## Greencoat UK Wind PLC ## Annual Report ### For the year ended 31 December 2023 ## G R E E N C O A T ## U K W I N D ## Contents 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 All capitalised terms are defined in the list of defined terms on pages 124 to 126 unless separately defined. G R E E N C O A T U K W I N D GREENCOAT UK WIND # 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 31 December 2023 | As at 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. 01 Greencoat UK Wind PLC Annual Report for the year ended 31 December 2023 ## Chairman's Statement ![img-0.jpeg](img-0.jpeg) 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. 02 GREENCOAT^{}[] UK WIND # Chairman's Statement continued ## 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. 03 Greencoat UK Wind PLC Annual Report for the year ended 31 December 2023 ## Chairman’s Statement continued The Board, Governance and Executive Management Annual General Meeting continued Our AGM will take place at 2pm on 24 April 2024 at In December 2023, we announced that Laurence the office of the Investment Manager. Fumagalli will be succeeded by Matt Ridley as one of Details of the formal business of the meeting are set the investment managers, partnering Stephen Lilley. out in a separate circular which is sent to shareholders The Board would like to thank Laurence for his vision with the Annual Report. 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. Lucinda Riches C.B.E. Chairman 28 February 2024 Corriegarth 04 ## Investment Manager’s Report 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. G R E E N C O A T 05 U K W I N D Greencoat UK Wind PLC Annual Report for the year ended 31 December 2023 ## Investment Manager’s Report continued Investment Portfolio As at 31 December 2023, the Group owned investments in a diversified portfolio of 49 operating UK wind farms totalling 2,007MW. 43 45 18 21 11 24 42 5 14 16 8 17 1 25 26 31 10 41 46 48 6 33 3 39 40 9 44 13 37 47 22 7 38 36 32 4 23 27 2 34 15 20 49 35 12 19 30 29 28 | 1 Andershaw | 14 Dalquhandy | 27 Lindhurst | 40 Slieve Divena 2 | | --- | --- | --- | --- | | 2 Bicker Fen | 15 Deeping St. Nicholas | 28 Little Cheyne Court | 41 South Kyle | | 3 Bin Mountain | 16 Douglas West | 29 London Array | 42 Stronelairg | | 4 Bishopthorpe | 17 Drone Hill | 30 Maerdy | 43 Stroupster | | 5 Braes of Doune | 18 Dunmaglass | 31 Middlemoor | 44 Tappaghan | | 6 Brockaghboy | 19 Earl’s Hall Farm | 32 North Hoyle | 45 Tom nan Clach | | 7 Burbo Bank Extension | 20 Glass Moor | 33 North Rhins | 46 Twentyshilling | | 8 Carcant | 21 Glen Kyllachy | 34 Red House | 47 Walney | | 9 Church Hill | 22 Hornsea 1 | 35 Red Tile | 48 Windy Rig | | 10 Clyde | 23 Humber Gateway | 36 Rhyl Flats | 49 Yelvertoft | | 11 Corriegarth | 24 Kildrummy | 37 Screggagh | | | 12 Cotton Farm | 25 Kype Muir Extension | 38 Sixpenny Wood | | | 13 Crighshane | 26 Langhope Rig | 39 Slieve Divena | | 06 ## 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 Siemens (39%) Hornsea 1 (16%) Humber Gateway (9%) England (49%) | London Array (8%) Vestas (31%) | Walney (7%) | | --- | --- | | Onshore (55%) < 5 years (31%) | | | Clyde (7%) Scotland (41%) Nordex (14%) | South Kyle (6%) | 5-10 years (38%) Stronelairg (5%) Northern Ireland (7%) Corriegarth (4%) Enercon (8%) Burbo Bank Extension (3%) Offshore (45%) > 10 years (31%) Brockaghboy (3%) Wales (3%) Senvion (4%) Other (32%) G R E E N C O A T GE (4%) 07 U K W I N D Greencoat UK Wind PLC Annual Report for the year ended 31 December 2023 ## Investment Manager’s Report continued ### 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 (variation to long term mean) | Generation (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. | Group and wind farm SPV cash flows | For the year ended 31 December 2023 £'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. 08 GREENCOAT^{}[] UK WIND ## Investment Manager's Report continued ### Operating and Financial Performance continued The following tables provide further detail in relation to net cash generation of £405.5 million: | Net Cash Generation – Breakdown^{(1)} | For the year ended 31 December 2023 £'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. | Net Cash Generation – Reconciliation to Net Cash Flows from Operating Activities^{(1)} | For the year ended 31 December 2023 £'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. 09 Greencoat UK Wind PLC Annual Report for the year ended 31 December 2023 ## Investment Manager’s Report continued ### 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): | Facility | Maturity date | Loan principal £'000 | Loan margin % | Swap rate/SONIA % | All-in rate % | | --- | --- | --- | --- | --- | --- | | 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. 10 GREENCOAT^{}[] UK WIND ## Investment Manager's Report continued ### 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 31 December 2023 £'000 | As at 31 December 2022 £'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 Homsea 1, not included in the Consolidated Statement of Financial Position. 11 Greencoat UK Wind PLC Annual Report for the year ended 31 December 2023 ## Investment Manager’s Report continued 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 12 GREENCOAT UK WIND # Investment Manager's Report continued ## Power Price continued | Wind Farm | Ownership Stake | Net MW | Net GWh | Power | | | ROC | | | | | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | | | | | Offtaker | Price | Expiry | ROC/ MWh | ROC end date | Offtaker | Price (Buy Out) | Price (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 | | Blshopthorpe | 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 for 80% volume | 31-Dec-31 | n/a | n/a | n/a | n/a | n/a | n/a | | | | | | | 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 | | Durmaylass | 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 for 50% volume | 31-Dec-37 | n/a | n/a | n/a | n/a | n/a | n/a | | | | | | | £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 + CPI for 200GWh | 31-Dec-37 | n/a | n/a | n/a | n/a | n/a | n/a | | 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 + CPI | 01-Nov-38 | n/a | n/a | n/a | n/a | n/a | n/a | | 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** | | | | | | | | | | 13 Greencoat UK Wind PLC Annual Report for the year ended 31 December 2023 ## Investment Manager's Report continued ### 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 | ![img-1.jpeg](img-1.jpeg) 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). 14 GREENCOAT^{}[] UK WIND ## Investment Manager's Report continued ### 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: - 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. ![img-2.jpeg](img-2.jpeg) South Kyle 15 Greencoat UK Wind PLC Annual Report for the year ended 31 December 2023 ## Investment Manager’s Report continued 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. Walney 16 ## Investment Manager’s Report continued 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) 172 290 168 270 164 160 250 156 230 152 148 210 144 % 190 140 136 170 Pence 132 128 150 124 130 120 116 110 112 108 90 Dec Dec Dec Dec Dec Dec Dec Dec Dec Dec Dec 104 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 100 | | 96 | Greencoat UK Wind | | | | Bluefield Solar | | | | The Renewables | | | | | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | | | Dec | Dec | Dec | Dec | Income Fund | Dec | Dec | Dec | Infrastructure Group | Dec | Dec | Dec | Dec | | | | | 2013 | 2014 | 2015 | 2016 | | 2017 | 2018 | 2019 | | 2020 | 2021 | 2022 | 2023 | 17 | | G R E E N C O A T | | Foresight Solar Fund | | | | | | | | Next Energy | | | | | | John Laing Environmental U K W I N D NAV per share (ex dividend) Assets Group Solar Fund RPI (rebased to 98) Greencoat UK Wind PLC Annual Report for the year ended 31 December 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. Glen Kyllachy 18 GREENCOAT^{}[] UK WIND # Strategic Report ## 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. 