Company’s Board of Directors which has overall
responsibility for the activities of the Company and its investments.
During 2023, there were no material incidents across the portfolio. Specifically with
regards to health and safety, there were 30 workdays lost to injuries (based on
2 reportable lost time incidents). The Investment Manager continues its focus on
managing health and safety risks including regular training for asset managers and
Operations & Maintenance teams to promote a culture of reporting to improve
awareness and openness on the management of health and safety at sites. The
Investment Manager will continue to monitor health and safety performance of all
sites closely, in line with its ESG Policy commitments.
In addition, the Company complied with the principles of good governance contained
in the AIC Code, which ensures the Company is in accordance with the requirements
of the UK Corporate Governance Code and provides a framework of best practice
for listed investment companies.
GG
Ho
w were the indicators for adverse impacts on sustainability factors taken
into account?
The Investment Manager considers the Principal Adverse Impacts (“PAIs”) of its
investment decisions relating to the Company on sustainability factors and this informs
its approach to long term investment stewardship and stakeholder engagement.
As the Company predominantly targets investments in operating UK wind farms, the
PAIs that are most relevant to the Company include (but are not limited to):
• Greenhouse gas emissions (Table 1 RTS: PAIs 1-6); and
• Number of workdays lost to injuries, accidents, or illness (Table 3 RTS: PAI 3)
The Investment Manager sought to mitigate the impact of the PAIs and other
indicators considered in relation to the Company firstly by implementing the
Company’s ESG Policy, which has been developed in line with the Investment
Manager’s own ESG Policy. This sets guidance and principles for integrating
sustainability across the Company’s business and looks to establish best practice in
climate related risk management, reporting and transparency. It outlines areas of focus
for wind power generation assets including environment, workplace standards, health
and safety practices, governance (including compliance with applicable laws and
regulations) and local community engagements. It also includes a list of key
performance indicators that are monitored and reported on (as appropriate).
Sustainability factors were considered prior to investment as part of early stage
screening, detailed due diligence and the Investment Committee’s decision making,
and are managed post acquisition in accordance with the Investment Manager’s wider
asset management practices.
A statement on principal adverse impacts on sustainability factors (the “PAI
Statement”), including the list of PAI indicators and associated metrics considered in
relation to the Company, can be found on the Company’s website.
The Investment Manager considers the impacts reported within the PAI Statement
do not constitute significant harm to any sustainable investment objective, as further
described in the PAI Statement.
EU SFDR Disclosures (unaudited) continued
GG
We
re sustainable investments aligned with the OECD Guidelines for Multinational
Enterprises and the UN Guiding Principles on Business and Human Rights?
Details:
Yes – the Investment Manager believes that the Company’s sustainable investments
were aligned with the OECD Guidelines for Multinational Enterprises and the UN
Guiding Principles on Business and Human Rights (the “Minimum Safeguards”).
During 2023, the Investment Manager conducted initial due diligence (for new
investments) and ongoing monitoring (for existing investments) of the SPVs in which
the underlying wind assets are held to ensure their alignment with the Minimum
Safeguards.
Further, the Investment Manager ensured that the key service providers involved in the
operations, maintenance and management of the SPVs acquired in 2023 comply with
all applicable laws, rules, regulations and overarching principles in the countries where
they operate. This covers anti bribery and corruption, financial crime, data protection
and employment and health and safety laws (including those relating to human rights,
human trafficking, modern slavery, and public safety). This was achieved, where
possible, through the application of the Investment Manager’s ‘Code of Conduct’
Side Letter or otherwise provided for in the key service provider contracts, and
monitoring by the Investment Manager’s risk function.
There has been no material change to any existing service providers, or any reports
by the SPVs of any misalignment to the Minimum Safeguards.
For more information on how the sustainable investment objective of this financial
product was met, please refer to the Company’s ESG Report which can be found on
the Company’s website.
How did this financial product consider principal adverse impacts on sustainability
factors?
See the response to the question above “How were the indicators for adverse impacts on
sustainability factors taken into account.”
What were the top investments of this financial product?
Largest investments Sector % Assets Country
Hornsea 1 Wind 16% UK
Humber Gateway Wind 9% UK
London Array Wind 8% UK
Walney Wind 7% UK
Clyde Wind 7% UK
South Kyle Wind 6% UK
Stronelairg Wind 5% UK
Corriegarth Wind 4% UK
Burbo Bank Extension Wind 3% UK
Brockaghboy Wind 3% UK
What was the proportion of sustainability-related investments?
GG
Wh
at was the asset allocation?
Investments
#1 Sustainable
99%
Environmental
100%
Taxonomy-
aligned (100%)
#2 Not
sustainable 1%
#1 Sustainable
covers sustainable
investments with
environmental or
social objectives.
#2 Not sustainable
includes investments
which do not qualify
as sustainable
investments.
EU SFDR Disclosures (unaudited) continued
The list includes the
investments constituting
the greatest proportion
of investments of the
financial product during
the reference period:
Asset allocation
describes the share of
investments in specific
assets.
108
Greencoat UK Wind PLC Annual Report for the year ended 31 December 2023
109
G R E E N C O A T
U K W I N D
GG
In
which economic sectors were the investments made?
All of the Company’s investments are in the economic sector “electricity generation
from wind power” (activity 4.3 of the Climate Change Mitigation Technical Screening
Criteria).
To what extent were sustainable investments with an environmental objective aligned
with the EU Taxonomy?
GG
Di
d the financial product invest in fossil gas and/or nuclear energy related
activities complying with the EU Taxonomy
1
?
The Company did not make any investments in fossil gas or nuclear energy activities.
In line with its Investment Policy, the Company will only invest in UK wind farms.
The graphs below show in green the percentage of investments that were aligned
with the EU Taxonomy. As there is no appropriate methodology to determine the
taxonomy alignment of sovereign bonds*, the first graph shows the Taxonomy
alignment in relation to all the investments of the financial product including
sovereign bonds, while the second graph shows the Taxonomy alignment only in
relation to the investments of the financial product other than sovereign bonds.
1. Taxonomy-alignment of investments 2. Taxonomy-alignment of investments
including sovereign bonds* excluding sovereign bonds*
*For the purpose of these graphs, ‘sovereign bonds’ consist of all sovereign exposures.
GG
Wh
at was the share of investments made in transitional and enabling activities?
All activities of the Company are low carbon activities so the share of investments in
transitional and enabling activities is zero.
GG
Ho
w did the percentage of investments aligned with the EU Taxonomy compare
with previous reference periods?
Not applicable as this is the Company’s first report produced with respect to the EU
Taxonomy alignment of the Company’s investments.
Turnover
CapEx
OpEx
Taxonomy aligned investments
Other investments
0% 20% 40% 60% 80% 100%
100%
100%
100%
Turnover
CapEx
OpEx
Taxonomy aligned investments
Other investments
0% 20% 40% 60% 80% 100%
100%
100%
100%
EU SFDR Disclosures (unaudited) continued
Taxonomy-aligned
activities are expressed
as a share of:
• turnover reflecting
the share of revenue
from green activities
of investee
companies.