19 Greencoat UK Wind PLC Annual Report for the year ended 31 December 2023 ## Strategic Report continued Review of Business and Future Outlook out a robust assessment of the risks facing the Group, including those risks that would threaten its business A detailed discussion of individual asset performance model, future performance, solvency or liquidity. and a review of the business in the year together with future outlook are covered in the Investment The risk appetite of the Group is considered in light of Manager’s Report on pages 5 to 18. the principal risks and their alignment with the Company’s Investment Objective. The Board considers Key Performance Indicators the risk appetite of the Group and the Company’s The Board believes that the key metrics detailed on adherence to the Investment Policy in the context of page 1, which are typical for investment entities, will the regulatory environment taking into account, inter provide shareholders with sufficient information to assess alia, gearing and financing risk, wind resource risk, the how effectively the Group is meeting its objectives. level of exposure to power prices and environmental and health and safety risks. Ongoing Charges The ongoing charges ratio of the Company is 0.92 per As it is not possible to eliminate risks completely, the cent of the weighted average NAV for the year to purpose of the Group’s risk management policies and 31 December 2023. This is made up as follows and has procedures is to reduce risks and to ensure the Group | been calculated using the AIC recommended | | is adequately prepared to respond to such risks and | | --- | --- | --- | | methodology. | | minimise any impact should they materialise. | | | 31 December 2023 31 December 2022 | The spread of assets within the portfolio ensures that | £’000 % £’000 % the portfolio benefits from a diversified wind resource Total management fee 32,844 0.86% 31,348 0.87% and spreads the exposure to a number of potential Directors’ fees 385 0.01% 338 0.01% technical risks associated with grid connections and (1) Other ongoing expenses 2,058 0.05% 1,970 0.05% with local distribution and national transmission Total 35,287 0.92% 33,656 0.93% networks. In addition, the portfolio includes 6 different turbine manufacturers, which diversifies technology Weighted average NAV 3,834,654 3,622,216 and maintenance risks. Finally, each site contains a (1) Other ongoing expenses do not include £1,772k of management number of individual turbines, the performance of and administration fees relating to the wind farm SPVs that is which is largely independent of other turbines. recharged to them and £549k of broken deal and project costs. | Assuming no further changes in NAV, the 2024 | Risks Affecting the Group | | --- | --- | | ongoing charges ratio is expected to be 0.92 per cent. | Investment Manager | | The Investment Manager is not paid any performance | The ability of the Group to achieve the Company’s | | or acquisition fees. | Investment Objective depends heavily on the | experience of the management team within the Employees and Officers of the Company Investment Manager and more generally on the The Company does not have any employees and Investment Manager’s ability to attract and retain therefore employee policies are not required. The suitable staff. The sustained growth of the Group Directors of the Company are listed on pages 38 to 40. depends upon the ability of the Investment Manager to identify, select and execute further investments Principal Risks and Uncertainties which offer the potential for satisfactory returns. In the normal course of business, each investee The Investment Management Agreement includes key company has a rigorous risk management framework man provisions which would require the Investment with a comprehensive risk register that is reviewed and Manager to employ alternative staff with similar updated regularly and approved by its board. The experience relating to investment, ownership, principal risks identified by the Board to the financing and management of wind farms should any performance of the Group are detailed below. key man cease to be employed by the Investment The Board maintains a risk matrix setting out the risks Manager. The Investment Management Agreement affecting both the Group and the investee companies. ensures that no investments are made following the This risk matrix is reviewed and updated at least annually loss of key men until suitable replacements are found to ensure that procedures are in place to identify and there are provisions for a reduction in the principal risks and to mitigate and minimise the impact investment management fee during the loss period. It of those risks should they crystallise. This risk matrix is also outlines the process for key man replacement with also reviewed and updated to identify emerging risks, the Board’s approval. In addition, the key men are such as climate related risks, and to determine whether shareholders in the Company. any actions are required. This enables the Board to carry 20 ## Strategic Report continued Risks Affecting the Group continued Electricity Prices Investment Manager continued Other things being equal, a decline in the market price of electricity would reduce the investee companies’ On 7 December 2023, the Company announced that revenues. Laurence Fumagalli would be stepping down from his role leading the investment management team The Group’s dividend policy has been designed to alongside Stephen Lilley with effect from 1 March 2024, withstand significant short term variability in power with Matt Ridley replacing him. Matt has 16 years’ prices. A longer period of power price decline would renewable energy investment management experience, materially affect the revenues of investee companies. spanning the development, construction and operational phases across a range of technologies, with Wind Resource a focus on wind, and previously was the Head of Private The investee companies’ revenues are dependent Markets at the Investment Manager. Stephen and Matt upon wind conditions, which will vary across seasons will lead the broad and experienced team focused on and years within statistical parameters. The standard the management of the Group and its wind farm deviation of energy production is 10 per cent over a portfolio. The majority of the team have been involved 12 month period (less than 2 per cent over 30 years). in the management of the Group for over 5 years. Since long term variability is low, there is no significant diversification benefit to be gained from geographical The Investment Manager is one of Europe’s leading diversification across weather systems. renewable investment managers, which employs over 130 professionals and has over £10 billion of assets The Group does not have any control over the wind under management. The Investment Manager is 75 per resource but has designed its dividend policy such that cent owned by Schroders Group PLC, founded over it can withstand significant short term variability in 200 years ago, and managing over £726 billion of assets production relating to wind. Before investment, the (as of 30 June 2023) with over 6,000 staff globally. Group carries out extensive due diligence and relevant historical wind data is available over a substantial Financing Risk period of time. The other component of wind energy The Group will finance further investments either by generation, a wind farm’s ability to turn wind into borrowing or by issuing further shares in addition to its electricity, is mitigated by purchasing wind farms, cash resources. The ability of the Group to deliver where possible, with a proven operating track record. 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. Tappaghan G R E E N C O A T 21 U K W I N D Greencoat UK Wind PLC Annual Report for the year ended 31 December 2023 ## Strategic Report continued Risks Affecting Investee Companies continued least February 2025. Accordingly, they continue to adopt the going concern basis in preparing the Wind Resource continued financial statements. When acquiring wind farms that have only recently entered into operation, only limited operational data is Longer Term Viability available. In these instances, the acquisition As further disclosed on page 50, the Company is a agreements with the vendors of these wind farms will member of the AIC and complies with the AIC Code. include a ‘‘wind energy true-up’’ or an appropriate In accordance with the AIC Code, the Directors are discount to the purchase price. required to assess the prospects of the Group over a period longer than the 12 months associated with Asset Life going concern. The Directors conducted this review for In the event that the wind turbines do not operate for a period of 10 years, which is deemed appropriate, the period of time assumed by the Group or require given the long term nature of the Group’s investments higher than expected maintenance expenditure to do which are modelled over 30 years, coupled with its so, it could have a material adverse effect on long term strategic planning horizon. investment returns. In considering the prospects of the Group, the The Group performs regular reviews and ensures that Directors looked at the key risks facing both the Group maintenance is performed on all wind turbines across and the investee companies as detailed on pages 20 to the wind farm portfolio. Regular maintenance ensures 22, focusing on the likelihood and impact of each risk the wind turbines are in good working order, consistent as well as any key contracts, future events or timescales with their expected life-spans. that may be assigned to each key risk. The Directors Health and Safety and the Environment also tested and are comfortable that the Company would continue to remain viable under several robust The physical location, operation and maintenance of downside scenarios, including loss of government wind farms may, if inadequately assessed and subsidies and a significant decline in long term power managed, pose health and safety risks to those price forecasts, both considered principal risks and involved. Inappropriate wind farm operation and uncertainties affecting investee companies. maintenance may result in bodily injury, particularly if an individual were to fall from height, fall or be crushed As a sector-focused infrastructure fund, the Group aims in transit from a vessel to an offshore installation or be to produce stable and inflating dividends while electrocuted. If an accident were to occur in relation preserving the capital value of its investment portfolio to one or more of the Group’s investments and if the on a real basis. The Directors believe that the Group is Group were deemed to be at fault, the Group could well placed to manage its business risks successfully be liable for damages or compensation to the extent over both the short and long term and accordingly, the such loss is not covered by insurance policies. In Board has a reasonable expectation that the Group will addition, adverse publicity or reputational damage be able to continue in operation and to meet its could follow. liabilities as they fall due for a period of at least 10 years. The Board reviews health and safety at each of its The Board does not believe that the lower power scheduled Board meetings and Martin McAdam serves prices projected in the high transition risk scenario, as as the appointed Health and Safety Director. After discussed on page 33, will diminish the longer term Martin’s retirement at the AGM in April 2024, Jim viability of the Company. Smith will assume this responsibility. The Group also engages an independent health and safety consultant The Directors have also considered the continuation to ensure the ongoing appropriateness of its health vote to be proposed at the Company’s AGM in April and safety policies. 2024, caused by the Company’s shares trading at 10.5 per cent average discount to NAV in line with its The investee companies comply with all regulatory and Articles of Association. The Directors believe that the planning conditions relating to the environment, outcome of the shareholder continuation vote will not including in relation to noise emissions, habitat impact their opinion of the Company’s longer term management and waste disposal. viability. Going Concern While the Directors have no reason to believe that the As further detailed in note 1 to the financial statements Group will not be viable over a longer period, they are on page 74, the Directors have a reasonable of the opinion that it would be difficult to foresee the expectation that the Company and the Group have economic viability of any company with any degree of adequate resources to continue in operational certainty for a period of time greater than 10 years. existence from the date of approval of this report to at 22 GREENCOAT^{}[] UK WIND ## Strategic Report continued ### 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. | 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. | 23 Greencoat UK Wind PLC Annual Report for the year ended 31 December 2023 ## Strategic Report continued ### Directors' Responsibilities Pursuant to Section 172 of the Companies Act 2006 continued | Topic | Stakeholder considerations and outcome | | --- | --- | | **Annual review of service providers** | 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. | ### 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 CO₂. 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 CO₂ 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). ⁽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 CO₂ 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 0.4tCO₂/MWh (Ofgem). 24 ## Strategic Report continued Environmental, Social and Governance continued Screening Responsible Investment • screening the investment against investment mandate and restrictions; and To sustain the long term success of the business, the Company acknowledges and understands the • assessing the ability of the investment to comply importance of effective management of ESG matters with ESG standards. for all stakeholders. Due Diligence The Company continues to have an important role to • rigorously assessing ESG risks and opportunities play in championing both responsible investment and of the investment based on commitment, capacity, the development of the renewable energy sector. This track record and features of the wind farm; and is achieved through continuous engagement with all industry stakeholders, including suppliers, O&M • identifying mitigation plans for ESG risks, where partners, industry associations, policy makers, peers identified. and communities. The Company transparently shares its ESG approach and results with investors. Investment decision • identifying and addressing ESG issues in extracts Responsible investing principles have been applied to of the Investment Manager’s Investment each of the investments made, which require the Committee papers that inform investment Group to make reasonable endeavours to ensure the decisions; and ongoing compliance of its investee companies with its policies on responsible investment and ESG matters. • determining and costing plans to address ESG issues, and price into the investment decision Although the non-executive Board has overall process. responsibility for the activities of the Company and its investments, the day-to-day management of the Asset Management business is delegated to the Investment Manager. This • establishing appropriate governance structures; includes responsibility for ESG matters and applies as investments are being made and continuously during • complying with all relevant laws and regulations; the life of each wind farm. The Investment Manager assesses how ESG should be managed and the • ensuring ongoing monitoring and management of Company has developed its ESG policy in accordance ESG issues; with the Investment Manager’s ESG Policy. The ESG • managing impacts on the natural habitat Policy of the Company is approved and overseen by surrounding the wind farms under management; the Company’s Board. • engaging with and supporting the local The Group will continue to lead the way in communities; encouraging responsible investment to accelerate the development of the UK’s wind energy sector • performing due diligence on third parties and further and will do this in a way that maximises returns ensuring compliance with the Company’s ESG for our shareholders and creates benefits for the policy; and communities and the natural environment in which its wind farms operate. • ensuring business integrity with a focus on avoiding money laundering, negligent or corrupt The Investment Manager has representation on the practices. boards of the operating wind farm companies which oversee performance, including on ESG matters, and Environment meet quarterly. From these ongoing reviews, the As one of the largest owners of wind farms in the UK, Investment Manager reports quarterly to the Company’s the Group is focused on taking actions to support Board, with data on production, wind farm availability, climate change mitigation through the generation of key events and health and safety performance. renewable energy, whilst minimising the potential impacts that the operation of wind farms may have on This robust management structure enables the local habitats and the environment. Investment Manager to oversee ESG issues effectively throughout the lifecycle of the Group’s wind farms: G R E E N C O A T 25 U K W I N D Greencoat UK Wind PLC Annual Report for the year ended 31 December 2023 ## Strategic Report continued Environmental, Social and Governance continued Protection Agency, local authorities, Ofgem, UREGNI or any other relevant regulatory body, including the Environment continued data reporting obligations under Renewable The world continues to face a serious climate Obligation Order 2009. challenge, and the UK is taking an active role as a global leader in greenhouse gas emissions reduction. The Group’s core activities include: The Company supports the UK Government’s commitment to achieve Net Zero by 2050 through • maintaining management systems to evaluate the acquiring operational wind farms and thereby allowing potential risks and impacts of its activities and developers and utilities to recycle their capital into avoiding or mitigating environmental impacts on further renewable energy projects, and by biodiversity, air quality, noise and waste demonstrating the attractive long term returns in the management where relevant; industry through our prudent management of wind • running habitat management plans at its wind farms, thereby reducing the cost of capital. farms; The Group is committed to protecting the local • undertaking additional environmental impact environment around its wind farms, recognising the assessments or undergoing regular monitoring as potential impact that wind farms can have on local required; terrestrial and aquatic wildlife and landscape. • seeking to work with partners who uphold good As such, the Group seeks to protect the local industry standards – from operational managers environment around its wind farms by using robust whose management systems comply with the environmental management systems. These include requirements of ISO 14001:2015 (environmental policies, periodic risk assessments, monitoring and management systems) to the material contractors regular reporting to the Board and the boards of each used; and of the wind farm companies. Through these measures, the Group also ensures compliance with all applicable • reporting regularly to the Board and the boards of laws, regulations and planning permissions as each of the wind farm companies. administered by the Environment Agency, Health 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. 