• capital expenditure
(CapEx) showing the
green investments
made by investee
companies, e.g. for a
transition to a green
economy.
• operational
expenditure (OpEx)
reflecting green
operational activities
of investee
companies.
1
Fossil gas and/or nuclear related activities will only comply with the EU Taxonomy where they contribute to
limiting climate change (“climate change mitigation”) and do no significant harm to any EU Taxonomy
objective – see explanatory note in the left hand margin. The full criteria for fossil gas and nuclear energy
economic activities that comply with the EU Taxonomy are laid down in the Commission Delegated Regulation
(EU) 2022/1214
What was the share of sustainable investments with an environmental objective that
were not aligned with the EU Taxonomy
There was no share of sustainable investments with an environmental objective that were
not aligned with the EU Taxonomy. 100 per cent of the Company’s sustainable investments
are in wind generation assets which are considered aligned with the EU Taxonomy in
accordance with the relevant Technical Screening Criteria for climate change mitigation
(activity 4.3).
What was the share of socially sustainable investments?
0 per cent of the Company’s investments are socially sustainable investments. The
Company does not target sustainable investments with a social objective.
What investments were included under “not sustainable”, what was their purpose
and were there any minimum environmental or social safeguards?
The investments included under “#2 Not sustainable” comprise cash collateral reserves (to
the extent not generated from sustainable investments).
In 2023, “not sustainable” assets were 1 per cent of the Company’s NAV and reflected
cash collateral reserves. Given the purpose of these investments, there were no minimum
environmental and social safeguards applied to such investments.
What actions have been taken to attain the sustainable investment objective during
the reference period?
The Investment Manager sought to attain the Company’s sustainable investment objective
by implementing the binding elements described in the Company’s pre contractual
disclosures (Annex 3 RTS) on a continuous basis, and by integrating sustainability risks in
its investment decision making as described above: “How did the sustainable investments
not cause significant harm to any sustainable investment objective?”.
The Company continues to invest in further operating wind farms and in construction
projects to increase its renewable energy generation capacity.
In 2023, the Investment Manager continued to enhance its processes to measure and
monitor the application of the binding elements. For example, the Investment Manager’s
ESG Policy, upon which the Company’s ESG Policy has been developed, was updated
again in Q4 2023 to incorporate the Investment Manager’s approach to good governance
and minimum safeguards.
Further, the Investment Manager continued to engage with stakeholders relevant to the
Group’s portfolio to ensure its renewable investments positively impact the local
communities in which they operate. Sustainability related risks and challenges were
regularly discussed within the Investment Manager’s asset management teams, which were
also reported to and discussed with the Board through regular meetings and specific risk
register review discussions. Key sustainability factors such as those relating to health and
safety, compliance with environmental standards and stakeholder relations were regularly
discussed and documented.
EU SFDR Disclosures (unaudited) continued
110
Greencoat UK Wind PLC Annual Report for the year ended 31 December 2023
How did this financial product perform compared to the reference sustainable
benchmark?
Not applicable (N/A) as the Company does not have a carbon reduction objective and is
not managed against a reference benchmark
GG
Ho
w did the reference benchmark differ from a broad market index?
N/A
GG
Ho
w did this financial product perform with regard to the sustainability indicators
to determine the alignment of the reference benchmark with the sustainable
investment objective?
N/A
GG
How
did this financial product perform compared with the reference benchmark?
N/A
GG
How
did this financial product perform compared with the broad market index?
N/A
111
G R E E N C O A T
U K W I N D
EU SFDR Disclosures (unaudited) continued
112
Greencoat UK Wind PLC Annual Report for the year ended 31 December 2023
Statement on principal adverse impacts “PAIs” of investment decisions
on sustainability factors
Financial Product:
Greencoat UK Wind PLC (LEI: 213800ZPBBK8H51RX165) (the “Company”), managed by Schroders Greencoat
LLP (the “Investment Manager”)
1. Summary
The Investment Manager considers PAIs of its investment decisions on sustainability factors in relation to the
Company. The present statement is the consolidated statement on PAIs on sustainability factors of the Company.
This statement on principal adverse impacts on sustainability factors of the Company covers the reference period
from 1 January to 31 December 2023.
The adverse sustainability indicators applicable to investee companies considered by the Investment Manager are
summarised in the table below (including the relevant table and number associated with the adverse sustainability
indicators listed in Annex I of the RTS
(1)
).
RTS RTS
Annex I Annex I
Theme Adverse Sustainability Indicator Table Number
Greenhouse gas (“GHG”) emissions 11
Carbon footprint 12
GHG intensity of investee companies 13
Exposure to companies active in the fossil fuel sector 14
Share of non-renewable energy consumption and production 15
Energy consumption intensity per high impact climate sector 16
Emissions to water 18
Hazardous waste and radioactive waste ratio 19
Natural species and protected areas 2 14
Violations of UN Global Compact principles and Organisation for
Economic Cooperation and Development (OECD) Guidelines for
Multinational Enterprises 1 10
Lack of processes and compliance mechanisms to monitor
compliance with UN Global Compact principles and OECD
Guidelines for Multinational Enterprises 1 11
Exposure to controversial weapons (anti-personnel mines,
cluster munitions, chemical weapons and biological weapons) 1 14
Number of days lost to injuries, accidents, fatalities or illness 33
Lack of a supplier code of conduct 34
Lack of anti corruption and anti-bribery policies 3 15
Social and
employee, respect
for human rights,
anti corruption and
anti bribery
matters
Climate and other
environment-related
indicators
EU SFDR Disclosures (unaudited) continued
(1)
The Regulatory Technical Standards accompanying the EU Sustainable Finance Disclosure Regulation.
113
G R E E N C O A T
U K W I N D
Actions taken,
and actions planned
Impact Impact and targets set for the
Adverse sustainability indicator Metric 2023 2022 Explanation next reference period
1. GHG emissions Scope 1 GHG emissions 13 tonnes 149 tonnes
of CO
2
of CO
2
Scope 2 GHG emissions 1,485 tonnes 1,422 tonnes
of CO
2
of CO
2
(market-based) (market-based)
2,162 tonnes 1,731 tonnes
of CO
2
of CO
2
(location-based) (location-based)
Scope 3 GHG emissions 261,138 tonnes 136,161 tonnes
of CO
2
of CO
2
Total GHG emissions 262,637 tonnes 137,732 tonnes
of CO
2
of CO
2
2. Carbon footprint Carbon footprint 42.9 tonnes 24.6 tonnes
of CO
2
of CO
2
3. GHG intensity GHG intensity of 1,193 tonnes 535 tonnes
of investee investee companies of CO
2
of CO
2
/
companies £ million
revenue
Greenhouse
gas
emissions
Carbon footprint
indicators are measured
in line with the industry
standard GHG Protocol
based on an equity
control approach,
meaning emissions from
the Group’s operations
are weighted according
to the Group’s SPV
ownership interest.