26 ## Strategic Report continued Environmental, Social and Governance continued During the year, these activities included: Environment continued • 530 regular safety checks carried out by the The Company also recognises the importance of a operations and maintenance service providers at circular economy in achieving Net Zero targets and in all wind farms; reducing the environmental impact associated with renewable energy generation. After setting up a grant- • safety walks by the Investment Manager’s team at making programme to fund and support academic 43 wind farms; research and non-profit projects last year, the first 2 • independent health and safety audits by projects are underway. The ‘Added-value Coatings’ accredited professionals at 14 wind farms and research project, led by The University of Edinburgh, 16 O&M partners; and aims to turn decommissioned wind turbine blade materials into powders that can be used in surface • HV audits at 10 wind farms. coatings to protect engineering and structural components from corrosion. The second project is led The Group’s focus on prevention arises out of a culture by Imperial College, London and aims to develop an of transparent reporting, collaboration, and best end-of-life decision-making tool to predict how much practice. Identifying both hazards and analysing the damage a wind turbine blade has accumulated in its causes of incidents is a key risk mitigant. lifetime. The tool aims to support the industry in As a member of Renewable UK, the UK’s leading wind making informed and sustainable decisions about the energy trade association, the Company is keen to work optimal end-of-life route for turbine blades. with other stakeholders to develop the industry further Social including on health and safety. In addition, the Supporting worker safety and fair employment on Investment Manager is an active member of SafetyOn, our sites the UK’s leading health and safety focused organisation for the onshore wind industry. With the Worker safety is a top priority for the Group. The Group increase in offshore wind capacity in the Company’s also recognises the need for people to be paid fairly for portfolio, the Investment Manager also became a the work they do and to have appropriate working member of G+, to help ensure industry best practice conditions. In prioritising these elements, it supports for offshore wind assets. the local communities in which its wind farms operate, ensuring the long term viability of its operations. Supporting the communities around our wind farms The Group achieves this through a range of activities, It is important that the wind farms are truly part of the including: community. The Group’s approach aids long term support by local communities for wind farms in the UK, • complying with all applicable laws relating to which ultimately enables the continued growth of employment, occupational health and safety, the industry. human rights, prevention of human trafficking and modern slavery, public safety and security and The Group cares about the communities around community matters, including the Wind Turbine its wind farms and engages with local communities Safety Rules; to ensure respect for land and access rights and that its wind farms are managed in accordance with • implementing health and safety best practices planning permissions. through wind farm specific health and safety policies, project management, contractual The Group holds regular dialogue with community arrangements, staff training and stakeholder funds and provides financial support to local education; groups through community benefit schemes that fund local projects. • assessing and monitoring health and safety practices through wind farm specific risk These funds help deliver a range of services, from identification and prevention activities; and improving local amenities and infrastructure to aiding educational projects for local schools. • reporting on key health and safety data regularly, with escalation and rapid response procedures in In 2023, the Group provided £4.4 million to community place in case of emergency. funds. G R E E N C O A T 27 U K W I N D Greencoat UK Wind PLC Annual Report for the year ended 31 December 2023 ## Strategic Report continued Environmental, Social and Governance continued women who represent 40 per cent of Directors on the Board. After the Company’s AGM on 24 April 2024, Social continued the Board will comprise of 3 women and 2 men. Diversity The Board has a policy to base appointments on merit The Board is cognisant that it does not currently have and against objective criteria, with due regard for the ethnic minority representation, contrary to the FCA benefits of diversity, including both gender and ethnic diversity guidelines. The size of the Board is relatively diversity. Its objective is to attract and maintain a Board small in comparison to the wider FTSE 250 and that, as a whole, comprises an appropriate balance of FTSE 100 constituents and therefore provides a greater skills and experience. challenge in complying with diversity guidelines. In the recruitment processes conducted during the year, The Board consists of individuals from relevant and enhancing the Board’s ethnic diversity was a key focus. complementary backgrounds offering experience in Whilst the Board has not become more ethnically the investment management of listed funds, as well as diverse as a result of the recruitment in 2023, this will in the energy sector from both a public policy and a continue to be an important objective during future commercial perspective. As at the date of this report, succession planning, whilst ensuring an appropriate the Board comprised 3 men and 2 women, all non- balance of skills and experience in the Board. executive Directors who are considered to be independent of the Investment Manager and free from The Board recognises the importance of an inclusive any business or other relationship that could materially and diverse Board in facilitating a collaborative culture interfere with the exercise of their independent and enhancing the delivery of the Company’s strategic judgement. Currently, the Chairman and Audit objectives. Committee Chairman positions are both held by 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 (1) in scope of the Board and Chair) 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 (1) in scope of the Board and Chair) 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. 28 ## Strategic Report continued Environmental, Social and Governance continued Governance Governance Board oversight and the role of the Investment Manager Detailed disclosure on the Company’s governance structure and activities can be found in the Corporate The Board is responsible for the determination of the Governance Report on pages 50 to 55 and in the TCFD Company’s Investment Objective and Investment Governance section below. Policy. It also oversees the management of the Company and its investments, including ESG and Task Force on Climate Related Financial Disclosures climate related risks and opportunities. The Board also (TCFD) delegates the day-to-day management of the business, The Company strives to maintain the highest standards including management of ESG matters, to the of corporate governance and effective risk Investment Manager. identification and management at both Group and The Audit Committee also considers the Company’s wind farm level. The Company supports the climate related disclosures in its Annual Report and recommendations of the TCFD and refers to them for Financial Statements. guidance on addressing climate related risks and opportunities across the Group and enhancing our As discussed in the Corporate Governance Report on disclosure. pages 50 to 55, the Board and the Investment Manager meet regularly and discuss risk management. Climate These disclosures are categorised between the related risks are covered during these discussions, as 4 thematic areas as recommended by the TCFD. 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. CASE STUDY Errogie Church – Driving positive social impact in the local community The Group is committed to investing in projects that basic use. The Errogie Doors Open Day and the benefit communities in the long term: the Errogie large turnout are evidence of the consensus around Church project is a great example of this approach. the initiative and testimony of the positive impact it Co-funded by Corriegarth, the Stratherrick & Foyers will have in the future. Community Trust (SFCT) looks to encourage positive Through ongoing partnerships and community-led community development near the wind farm. initiatives, the project is on track to leave a lasting Specifically, the project aims to repurpose Errogie legacy of positive social impact for generations Church into a community hub. to come. 