Scope emissions
calculations are verified
by third party
consultants.
Scope 3 emissions are
the result of activities
from assets not owned or
controlled by the Group,
but that the Group
indirectly impacts in its
value chain. Scope 3
emissions include all
sources not within the
Company’s Scope 1 and
2 boundary and include,
inter alia, emissions
arising from the
construction of each wind
farm acquired in 2023,
including those emissions
associated with the
manufacturing and
transport of all
equipment and material,
before the wind farm was
commissioned as well as
the expected spare part
provision throughout its
lifetime.
The GHG emissions of
the Company increased
year on year. This was
mostly driven by Scope 3
emissions which reflects
the purchase of new
assets for which carbon
emissions reflect those
associated with the
original construction
(embodied emissions) of
those assets. More detail
on the drivers of
emissions can be found
in the historical
comparison section on
pages 120 to 121.
In 2023, the Investment
Manager worked to
reduce GHG emissions
associated with Scope 2
by switching import
electricity consumption
for 16% of the assets in
its portfolio to fully
renewable tariffs. Based
on the switching of tariffs
for these assets, using
2022 reported Scope 2
carbon emissions for the
Group’s portfolio, this
initiative resulted in a
reduction of 227tCO
2
, a
16% reduction from the
total portfolio Scope 2
emissions on a like-for-
like basis. The asset
management team will
continue to work with
the Investment Manager
to switch import
electricity tariffs to fully
renewable as contracts
come up for renewal in
2024. The team will also
consider engaging with
co-investors for joint
venture investments to
try to switch tariffs and
consider opportunities
to reduce Scope 1
emissions.
2. Description of the PAIs on sustainability factors
EU SFDR Disclosures (unaudited) continued
EU SFDR Disclosures (unaudited) continued
114
Greencoat UK Wind PLC Annual Report for the year ended 31 December 2023
Actions taken,
and actions planned
Impact Impact and targets set for the
Adverse sustainability indicator Metric 2023 2022 Explanation next reference period
4. Exposure to Share of investments in 0% 0%
companies active companies active in the
in the fossil fossil fuel sector
fuel sector
5. Share of non Share of non renewable Production Production
renewable energy energy consumption share: share:
consumption and non renewable 0% non 0% non
and production energy production of renewable. renewable.
investee companies Consumption Consumption
from non renewable share: share:
energy sources 41.9% non 38% non
compared to renewable renewable. renewable.
energy sources,
expressed as a
percentage of total
energy sources
6. Energy Energy consumption in N/A N/A
consumption MWh per million GBP
intensity per high of revenue of investee
impact climate companies, per high
sector impact climate sector
Water 8. Emissions to Tonnes of emissions to N/A N/A
water water generated by
investee companies
per million GBP invested,
expressed as a weighted
average
Waste 9. Hazardous waste Tonnes of hazardous N/A N/A
and radioactive waste and radioactive
waste ratio waste generated by
investee companies
per million GBP invested,
expressed as a weighted
average
There was a very minor
spill of oil at a wind
turbine site in 2023 of
0.045 tonnes which was
reported to SEPA.
Remediation actions
were implemented
immediately by the
Operations Manager on
site and the incident has
been closed. Learnings
were identified by the
Investment Manager to
prevent similar incidents
at other sites.
On a tonnes per million
invested basis this has
been considered not
material enough to
report.
PAI 8 is considered not
relevant for the porfolio
as the investments do
not produce emissions
to water.
PAI 6 is considered not
relevant for the portfolio
as the investment assets
are in high impact
climate sectors.
Greenhouse
gas
emissions
continued
The Group does not have
any exposure to the fossil
fuel sector and will only
invest in UK wind farms in
accordance with its
Investment Objective and
Investment Policy.
The Investment Manager
continues to screen all
investments against this
exclusion list as part of
initial investment
screening.
With regards to non-
renewable energy
consumption, see the
comment in relation to
PAIs 1-3 above
The Group’s wind farm
portfolio generates
renewable electricity that
avoids the carbon
emissions and air
pollution that would have
otherwise been
generated using fossil
fuels. These assets
consume electricity in the
generation of renewable
electricity.
115
G R E E N C O A T
U K W I N D
EU SFDR Disclosures (unaudited) continued
Actions taken,
and actions planned
Impact Impact and targets set for the
Adverse sustainability indicator Metric 2023 2022 Explanation next reference period
10. Violations of Share of investments in Data not Data not
UN Global investee companies that available available
Compact have been involved in
principles and violations of the UNGC
Organisation principles or OECD
for Economic Guidelines for
Cooperation Multinational Enterprises
and
Development
(OECD)
Guidelines for
Multinational
Enterprises
Social and
employee
matters
The Company invests in
UK wind farms which are
held through special
purpose vehicles
(“SPVs”), which are
standalone legal entities
that typically do not have
any employees. The SPVs
outsource all operations,
maintenance and
management activities to
third parties, through
long term contracts.
The Investment Manager
conducts initial due
diligence and provides
ongoing monitoring of
SPVs to ensure their
alignment with the
Minimum Safeguards.
Where possible, the
Investment Manager
imposed obligations on
the key service providers
involved in the
operations and
management of the SPVs
to ensure their ongoing
compliance. In most
instances, this was
achieved by the
Investment Manager’s
‘Code of Conduct Side
Letter’ (or an equivalent
standard) which requires
key service providers to
comply with all applicable
laws, rules, regulations
and overarching
principles in the countries
where they operate
(which includes the
Minimum Safeguards).
This covers anti bribery
and corruption, financial
crime, data protection
and employment and
health and safety laws
(including those relating
to human rights, human
trafficking, modern
slavery, and public
safety).
In 2023, the Investment
Manager adopted the
Schroders Group’s
Global Norms
Framework to support in
the identification of
companies and
investments deemed in
breach of OECD and
UNGC principles and
updated the Investment
Manager’s Greencoat
ESG Policy to reflect
this.
The ultimate output of
this framework is the
Global Norms list which
comprises a list of
companies that have:
been identified as
causing significant
damage; not sufficiently
addressed the issue in
question through
transparent
communication and
action; and not provided
sufficient remedy for
affected stakeholders.
This list is then applied
as an exclusion criteria
for Article 9 funds to
ensure that investments
in scope adhere to the
‘Do No Significant Harm’
element of SFDR.
In addition to the Global
Norms process noted
above, the Investment
Manager is working to
develop a standard
methodology to assess
the alignment of the key
service providers with
the OECD Guidelines for
Multinational Enterprises
and the UN Guiding
Principles on Business
and Human Rights. This
commenced in 2023 and
the Investment Manager
expects the
methodology to be
completed and
implemented in 2024.