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 G R E E N C O A T 29 U K W I N D Greencoat UK Wind PLC Annual Report for the year ended 31 December 2023 ## Strategic Report continued Task Force on Climate Related Financial Disclosures Strategy (TCFD) continued The Board understands that climate change poses risks Governance continued and opportunities to the Company. Board oversight and the role of the Investment As the leading listed renewable infrastructure fund, Manager continued invested in UK wind farms, the Company plays a In addition, the Investment Manager has its own ESG significant role in the UK renewables industry. Overall, Committee that meets regularly to discuss ESG and the Board believes that the decarbonisation of the UK climate related risks relating to the Group and other economy will continue to present a significant funds it manages. This committee has implemented an investment opportunity and the size of the Company’s ESG Policy that looks to establish best practice in growth will be related to the success of the sector and climate related risk management, reporting and the engagement of its stakeholders. The Company is transparency. Stephen Lilley is on this ESG Committee committed to its strategy and Investment Policy of and therefore remains well informed and involved with investing in operating wind assets to benefit from this ESG and climate related discussions, which may impact opportunity. The Company also recognises, however, the Company. Representatives from the Investment that there are short term and medium to long term Manager also sit on all of the boards of the wind farm transition risks that could impact its future financial companies, which meet quarterly and discuss ESG and performance. The Company seeks to manage these climate related risk management. risks to mitigate potential impact. North Hoyle 30 ## Strategic Report continued 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 | Increased | Increasing ambition of corporate and | The Board considers that the | | --- | --- | --- | --- | | | demand for | Government Net Zero targets could lead | decarbonisation of the UK economy | | | renewable | to a material increase in the procurement | will continue to present a significant | | | energy | of renewable energy by businesses and | investment opportunity in the short | | | generation | consumers. Moreover, companies are | and medium term (0-15 years) and the | | | | increasingly required to demonstrate | size of the Company’s growth will be | | | | their commitment to reducing their | related to the success of the sector | | | | carbon footprints, which may increase | and the engagement of its | | | | the demand for corporate PPAs. | stakeholders. | | Transition | Increased | Institutional investors are increasingly | The Board believes that providing | | --- | --- | --- | --- | | | investor | expected by regulators and clients to | investors with a vehicle that supports | | | interest in | disclose their strategies to mitigate | their Net Zero ambitions is an | | | renewable | climate change. This includes the setting | opportunity to the Company in the | | | energy funds | of Net Zero targets and investing in | short term (<5 years). The Company | | | | assets that contribute to climate change | continues to evolve its engagement | | | | mitigation such as renewable energy | with the market and its disclosures to | | | | assets to meet these targets. Increased | better explain the positive role that | | | | investor interest in renewable energy | wind energy generation plays in the | | | | funds could lead to a lower cost of | energy transition. | capital and enable greater capital raises to support the long term growth and investment activities of the Company. Risks Category Climate issue Risk Company consideration | Transition The Board considers the likelihood of | Retrospective | There is a risk that the UK Government | | | --- | --- | --- | --- | | | changes to | retrospectively changes its financial | any retrospective policy change to be | | | policies | support for the renewable energy sector | low in the short term (less than 5 | | | providing | such as ROCs, network charges and | years). To manage any such risk, the | | | financial | carbon price floors. Retrospective | Board and Investment Manager keep | | | support to | changes to such financial support could | themselves abreast of developments | | | renewable | decrease portfolio revenues and | in international support for renewable | | | energy | increase operating costs making the | energy as well as their impact and, | | | | technology less commercially viable. | 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. G R E E N C O A T 31 U K W I N D Greencoat UK Wind PLC Annual Report for the year ended 31 December 2023 ## Strategic Report continued Task Force on Climate Related Financial Disclosures (TCFD) continued Strategy continued Risks continued Category Climate issue Risk Company consideration Transition Increased It is possible that the deployment of The Board considers there to be renewable new renewable energy generation limited potential impact on the generation capacity, required to meet future UK Company from fluctuating power capacity and global emission reduction targets, prices due to the nature of the reduces power could reduce the power prices captured portfolio’s cashflows, which are both prices by the Group’s portfolio investments fixed and merchant. The Group’s resulting in reduced revenues. dividend policy has also been designed to withstand significant short term variability in generation or power price capture. Transition Increased There is also an increase in reputational The Company considers the potential reputational risk should incorrect or unclear impact of this risk to the Company to risks statements be made in climate related be low in the short and medium term. associated disclosures that could result in investor To manage this risk, the Investment with climate- dissatisfaction, fines linked to Manager engages specialist consultants related greenwashing or broader reputational to measure and report on the disclosures and damage to the Company and the Company’s carbon emissions. The reporting Investment Manager. Investment Manager also uses internal obligations 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. Physical The Company considers the impact of Increase in The UK has witnessed an increase in extreme extreme weather events including such risks to its portfolio to be low. The weather events flooding, heatwaves and storms current portfolio of wind farms is including high wind speeds in recent designed to withstand extreme years. Extreme weather events have the weather conditions and to take potential to disrupt portfolio operations advantage of weather systems such as impacting cash flows, and to damage increased wind speeds. In addition, assets resulting in increased operating wind turbines are designed to shut costs or insurance premiums. 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. 32 ## 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 Dalquhandy capacity will be required, there is a risk that the power price received by the Group’s portfolio could be The lower long term power price, provided by a leading negatively impacted, depending on how successful the market consultant, reflects the wider deployment of low Government is in implementing its plan and depending marginal cost renewable generation capacity, partially on future electricity market design including the offset by the expected deployment of electrolysers as ongoing REMA consultation. part of a growing hydrogen economy, increased The Investment Manager has assessed the potential electrification of transport and heat and the build-out of impact of a high transition risk scenario using a third data centres. Modelling the lower long term power party Net Zero model built by leading power market price would equate to approximately a 17 pence experts. The model sets out how electricity prices and reduction in NAV per share. the market may develop in line with meeting the The base case long term power price assumes legislated target of Net Zero emissions by 2050, significant renewable generation and other measures including current and future policy implementation to to reduce carbon emissions and represents the achieve carbon neutrality, technological developments independent consultant’s best estimate of likely and commodity price forecasts for a global outlook. outturn. The high transition risk scenario assumes In this high transition risk scenario where global further measures. The precise effect on power price of o o temperature increases are limited to only 1.5 C to 2 C any measures (in the base case and in the high (most typically associated with Net Zero), it is assumed transition risk scenario) is highly uncertain and is highly that the UK Government is successful in implementing dependent on future electricity market design. The its plan in its entirety and the REMA consultation does high transition risk scenario also assumes no other not conclude in significantly different market design. In offsetting factors. this scenario, the long term power price is lower than the base case used to calculate the Company’s NAV. G R E E N C O A T 33 U K W I N D Greencoat UK Wind PLC Annual Report for the year ended 31 December 2023 ## Strategic Report continued Task Force on Climate Related Financial Disclosures Risk Management (TCFD) continued As a full scope UK AIFM, the Investment Manager has Strategy continued established a Risk Management Committee that meets Climate scenarios continued on a quarterly basis to discuss, amongst other matters, the