EU SFDR Disclosures (unaudited) continued
116
Greencoat UK Wind PLC Annual Report for the year ended 31 December 2023
Actions taken,
and actions planned
Impact Impact and targets set for the
Adverse sustainability indicator Metric 2023 2022 Explanation next reference period
11. Lack of processes Share of investments Data not Data not
and compliance in investee companies available available
mechanisms without policies to
to monitor monitor compliance with
compliance with the UNGC principles or
UN Global OECD Guidelines for
Compact Multinational Enterprises
principles or grievance/complaints
and OECD handling mechanisms to
Guidelines for address violations of the
Multinational UNGC principles or
Enterprises OECD Guidelines for
Multinational Enterprises
14. Exposure to Share of investments 0% 0%
controversial in investee companies
weapons involved in the
(anti-personnel manufacture or selling of
mines, cluster controversial weapons
munitions,
chemical
weapons and
biological
weapons)
14. Natural species
and protected
areas
Water, waste
and material
emissions
Share of investments in
investee companies
whose operations
affect threatened
species
Share of investments in
investee companies
without a biodiversity
protection policy
covering operational
sites owned, leased,
managed in a
protected area or an
area of high
biodiversity value
outside protected
areas
N/A
Percentage of
SPV
investments
without
habitat
management
plans , or any
environmental
planning
requirements,
in place: 0%
N/A
Percentage of
SPV
investments
without
habitat
management
plans, or any
environmental
planning
requirements,
in place: 0%
All habitat management
plans are agreed for
relevant sites to ensure
that the environment in
and surrounding each
wind farm is carefully
protected.
Wind farms have the
potential to have a
negative environmental
impact through the
manufacturing and supply
chain process or locally
through the ongoing
management of the
projects. The Company’s
ESG policy helps to
mitigate against these
risks. The policies in place
outline the environmental
standards the Company
aims to meet.
The Investment Manager
continues to carry out due
diligence on new
investments relating to
environmental and
biodiversity-related risks
and is committed to
implementing any
regulatory obligations
regarding habitat and
environmental
management.
There was and continues
to be a strong
commitment to
continuous improvement
of environmental
management.
Exposure to controversial
weapons is not within the
Company’s Investment
Objective and not
permissible within its
Investment Policy.
The Investment Manager
continues to screen all
investments against this
exclusion list as part of
initial investment
screening.
Social and
employee
matters
(continued)
The Investment Manager
is currently enhancing its
processes to monitor
service provider’s
adherence to compliance
with UNGC principles
and OECD Guidelines
through updates to the
Code of Conduct. The
Investment Manager
commenced this project
in 2023, including
external legal guidance,
and will finalise the
updated Code of
Conduct in 2024 before
working to roll out the
updated version to all
service providers.
117
G R E E N C O A T
U K W I N D
EU SFDR Disclosures (unaudited) continued
Actions taken,
and actions planned
Impact Impact and targets set for the
Adverse sustainability indicator Metric 2023 2022 Explanation next reference period
3. Number of days Number of workdays Number of Number of
lost to injuries, lost to injuries, workdays workdays
accidents, accidents, or illness lost: 30 lost: 41
fatalities or illness in investee companies
This figure is
restated.
Social and
employee
matters
A set of KPIs to
improve health and
safety management
and performance is
monitored
continuously. These are
reported at least on a
monthly basis directly
to the Investment
Manager, the Directors
of the SPVs, and the
Board.
The Investment Manager
has stringent health and
safety policies and
processes in place,
which include safety
statements, a Schroders
Capital Health and
Safety Forum,
incidents/developing
trends reports, site visits,
onboarding and training,
and audits by both
operating managers and
accredited professionals.
There is a nominated
health and safety
director for each fully
owned wind farm SPV.
The Investment
Manager’s asset
management teams are
responsible for the day
to day implementation
and monitoring of health
and safety audits and
initiatives. The Board
also reviews health and
safety matters at each of
its scheduled meetings.
The Investment Manager
continued to apply the
policies and processes
referenced above in
2023 and will continue
to apply these in 2024,
using learnings from
audits and trend reports
to continue to enhance
its approach.
In 2023, the Company
began vertical audits to
its contractors (the
Investment Manager’s
asset management team
and O&M partners) with
Quadriga to ensure that
all elements of their
health and safety
management systems
remain fit for purpose.
The Investment Manager
audited 16 service
providers in total.
Similarly, HV
management systems of
5 of our HV operators
were audited by a
specialist HV auditor.
118
Greencoat UK Wind PLC Annual Report for the year ended 31 December 2023
Actions taken,
and actions planned
Impact Impact and targets set for the
Adverse sustainability indicator Metric 2023 2022 Explanation next reference period
4. Lack of a supplier Share of investments in Data not Data not
code of conduct investee companies available available
without any supplier
code of conduct
(against unsafe working
conditions, precarious
work, child labour and
forced labour)
Anti 15. Lack of anti Share of investments 0% 0%
corruption corruption and in entities without
and anti anti bribery policies on anti
bribery policies corruption and anti
bribery consistent
with the United
Nations Convention
against Corruption
Upon acquisition, all
wholly owned SPV’s
adopt the policies of
the Company including
anti-corruption and
anti-bribery. These
policies are regularly
reviewed by legal
experts, and are
updated for new
legislation and new
geographies.
The Investment Manager
is currently enhancing its
processes to monitor
service provider’s
adherence to compliance
with UNGC principles
and OECD Guidelines
through updates to the
Code of Conduct. The
Investment Manager
commenced this project
in 2023, including
external legal counsel
guidance, and will finalise
the updated Code of
Conduct in 2024.
The Manager will work to
roll out the updated
version to all service
providers.
Upon acquisition, all
wholly owned SPV’s
adopt the policies of
the Company including
the ESG Policy which
states expectations
regarding service
providers in relation to
legal and regulatory
obligations related to
ESG matters.
Where possible, the
Investment Manager
imposes obligations on
the key service
providers involved in
the operations and
management of the
portfolio to ensure their
ongoing compliance. In
most instances, this was
achieved by the
Investment Manager’s
‘Code of Conduct Side
Letter’ (or an equivalent
standard) which
requires key service
providers to comply
with all applicable laws,
rules, regulations and
overarching principles
in the countries where
they operate (which
includes the Minimum
Safeguards). This covers
anti bribery and
corruption, financial
crime, data protection
and employment and
health and safety laws
(including those relating
to human rights, human
trafficking, modern
slavery, and public
safety).
Social and
employee
matters
(continued)
EU SFDR Disclosures (unaudited) continued
119
G R E E N C O A T
U K W I N D
3. Description of policies to identify and prioritise principal adverse impacts on sustainability factors
The Investment Manager seeks to mitigate the impact of PAIs and other indicators considered in relation to the
Company initially by implementing the Company’s ESG Policy. The Company’s ESG Policy, which has been
developed in line with the Investment Manager’s ESG Policy (a copy of which can be found on the Investment
Manager’s website), sets guidance and principles for integrating sustainability across the Company’s business
and looks to establish best practice in climate related risk management, reporting and transparency. It outlines
areas of focus for wind farms including environment, workplace standards, health and safety practices, governance
(including compliance with applicable laws and regulations) and local community engagement. It also includes a
list of KPIs that are monitored and reported on as appropriate. Sustainability factors are considered prior to
investment as part of early stage screening, detailed due diligence and the Investment Manager’s Investment
Committee’s decision making, and managed, post acquisition, in accordance with the Investment Manager’s
wider asset management practices.
The Company’s ESG Policy is reviewed at least annually by the Investment Manager’s ESG Committee and
approved by the Board. It was last approved in November 2023.
In implementing its approach to integrating sustainability and the consideration of PAIs on sustainability factors,
the Investment Manager does not rely on a dedicated team, but rather responsibilities are shared on a holistic
basis:
• the investment and asset management team (as the first line of defence) who embed sustainability practices
(including the consideration of PAIs on sustainability factors) into their investment decision making and
ongoing management of the assets;
• a dedicated ESG Committee focused on developing the ESG Policy with support from the sustainability
team;
• the Investment Committees; and
• a Valuation Committee independent of portfolio management and the Investment Manager’s Risk
Management Committee (as overseen by the AIFM).
Sustainability related risks and challenges are regularly discussed within the Investment Manager’s asset
management team and are also reported to and discussed with the Board at quarterly meetings. A specific risk
matrix is also reviewed and approved on an annual basis by the Board. Key sustainability factors such as those
relating to health and safety, compliance with environmental standards and stakeholder relations are regularly
discussed and documented.
The boards of each SPV are responsible for ensuring sustainability factors are considered in the context of the
operational performance, business objectives and broader stakeholder relationships. During the holding period,
representatives of the Investment Manager will take one or more seats on the board of each SPV and will oversee
all major strategic and operational decisions. Given this structure, outside health and safety risks and
organisational (including governance) risks within the SPVs are limited. None of the SPVs have employees or
management teams and therefore any employee related social factors are focused on the third party service
providers.
The Investment Manager’s ESG Committee is responsible for (i) determining the ESG Policy and reviewing it
regularly to ensure it remains relevant to evolving conditions, (ii) developing and evolving sustainability integration
practices for material sustainability factors within the different businesses and assets, (iii) leveraging existing
resources and research capabilities on sustainability related topics for the benefit of the investment management
team, and (iv) promoting education and awareness of sustainability trends and developments and sharing best
practice.
The Investment Manager uses information provided directly from wind farm SPVs in relation to the PAIs. In order
to ensure data quality, the Investment Manager works with specialist external advisers, such as environmental
consultants. These advisers review the Investment Manager’s methodologies for identifying and prioritising PAIs
and advise on industry best practices.
EU SFDR Disclosures (unaudited) continued
The data collected as described above is processed as follows:
• KPI data is sourced directly from SPVs and supplemented by specialist external advisers such as environmental
consultants, as required;
• operations and maintenance service providers used by the SPVs report to the Investment Manager, on a
monthly basis, on a standard set of KPIs and qualitative factors, such as health and safety, compliance with
relevant laws and regulations, local community engagement and habitat management, where relevant; and
• carbon footprint indicators are measured in line with the industry standard GHG Protocol based on an equity
control approach, meaning emissions from the Company’s operations are weighted according to the
Company or its SPV’s ownership interest. Scope emissions calculations will be verified by third party
consultants.
In some instances, the Company may need to use estimates or proxy data. Where estimated data is used it will
typically represent the minority of data used and will be based upon reasonable assumptions and appropriate
comparators. The Board and the Investment Manager will act reasonably in using estimated or proxy data. As the
use of such data will vary on a case by case basis, it is not possible to provide a proportion of estimated data.
Engagement policies
The Company is committed to engaging with all stakeholders relevant to its portfolio to ensure its renewable
investments positively impact the communities in which they operate. The Board and Investment Manager
recognise that engagement is critical to long term sustainable investment and seek to build strong, long term
relationships with high quality, experienced counterparties to give consistency of service and standards.
References to international standards
The Company proactively engages with the following responsible business codes and/or internationally
recognised standards to promote sustainable investment practices, as discussed in the Company’s ESG report
available on its website:
1. Task Force on Climate Related Financial Disclosures (“TCFD”)
Relevant for Table 1, PAI 1-5 (Greenhouse gas emissions)
The Company aligns with the TCFD recommendations and makes disclosures in the Strategic Report on pages 29
to 36. These disclosures report on climate change related impacts, opportunities and risks to the Company. Given
the Company’s long term investment perspective, the Board and the Investment Manager constantly assess the
risks its portfolio might be exposed to and factors them into decision making and risk monitoring.
Historical comparison
Please refer to Table 1 for historical data comparison.
Specifically in relation to health and safety, in 2023 there were 30 workdays lost to injuries (based on 2 reportable
lost time incidents) in 2023. This decreased from 2022, with 41 workdays lost to injuries (based on 6 reportable
lost time incidents). The Investment Manager continues its focus on managing health and safety risks including
regular training for asset managers and Operations & Maintenance teams to promote a culture of reporting to
improve awareness and openness on the management of health and safety at sites. The Manager will continue
to monitor health and safety performance of all sites closely, in line with its ESG Policy commitments.
In 2023, the Company began vertical audits to its contractors (Asset managers and O&M) with Quadriga at a
corporate level, to ensure that all elements of their health and safety management systems remain fit for purpose.
The Investment Manager audited 16 service providers in total. Similarly, the HV management systems of 5 HV
operators were audited by a specialist HV auditor.
EU SFDR Disclosures (unaudited) continued
120
Greencoat UK Wind PLC Annual Report for the year ended 31 December 2023
121
G R E E N C O A T
U K W I N D
EU SFDR Disclosures (unaudited) continued
The Company had a 91 per cent increase in total scope 1-3 emissions in 2023, compared with the previous
reporting year. The largest increase was due to a 108 per cent increase in scope 3 embodied carbon emissions,
the indirect emissions associated with the construction phase of infrastructure investments. Scope 3 embodied
carbon emissions must be accounted for in the year an asset is acquired, and are not amortised for the year the
asset is bought, under GHG Protocol guidance. The Company has concerns that this leads to double counting
across the wind industry supply chain.
Scope 1 emissions decreased by 92 per cent as a result of a reduction in SF6 leakages. Scope 2 emissions
increased by 29 per cent due to an increase in electricity imported as a result of growth in the portfolio’s operating
capacity. In 2023, the Company worked to switch electricity consumption for 16 per cent of the assets in its
portfolio to fully renewable tariffs. The asset management team will continue to work to switch electricity tariffs
to fully renewable as contracts come up for renewal, including for new assets purchased. The team will also
consider engaging with co-investors for JV assets to try to switch tariffs.