risk framework of the Group and investee High physical risk scenario companies including processes for identifying, Physical risks may consist of acute physical risk, which assessing and managing climate related risks. The can refer to event driven perils including increased Company’s risk matrix, reviewed and approved by the severity and frequency of extreme weather events, and Board, includes climate related risks. chronic physical risk, which can refer to longer term shifts in climate patterns that cause sea level rises, heat All risks identified, including climate related risks are waves, droughts and desertification. assessed based on likelihood, impact and mitigation. The risk assessment is carried out on a qualitative basis The Board and the Investment Manager continue to by the Investment Manager, although consideration is believe that a scenario where global temperature given to how quantitative measures can be used to o increases are significantly higher than 2 C (a high support climate related risk assessment. The risk matrix physical risk scenario) would not lead to any significant is then presented to the Board for discussion and physical risk to the Group’s wind farms, which are approval on an annual basis. designed to operate in extreme weather conditions and are typically not located in areas prone to flooding. As mentioned above, climate related risks can be classified into two broad categories: (i) risks associated The Board recognises that climate change could lead with the transition to a decarbonised economy; and (ii) to more extreme weather events including extreme risks associated with the physical impacts of climate temperature changes, increased electrical storms, change. The table below aims to summarise the most increased rainfall levels and changes in wind speed and material transition and physical risks associated with direction. The Board does not consider these potential climate change and the extent to which the Board changes to be a material risk to the Group because the considers the impact high or low, based on exposure wind farms are designed to operate in extreme and mitigation actions. weather conditions, are typically not located in areas prone to flooding, and insurance and business To ensure strong performance and risk mitigation, the continuity plans are in place to manage such an event, Group has specific oversight on environmental and should it occur. social issues including climate change. It reinforces this oversight with a range of activities, including: In the medium to long term, the Board and the Investment Manager recognise that there is a risk that • appointing at least one senior representative from weather systems may change as a result of higher the Investment Manager to the boards of the wind temperature change scenarios, but do not believe it is farm companies to ensure monitoring and possible, at this time, to determine whether this would influence of both financial and ESG performance, impact the Group positively or negatively. The Board including climate related risks and opportunities; and the Investment Manager will continue to and investigate options for physical climate risk models and • carrying out due diligence during the acquisition tools to support further assessment of the potential of new wind farms in accordance with the physical risks associated with the Group and wind farm Investment Manager’s established procedures and portfolio. ESG Policy, which requires an analysis of climate In 2022, the Investment Manager, with the assistance issues. of an independent consultant, completed a risk The Investment Manager’s Investment Committee modelling exercise for a representative sample of the comprises experienced senior managers. Whilst wind farm SPVs reflecting climate related hazard making investment decisions, due consideration is exposure over a future period of time. The outcomes given to climate related risks as well as to opportunities of the risk modelling exercise were reviewed by the identified during due diligence. 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. 34 ## 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. Bicker Fen G R E E N C O A T 35 U K W I N D Greencoat UK Wind PLC Annual Report for the year ended 31 December 2023 ## Strategic Report continued ### Task Force on Climate Related Financial Disclosures (TCFD) continued #### Metrics and Targets continued | Disclosure | Year ended 31 December 2023 | Year ended 31 December 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. 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 ## Strategic Report continued 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 G R E E N C O A T 37 U K W I N D 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) ![img-3.jpeg](img-3.jpeg) 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) ![img-4.jpeg](img-4.jpeg) 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. 38 GREENCOAT^{}[] UK WIND ## Board of Directors continued ### Nick Winser C.B.E. Senior Independent Director (appointed 1 January 2022) ![img-5.jpeg](img-5.jpeg) 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) ![img-6.jpeg](img-6.jpeg) 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) ![img-7.jpeg](img-7.jpeg) 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. 39 Greencoat UK Wind PLC Annual Report for the year ended 31 December 2023 ## Board of Directors continued ### Shonaid Jemmett-Page (appointed 5 December 2012 and retired 28 April 2023) ![img-8.jpeg](img-8.jpeg) 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) ![img-9.jpeg](img-9.jpeg) 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 ## 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. G R E E N C O A T 41 U K W I N D Greencoat UK Wind PLC Annual Report for the year ended 31 December 2023 ## Report of the Directors The Directors present their Annual Report, together Major Interests in Shares with the consolidated financial statements of Significant shareholdings as at 15 February 2024 are Greencoat UK Wind PLC for the year to 31 December detailed below. 2023. The Corporate Governance Report on pages 50 Ordinary to 55 forms part of this report. shares held % 15 February Details of the Directors who held office during the year Shareholder 2024 and as at the date of this report are given on pages 38 to 41. BlackRock Investment Management 7.32 Rathbone Investment Management 5.58 Capital Structure Investec Wealth & Investment 4.61 The Company has one class of ordinary shares which Schroder Investment Management 4.58 carry no rights to fixed income. Shareholders are Newton Investment Management 4.16 entitled to all dividends paid by the Company and, on Hargreaves Lansdown Asset Management 3.69 a winding up, provided the Company has satisfied all Charles Stanley 3.02 of its liabilities, the shareholders are entitled to all of the surplus assets of the Company. Significant shareholdings as at 31 December 2023 are detailed below. Shareholders will be entitled to attend and vote at all general meetings of the Company and, on a poll, to Ordinary one vote for each ordinary share held. shares held % 31 December | Authority to Purchase Own Shares | Shareholder 2023 | | --- | --- | | The current authority of the Company to make market | BlackRock Investment Management 8.07 | | purchases of up to 14.99 per cent of its issued share | Rathbone Investment Management 5.49 | | capital expires at the conclusion of the 2024 AGM. | Investec Wealth & Investment 4.65 | | Special resolution 15 will be proposed at the | Schroder Investment Management 4.65 | forthcoming AGM seeking renewal of such authority Newton Investment Management 4.38 until the next AGM (or 30 June 2025, whichever is Hargreaves Lansdown Asset Management 3.50 earlier). The price paid for the shares will not be less Charles Stanley 3.02 than the nominal value or more than the maximum amount permitted to be paid in accordance with the Companies Act 2006 Disclosures rules of the UK Listing Authority in force at the date of purchase. This power will be exercised only if, in the In accordance with Schedule 7 of the Large and opinion of the Directors, a repurchase would be in the Medium Sized Companies and Groups (Accounts and best interests of shareholders as a whole. Any Reports) Regulations 2008 the Directors disclose the shares repurchased under this authority will either be following information: cancelled or held in treasury at the discretion • the Company’s capital structure is detailed in note of the Board for future resale in appropriate 15 to the financial statements and all shareholders market conditions. have the same voting rights in respect of the share The Directors believe that the renewal of the capital of the Company. There are no restrictions Company’s authority to purchase shares, as detailed on voting rights that the Company is aware of, nor above, is in the best interests of shareholders as a any agreement between holders of securities that whole and therefore recommend shareholders to vote result in restrictions on the transfer of securities or in favour of special resolution 15. on voting rights; The Directors also recommend shareholders to vote in • there exist no securities carrying special rights with favour of resolutions 12, 13 and 14, which renew their regard to the control of the Company; authority to allot equity securities for the purpose of • the Company does not have an employees’ share satisfying the Company’s obligations to pay the Equity scheme; Element of the Investment Manager’s fee, and also their authority to allot equity securities for cash either • the rules concerning the appointment and pursuant to the authority conferred by resolution 12 or replacement of Directors are contained in the by way of a sale of treasury shares. Company’s Articles of Association and the Companies Act 2006; 42 GREENCOAT UK WIND # Report of the Directors continued ## 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 CO₂ emissions on a net basis (at a rate of approximately 0.4t CO₂ 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. 