EU SFDR Disclosures (unaudited) continued
Annex
Defined terms used in this statement
For the purposes of this statement, the following definitions shall apply:
(1) Scope 1, 2 and 3 GHG emissions means the scope of greenhouse gas emissions referred to in points
(1)(e)(i) to (iii) of Annex III to Regulation (EU) 2016/1011 of the European Parliament and of the Council
(2)
;
(2) Greenhouse gas (“GHG”) emissions means greenhouse gas emissions as defined in Article 3, point (1), of
Regulation (EU) 2018/842 of the European Parliament and of the Council
(3)
;
(3) Weighted average means a ratio of the weight of the investment by the financial market participant in a
investee company in relation to the GAV of the investee company;
(4) Companies active in the fossil fuel sector means companies that derive any revenues from exploration,
mining, extraction, production, processing, storage, refining or distribution, including transportation,
storage and trade, of fossil fuels as defined in Article 2, point (62), of Regulation (EU) 2018/1999 of the
European Parliament and of the Council
(4)
;
(5) Renewable energy sources means renewable non fossil sources, namely wind, solar (solar thermal and
solar photovoltaic) and geothermal energy, ambient energy, tide, wave and other ocean energy,
hydropower, biomass, landfill gas, sewage treatment plant gas, and biogas;
(6) Non renewable energy sources means energy sources other than those referred to in point (5);
(7) Energy consumption intensity means the ratio of energy consumption per unit of activity, output or any
other metric of the investee company to the total energy consumption of that investee company;
(8) Protected area means designated areas in the European Environment Agency’s Common Database on
Designated Areas (CDDA);
(9) High impact climate sectors means the sectors listed in Sections A to H and Section L of Annex I to
Regulation (EC) No 1893/2006 of the European Parliament and of the Council
(5)
;
(10) Area of high biodiversity value outside protected areas means land with high biodiversity value as
referred to in Article 7b(3) of Directive 98/70/EC of the European Parliament and of the Council
(6)
;
(11) Emissions to water means direct emissions of priority substances as defined in Article 2(30) of Directive
2000/60/EC of the European Parliament and of the Council
(7)
and direct emissions of nitrates, phosphates
and pesticides;
(12) Hazardous waste means hazardous waste as defined in Article 3(2) of Directive 2008/98/EC of the European
Parliament and of the Council
(8)
;
(2)
Regulation (EU) 2016/1011 of the European Parliament and of the Council of 8 June 2016 on indices used as benchmarks in financial
instruments and financial contracts or to measure the performance of investment funds and amending Directives 2008/48/EC and
2014/17/EU and Regulation (EU) No 596/2014 (OJ L 171, 29.6.2016, p. 1).
(3)
Regulation (EU) 2018/842 of the European Parliament and of the Council of 30 May 2018 on binding annual greenhouse gas emission
reductions by Member States from 2022 to 2030 contributing to climate action to meet commitments under the Paris Agreement and
amending Regulation (EU) No 525/2013 (OJ L 156, 19.6.2018, p. 26).
(4)
Regulation (EU) 2018/1999 of the European Parliament and of the Council of 11 December 2018 on the Governance of the Energy Union
and Climate Action, amending Regulations (EC) No 663/2009 and (EC) No 715/2009 of the European Parliament and of the Council,
Directives 94/22/EC, 98/70/EC, 2009/31/EC, 2009/73/EC, 2010/31/EU, 2012/27/EU and 2013/30/EU of the European Parliament and of
the Council, Council Directives 2009/119/EC and (EU) 2015/652 and repealing Regulation (EU) No 525/2013 of the European Parliament
and of the Council (OJ L 328, 21.12.2018, p. 1).
(5)
Regulation (EC) No 1893/2006 of the European Parliament and of the Council of 20 December 2006 establishing the statistical classification
of economic activities NACE Revision 2 and amending Council Regulation (EEC) No 3037/90 as well as certain EC Regulations on specific
statistical domains Text with EEA relevance (OJ L 393, 30.12.2006, p. 1–39).
(6)
Directive 98/70/EC of the European Parliament and of the Council of 13 October 1998 relating to the quality of petrol and diesel fuels
and amending Council Directive 93/12/EEC (OJ L 350, 28.12.1998, p. 58).
(7)
Directive 2000/60/EC of the European Parliament and of the Council of 23 October 2000 establishing a framework for Community action
in the field of water policy (OJ L 327, 22.12.2000, p. 1).
(8)
Directive 2008/98/EC of the European Parliament and of the Council of 19 November 2008 on waste and repealing certain Directives (OJ
L 312, 22.11.2008, p. 3).
122
Greencoat UK Wind PLC Annual Report for the year ended 31 December 2023
123
G R E E N C O A T
U K W I N D
(13) Radioactive waste means radioactive waste as defined in Article 3(7) of Council Directive
2011/70/Euratom
(9)
;
(14) Threatened species means endangered species, including flora and fauna, listed in the European Red List
or the IUCN Red List, as referred to in Section 7 of Annex II to Delegated Regulation (EU) 2022/2139;
(15) UN Global Compact principles means the ten Principles of the United Nations Global Compact; and
(16) Board means the Directors of the Company.
For the purposes of this Annex, the following formulas shall apply:
(1) ‘GHG emissions’ shall be calculated in accordance with the following formula:
(2) ‘carbon footprint’ shall be calculated in accordance with the following formula:
(3) ‘GHG intensity of investee companies’ shall be calculated in accordance with the following formula:
(4) ‘GHG intensity of sovereigns’ shall be calculated in accordance with the following formula:
(5) ‘inefficient real estate assets’ shall be calculated in accordance with the following formula:
For the purposes of the formulas, the following definitions shall apply:
(1) Current value of investment means the value in EUR of the investment by the financial market participant
in the investee company;
(2) Current value of all investments means the value in EUR of all investments by the financial market
participant;
(3) Nearly zero energy building (NZEB), primary energy demand (PED) and energy performance
certificate (EPC) shall have the meanings given to them in paragraphs 2, 5 and 12 of Article 2 of Directive
2010/31/EU of the European Parliament and of the Council
(10)
.
EU SFDR Disclosures (unaudited) continued
(9)
Council Directive 2011/70/Euratom of 19 July 2011 establishing a Community framework for the responsible and safe management of spent
fuel and radioactive waste (OJ L 199, 2.8.2011, p. 48).
(10)
Directive 2010/31/EU of the European Parliament and of the Council of 19 May 2010 on the energy performance of buildings (recast) (OJ
L 153, 18.6.2010, p. 13)
ABN AMRO means ABN AMO Bank N.V.