43 Greencoat UK Wind PLC Annual Report for the year ended 31 December 2023 ## 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 Kype Muir Extension 44 GREENCOAT^{}[] UK WIND # Directors' Remuneration Report 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 appointment letter | Expiry date of current 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. 45 Greencoat UK Wind PLC Annual Report for the year ended 31 December 2023 ## Directors' Remuneration Report continued ### Annual Report on Remuneration During the year, the basic fee for non-executive Directors increased by £10,000 per annum to £65,000, with effect from 1 January 2023, with the Senior Independent Director and the Audit Committee Chairman receiving an additional £5,000 and £10,000 per annum respectively. The Chairman's basic fee was also increased by £25,000 to £110,000 per annum. The level of fees for Directors were benchmarked during the year by independent consultants, Heidrick & Struggles, as in line with the market. The Company is the largest independent generator of renewable electricity in the UK. Its GAV has grown to £6.2 billion through acquisitions and equity raisings and, in the last 3 years, the Board and its committees have held 84 meetings. For the first time since listing in 2013, the Board will be proposing a resolution to increase the aggregate amount of fees to be paid to Directors per annum to £500,000, up from £400,000, via an amendment to Article 85 of the Company's Articles of Association at the 2024 AGM. The Directors remain eligible to receive discretionary payments where significant additional work is incurred, however, no discretionary payments were made during the year. The table below (audited information) shows the total remuneration earned by each individual Director during the current year: | Paid in the year to 31 December 2023 | Fixed remuneration | Discretionary remuneration^{(1)} | Total remuneration | | --- | --- | --- | --- | | Lucinda Riches C.B.E. (Chairman)^{(2)} | £97,178 | — | £97,178 | | Caoimhe Giblin (Audit Committee Chairman) | £75,000 | — | £75,000 | | Nick Winser C.B.E. (Senior Independent Director)^{(3)} | £68,397 | — | £68,397 | | Martin McAdam | £65,000 | — | £65,000 | | Jim Smith^{(4)} | £43,630 | — | £43,630 | | Shonaid Jemmett-Page^{(5)} | £35,562 | — | £35,562 | | **Total** | **£384,767** | **—** | **£384,767** | $^{(1)}$ The Directors received no additional discretionary payment during the year. $^{(2)}$ Appointed as Chairman with effect from 28 April 2023. $^{(3)}$ Appointed as Senior Independent Director with effect from 28 April 2023. $^{(4)}$ Appointed to the Board with effect from 1 May 2023. $^{(5)}$ Retired with effect from 28 April 2023. The table below (audited information) shows the total remuneration earned by each individual Director during the prior year: | Paid in the year to 31 December 2022 | Fixed remuneration | Discretionary remuneration^{(1)} | Total remuneration | | --- | --- | --- | --- | | Shonaid Jemmett-Page (Chairman) | £85,000 | — | £85,000 | | Caoimhe Giblin (Audit Committee Chairman) | £65,000 | — | £65,000 | | Lucinda Riches C.B.E. (Senior Independent Director)^{(2)} | £58,397 | — | £58,397 | | Martin McAdam | £55,000 | — | £55,000 | | Nick Winser C.B.E. | £55,000 | — | £55,000 | | William Rickett C.B.^{(3)} | £19,397 | — | £19,397 | | **Total** | **£337,794** | **—** | **£337,794** | $^{(1)}$ The Directors received no additional discretionary payment during the year. $^{(2)}$ Appointed as Senior Independent Director with effect from 28 April 2022. $^{(3)}$ Retired with effect from 28 April 2022. 46 GREENCOAT^{}[] UK WIND # Directors' Remuneration Report continued ## Annual Report on Remuneration continued The table below (audited information) shows the change in total remuneration earned by each individual Director over prior years: | Paid in the year to 31 December 2023 | 2023 % change from prior year^{(1)} | 2022 % change from prior year | 2021 % change from prior year | 2020 % change from prior % change | | --- | --- | --- | --- | --- | | Lucinda Riches C.B.E. (Chairman)^{(2)} | 66% | 6% | 10% | 11% | | Caoimhe Giblin (Audit Committee Chairman) | 15% | 0% | 15% | 42% | | Nick Winser C.B.E. (Senior Independent Director)^{(3)} | 24% | 100% | n/a | n/a | | Martin McAdam | 18% | 0% | 10% | 0% | | Jim Smith^{(4)} | 100% | n/a | n/a | n/a | | Shonaid Jemmett-Page^{(5)} | -58% | 0% | 16% | 22% | | William Rickett C.B.^{(6)} | n/a | 0% | 9% | 0% | | Tim Ingram^{(7)} | n/a | n/a | -100% | -13% | | Dan Badger^{(8)} | n/a | n/a | n/a | -100% | $^{(1)}$ Movement in individual Director's salary based on annualised total figures. $^{(2)}$ Appointed as Chairman with effect from 28 April 2023. $^{(3)}$ Appointed as Senior Independent Director with effect from 28 April 2023. $^{(4)}$ Appointed to the Board with effect from 1 May 2023. $^{(5)}$ Retired with effect from 28 April 2023. $^{(6)}$ Retired with effect from 28 April 2022. $^{(7)}$ Retired with effect from 30 April 2020. $^{(8)}$ Retired with effect from 31 July 2019. ## 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 of 1p each held at 31 December 2023 | Ordinary shares of 1p each held at 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: 47 Greencoat UK Wind PLC Annual Report for the year ended 31 December 2023 ## 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 290 270 250 230 210 % 190 170 150 130 110 90 Burbo Bank Extension | Dec | Dec | Dec | Dec | Dec | Dec | Dec | Dec | Dec | Dec | Dec | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | 2013 | 2014 | 2015 | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | | Greencoat UK Wind PLC | | | | FTSE 250 | | | Bloomberg Barclays Sterling | | | | 48 (rebased to 100) Corporate Bond Index (rebased to 100) ## Statement of Directors’ Responsibilities The Directors are responsible for preparing the Annual assets of the Company and hence for taking reasonable Report and the financial statements in accordance with steps for the prevention and detection of fraud and applicable law and regulations. other irregularities. The Directors are responsible for ensuring that the Annual Report, taken as a whole, is Company law requires the Directors to prepare fair, balanced and understandable and provides the financial statements for each financial year. Under that information necessary for shareholders to assess the law the Directors are required to prepare the Group’s Group’s performance, business model and strategy. financial statements, and have elected to prepare the Company’s financial statements, in accordance with UK The Directors are also responsible under section 172 adopted international accounting standards and with of the Companies Act 2006 to promote the success of the requirements of the Companies Act 2006 as the Company for the benefit of its members as a whole applicable to companies reporting under those and in doing so have regard for the needs of wider standards. Under company law the Directors must not society and other stakeholders. approve the financial statements unless they are Website Publication satisfied that they give a true and fair view of the state of affairs of the Group and Company and of the profit The Directors are responsible for ensuring the Annual or loss for the Group for that period. Report and the financial statements are made available on a website. Financial statements are published on In preparing these financial statements, the Directors the Company’s website in accordance with legislation are required to: in the UK governing the preparation and dissemination of financial statements, which may vary from legislation • select suitable accounting policies and then apply in other jurisdictions. The maintenance and integrity of them consistently; the Company’s website is the responsibility of the • present information, including accounting policies, Directors. The Directors’ responsibilities also extend to | | in a manner that provides relevant, reliable, | the ongoing integrity of the financial statements | | --- | --- | --- | | | comparable and understandable information; | contained therein. | | • provide additional disclosures when compliance | | Directors’ Responsibilities Pursuant to DTR4 | | | with the specific requirements of IFRS are | The Directors confirm to the best of their knowledge | | | insufficient to enable users to understand the | that: | impact of particular transactions, other events and • the Group’s financial statements have been conditions