Aggregate Group Debt means the Group’s
proportionate share of outstanding third party
borrowings, including its share of limited recourse debt
in Hornsea 1
AGM means Annual General Meeting of the Company
AIC means the Association of Investment Companies
AIC Code means the AIC’s Code of Corporate
Governance
AIF means an Alternative Investment Fund as defined
under the AIFMD
AIFM means an Alternative Investment Fund Manager
as defined under the AIFMD
AIFMD means the Alternative Investment Fund
Managers Directive
Alternative Performance Measure means a financial
measure other than those defined or specified in the
applicable financial reporting framework
Andershaw means Andershaw Wind Power Limited
ANZ means Australia and New Zealand Banking Group
Limited
AXA means funds managed by AXA Investment
Managers UK Limited
Barclays means Barclays Bank PLC
BDO LLP means the Company’s Auditor as at the
reporting date
Bicker Fen means Bicker Fen Windfarm Limited
Bin Mountain means Bin Mountain Wind Farm (NI)
Limited
Bishopthorpe means Bishopthorpe Wind Farm
Limited
Board means the Directors of the Company
Braes of Doune means Braes of Doune Wind Farm
(Scotland) Limited
Breeze Bidco means Breeze Bidco (TNC) Limited
Brockaghboy means Brockaghboy Windfarm Limited
Burbo Bank Extension means Hoylake Wind Limited,
Greencoat Burbo Extension Holding (UK) Limited,
Burbo Extension Holding Limited and Burbo Extension
Limited
Carbon Footprint means the calculation per TCFD
guidance
ni
outstanding amount invested
i
total investee
debt+equity
i
*investee scope 1 and 2 GHG emissions
i
Company market value
Carcant means Carcant Wind Farm (Scotland) Limited
Cash Fee means the cash fee that the Investment
Manager is entitled to under the Investment
Management Agreement
CBA means Commonwealth Bank of Australia
CCGT means combined cycle gas turbine
CFD means Contract For Difference
Church Hill means Church Hill Wind Farm Limited
CIBC means Canadian Imperial Bank of Commerce
Clyde means Clyde Wind Farm (Scotland) Limited
CO
2
means carbon dioxide
Company means Greencoat UK Wind PLC
Corriegarth means Corriegarth Wind Energy Limited
Cotton Farm means Cotton Farm Wind Farm Limited
CPI means the Consumer Price Index
Crighshane means Crighshane Wind Farm Limited
Dalquhandy means Dalquhandy Wind Farm Limited
DCF means Discounted Cash Flow
Deeping St. Nicholas means Deeping St. Nicholas
wind farm
Depreciation means the unwinding of the discount
rate assumptions
Douglas West means Douglas West Wind Farm Limited
Drone Hill means Drone Hill Wind Farm Limited
DTR means the Disclosure Guidance and Transparency
Rules sourcebook issued by the Financial Conduct
Authority
Dunmaglass means Dunmaglass Holdco and
Dunmaglass Wind Farm
Dunmaglass Holdco means Greencoat Dunmaglass
Holdco Limited
Dunmaglass Wind Farm means Dunmaglass Wind
Farm Limited
Defined Terms
124
Greencoat UK Wind PLC Annual Report for the year ended 31 December 2023
125
G R E E N C O A T
U K W I N D
Earl’s Hall Farm means Earl’s Hall Farm Wind Farm
Limited
Equity Element means the ordinary shares issued to
the Investment Manager under the Investment
Management Agreement
ESG means Environmental, Social and Governance
EU means European Union
EU SFDR means EU Sustainable Financial Disclosure
Regulation
FCA means Financial Conduct Authority
Fenlands means Fenland Windfarms Limited
FRC means the Financial Reporting Council
GAV means Gross Asset Value
GB means Great Britain consisting of England,
Scotland and Wales
Glass Moor means Glass Moor wind farm
Glen Kyllachy means Glen Kyllachy Wind Farm Limited
Group means Greencoat UK Wind PLC and Greencoat
UK Wind Holdco Limited
Holdco means Greencoat UK Wind Holdco Limited
Hornsea 1 means Hornsea 1 Holdco and Hornsea 1
Limited
Hornsea 1 Holdco means Jupiter Investor TopCo
Limited
Hoylake means Hoylake Wind Limited
Humber Gateway means Humber Holdco and
Humber Wind Farm
Humber Holdco means Greencoat Humber Limited
Humber Wind Farm means RWE Renewables UK
Humber Wind Limited
HV means high voltage
IAS means International Accounting Standards
IFRS means International Financial Reporting
Standards
Investment Management Agreement means the
agreement between the Company and the Investment
Manager
Investment Manager means Schroders Greencoat LLP
IPEV Valuation Guidelines means the International
Private Equity and Venture Capital Valuation Guidelines
IPO mean Initial Public Offering
IRR means Internal Rate of Return
Kildrummy means Kildrummy Wind Farm Limited
KPI means Key Performance Indicator
Kype Muir Extension means Kype Extension Wind
Farm Limited
Langhope Rig means Langhope Rig Wind Farm Limited
Levered portfolio IRR means the Internal Rate of
Return with an assumed level of gearing
Lindhurst means Lindhurst Wind Farm
Listing Rules means the listing rules made by the UK
Listing Authority under Section 73A of the Financial
Services and Markets Act 2000
Little Cheyne Court means Little Cheyne Court Wind
Farm Limited
Lloyds means Lloyds Bank PLC and Lloyds Bank
Corporate Markets PLC
London Array means London Array Holdco and
London Array Limited
London Array Holdco means Greencoat London Array
Holdco Limited
Maerdy means Maerdy Wind Farm Limited
Middlemoor means Middlemoor Wind Farm
ML Wind means ML Wind LLP
NAB means National Australia Bank
Nanclach means Nanclach Limited
NAV means Net Asset Value
NAV per Share means the Net Asset Value per
Ordinary Share
Net Zero means the UK Government’s strategy to
decarbonise all sectors of the UK economy
North Hoyle means North Hoyle Wind Farm Limited
North Rhins means North Rhins Wind Farm Limited
Defined Terms continued
O&M means operations and maintenance
PPA means Power Purchase Agreement entered into
by the Group’s wind farms
RBC means the Royal Bank of Canada
RBS International means the Royal Bank of Scotland
International Limited
RCF means revolving credit facility
Red House means Red House wind farm
Red Tile means Red Tile wind farm
REGO means Renewable Energy Guarantee of Origin
REMA means Government’s Review of Electricity
Market Arrangements
Review Section means the front end review section of
this report (including but not limited to the Chairman’s
Statement, and Investment Manager’s Report)
Rhyl Flats means Rhyl Flats Wind Farm Limited
ROC means Renewable Obligation Certificate
RPI means the Retail Price Index
Santander means Santander Global Banking and
Markets
Screggagh means Screggagh Wind Farm Limited
SDG means Sustainable Development Goal
Sixpenny Wood means Sixpenny Wood Wind Farm
Limited
Slieve Divena means Slieve Divena Wind Farm Limited
Slieve Divena 2 means Slieve Divena Wind Farm No.
2 Limited
SONIA means the Sterling Overnight Index Average
South Kyle means South Kyle Wind Farm Limited
SPVs means the Special Purpose Vehicles which hold
the Group’s investment portfolio of underlying wind
farms
Stronelairg means Stronelairg Holdco and Stronelairg
Wind Farm
Stronelairg Holdco means Greencoat Stronelairg
Holdco Limited
Stronelairg Wind Farm means Stronelairg Wind Farm
Limited
Stroupster means Stroupster Caithness Wind Farm
Limited
SYND Holdco means SYND Holdco Limited
Tappaghan means Tappaghan Wind Farm (NI) Limited
TCFD means Task Force on Climate-Related Financial
Disclosures
Tom nan Clach means Breeze Bidco and Nanclach
TSR means Total Shareholder Return
Twentyshilling means Twentyshilling Limited
UK means the United Kingdom of Great Britain and
Northern Ireland
UK Code means the UK Corporate Governance Code
issued by the FRC
UREGNI means the Utility Regulator in Northern
Ireland
WACI (revenue) means Weighted Average Carbon
Intensity calculated per TCFD guidance
ni
outstanding
amount invested
i
total investee debt+equity
i
*investee
scope 1 and 2 GHG emissions
i
investee revenue
i
WACI (activity) means the metric applies to the same
approach as revenue based WACI, however replaces
an asset’s revenue with MWh energy generation and
covers only Scope 1 and 2 emissions
Walney means Walney Holdco and Walney Wind Farm
Walney Holdco means Greencoat Walney Holdco
Limited
Walney Wind Farm means Walney (UK) Offshore
Windfarms Limited
Windy Rig means Windy Rig Wind Farm Limited
Yelvertoft means Yelvertoft Wind Farm Limited
Defined Terms continued
126
Greencoat UK Wind PLC Annual Report for the year ended 31 December 2023
127
G R E E N C O A T
U K W I N D
Performance
Measure Definition 2023 2022
Aggregate Group Debt The Group’s proportionate share of outstanding £2,375 £1,780
third party borrowings of £1,790 million per million million
note 13 to the financial statements plus limited
recourse debt of £585 million at Hornsea 1,
not included in the Consolidated Statement of
Financial Position
CO
2
emissions avoided The estimate of the portfolio’s annual CO
2
2.5 2.0
per annum emissions avoided through the displacement of million million
thermal generation, based on the portfolio’s tonnes tonnes
estimated generation as at the relevant
reporting date
GAV Gross Asset Value £6,169.0 £5,652.7
million million
Homes powered per annum The estimate of the number of homes powered 2.3 million 1.8 million
by electricity generated by the portfolio, based homes homes
on the portfolio’s estimated generation as at
the relevant reporting date
NAV Net Asset Value £3,794.0 £3,873.2
million million
NAV per share The Net Asset Value per ordinary share per 164.1 pence 167.1 pence
note 16 to the financial statements
Net cash generation The operating cash flow of the Group and £405.5 £560.1
wind farm SPVs as broken down below million million
Total Shareholder Return The theoretical return to a shareholder on a 5.4 per cent 13.5 per cent
closing market basis, assuming that all
dividends received were reinvested without
transaction costs into the Ordinary Shares of
the Company at the close of business on the
day the shares were quoted ex dividend
Alternative Performance Measures
128
Greencoat UK Wind PLC Annual Report for the year ended 31 December 2023
For the year ended For the year ended
31 December 2023 31 December 2022
Group and wind farm SPV cash flows £’000 £’000
Net cash generation 405,510 560,077
Dividends paid (197,043) (175,800)
Acquisitions (820,925) (484,153)
Acquisition costs (2,742) (4,667)
Share buybacks/equity issuance (9,439) —
Share buyback/equity issuance costs (56) (42)
Net amounts drawn under debt facilities 690,000 150,000
Upfront finance costs (4,939) (1,663)
Movement in cash (Group and wind farm SPVs) 60,366 43,752
Opening cash balance (Group and wind farm SPVs) 160,851 117,099
Closing cash balance (Group and wind farm SPVs) 221,217 160,851
Net cash generation 405,510 560,077
Dividends 197,043 175,800
Dividend cover 2.1x 3.2x
For the year ended For the year ended
31 December 2023 31 December 2022
Net Cash Generation – Breakdown £’000 £’000
Revenue 785,608 981,752
Operating expenses (198,611) (234,439)
Tax (62,661) (122,910)
SPV level debt interest (20,044) (9,948)
SPV level debt amortisation (47,129) (19,947)
Other 28,133 21,838
Wind farm cash flow 485,296 616,446
Management fee (24,993) (29,556)
Operating expenses (2,564) (2,141)
Ongoing finance costs (62,834) (28,026)
Other 5,013 2,507
Group cash flow (85,378) (57,216)
VAT (Group and wind farm SPVs) 5,592 847
Net cash generation 405,510 560,077
For the year ended For the year ended
31 December 2023 31 December 2022
Net Cash Generation – Reconciliation to Net Cash Flows from Operating Activities £’000 £’000
Net cash flows from operating activities 359,801 545,851
Movement in cash balances of wind farm SPVs 18,225 28,770
Repayment of shareholder loan investment 50,199 13,482
Finance costs (67,773) (29,689)
Upfront finance costs 4,939 1,663
Placing of security cash deposits 40,119 —
Net cash generation 405,510 560,077
Alternative Performance Measures continued
G R E E N C O A T
U K W I N D
Cautionary Statement
The Review Section of this report has been prepared solely to provide additional information to shareholders
to assess the Company’s strategies and the potential for those strategies to succeed. These should not be
relied on by any other party or for any other purpose.
The Review Section may include statements that are, or may be deemed to be, “forward-looking statements”.
These forward-looking statements can be identified by the use of forward-looking terminology, including the
terms “believes”, “estimates”, “anticipates”, “expects”, “intends”, “may”, “will” or “should” or, in each case,
their negative or other variations or comparable terminology.
These forward-looking statements include all matters that are not historical facts. They appear in a number of
places throughout this document and include statements regarding the intentions, beliefs or current
expectations of the Directors and the Investment Manager concerning, amongst other things, the investment
objectives and Investment Policy, financing strategies, investment performance, results of operations, financial
condition, liquidity, prospects, and distribution policy of the Company and the markets in which it invests.
By their nature, forward-looking statements involve risks and uncertainties because they relate to events and
depend on circumstances that may or may not occur in the future. Forward-looking statements are not
guarantees of future performance. The Company’s actual investment performance, results of operations,
financial condition, liquidity, distribution policy and the development of its financing strategies may differ
materially from the impression created by the forward-looking statements contained in this document.
Subject to their legal and regulatory obligations, the Directors and the Investment Manager expressly disclaim
any obligations to update or revise any forward-looking statement contained herein to reflect any change in
expectations with regard thereto or any change in events, conditions or circumstances on which any statement
is based.
In addition, the Review Section may include target figures for future financial periods. Any such figures are
targets only and are not forecasts.
This Annual Report has been prepared for the Company as a whole and therefore gives greater emphasis to
those matters which are significant in respect of Greencoat UK Wind PLC and its subsidiary undertakings when
viewed as a whole.
129