on the Group and Company financial prepared in accordance with UK adopted position and performance; international accounting standards and with the • make judgements and accounting estimates that requirements of the Companies Act 2006 as are reasonable and prudent; applicable to companies reporting under those standards, and give a true and fair view of the • state whether they have been prepared in assets, liabilities, financial position and profit and accordance with UK adopted international loss of the Group; and accounting standards, subject to any material departures disclosed and explained in the financial • the Annual Report includes a fair review of the statements; development and performance of the business and the financial position of the Group and the • prepare the financial statements on the going Parent Company, together with a description of concern basis unless it is inappropriate to presume the principal risks and uncertainties that they face. that the Company will continue in business; and On behalf of the Board • 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 Lucinda Riches C.B.E. explain the company’s transactions and disclose with Chairman reasonable accuracy at any time the financial position of the company and enable them to ensure that the 28 February 2024 financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the G R E E N C O A T 49 U K W I N D Greencoat UK Wind PLC Annual Report for the year ended 31 December 2023 ## Corporate Governance Report This Corporate Governance Report forms part of the • The trust of stakeholders is very important to | Report of the Directors as further disclosed on | maintain the Company’s reputation, particularly | | --- | --- | | pages 42 to 44. The Board operates under a | for execution certainty for asset sellers and | | framework for corporate governance which is | delivery of investment promises to investors. | appropriate for an investment company. All companies • Respect for differing opinions is to be shown with a premium listing of equity shares in the UK are across all interaction and communication. required under the UK Listing Rules to report on how they have applied the UK Code in their Annual Report • Individual empowerment is sought with growth in and financial statements. responsibility and autonomy being actively encouraged. The Company became a member of the AIC with effect from 27 March 2013 and has therefore put in place • Collaboration and effectively utilising the arrangements to comply with the AIC Code and, in collective skills of all participants is important to accordance with the AIC Code, complies with the ensure ideas and information are best shared. UK Code. The Board The AIC Code, as explained by the AIC Guide, As at the date of this report, the Board consists of 5 addresses all the principles set out in the UK Code, as non-executive Directors and represents a range of well as setting out additional principles and investment, financial and business skills and recommendations on issues that are of specific experience. During the year, Shonaid Jemmett-Page relevance to investment companies such as the retired as Director and Chairman of the Company with Company. effect from 28 April 2023, and Jim Smith was The AIC Code and the AIC Guide are available on the appointed as a Director with effect from 1 May 2023. AIC’s website, www.theaic.co.uk. The UK Code is The Chairman of the Board is Lucinda Riches C.B.E., available on the FRC’s website, www.frc.org.uk. who was selected to succeed Shonaid following the The Company has complied with the 2023 AGM. In considering the independence of the recommendations of the AIC Code throughout the Chairman, the Board took note of the provisions of the year, where applicable. AIC Code relating to independence, and has determined that Lucinda remains independent as a non- Purpose, Culture and Values executive Director with a clear division of responsibilities The Company’s purpose remains clear; to provide from the Investment Manager. The Senior Independent shareholders with an annual dividend that increases in Director is Nick Winser C.B.E., who was selected to line with RPI inflation while preserving the capital value succeed Lucinda following the 2023 AGM. The of its investment portfolio in the long term on a real Company, as an Investment Trust, has no employees and basis through reinvestment of excess cash flow. therefore there is no requirement for a chief executive. The Company provides investors with the opportunity The Articles of Association provide that Directors shall to participate directly in the ownership of UK wind retire and offer themselves for re-election at the first farms, so increasing the resources and capital AGM after their appointment and at least every 3 years dedicated to the deployment of renewable energy and thereafter. However, the AIC Code requires that the reduction of greenhouse gas emissions. Directors be subject to an annual election by shareholders, and the Directors comply with this As an investment trust with no employees, the Board requirement. All of the Directors, other than Martin have agreed that its culture and values should be McAdam, shall offer themselves for re-election at the aligned with those of the Investment Manager and forthcoming AGM. Having considered their centred on long term relationships with the Company’s effectiveness, demonstration of commitment to the role, key stakeholders and sustainable investment as length of service, attendance at meetings and follows: contribution to the Board’s deliberations, the Board approves the nomination for re-election of the Directors. • Integrity is at the heart of every activity, with importance being placed on transparency, trustworthiness and dependability. 50 ## Corporate Governance Report continued The Board continued diversity policy is considered in conjunction with all Board appointments. The Board’s composition is The Company’s view is that the continuity and detailed within the Strategic Report on page 24. experience of its Directors are important and that a suitable balance needs to be struck with the need for Performance and Evaluation independence and the refreshing of the skills and Pursuant to Provision 26 of the AIC Code, the Board expertise of the Board. The Company believes that undertakes a formal and rigorous evaluation of its some limited flexibility in its approach to Director performance each financial year. As a FTSE 250 rotation and Chair tenure will enable it to manage company, in keeping with the provisions of the AIC succession planning more effectively, as set out below. Code, it is the Company’s policy that every 3 years an During the year, the Board conducted comprehensive external consultant, who has no connection with the recruitment processes aimed at ensuring a sustained Company, carries out a formal review of the Board’s balance of skills and experience on the Board in performance. This was last conducted in 2022 and addition to maintaining diversity. In addition to the therefore the Board will be subject to an external appointment of Jim Smith, the Board engaged an evaluation again in 2025. external recruitment consultant to recruit a non- executive Director to replace Martin who has An internal evaluation of the Board, the Committees surpassed the nine year director tenure limit and and individual Directors was conducted during 2023 in therefore will not seek re-election at the 2024 AGM. the form of annual performance appraisals, On 1 March 2024, Abigail Rotheroe will join the Board questionnaires and discussions to determine bringing over 20 years’ experience from the effectiveness and performance in various areas, as well investment industry and knowledge of fund as the Directors’ continued independence and tenure. governance and sustainable investing. This process was facilitated by the Company Secretary. The reviews concluded that the overall performance of The terms and conditions of appointment of non- the Board and its Committees was satisfactory and the executive Directors are available for inspection from Board was confident in its ability to continue to govern the Company’s registered office. the Company well. Chair Tenure Policy Each individual Director’s training and development The Company’s policy on Chair tenure is available on needs are reviewed annually. All new Directors receive the Company website. The Company’s policy on Chair an induction from the Investment Manager and tenure is that the Chairman should normally serve no Company Secretary, which includes the provision of longer than 9 years as a Director and Chairman but, information about the Company and their where it is in the best interests of the Company, its responsibilities. In addition, site visits and specific shareholders and stakeholders, the Chairman may Board training sessions are arranged involving serve for a limited time beyond that to help the presentations on relevant topics on a regular basis. Company manage succession planning whilst at the same time still address the need for regular Board Responsibilities refreshment and diversity. In such circumstances the The Board will meet, on average, 6 times in each independence of the other Directors will ensure that calendar year for scheduled Board meetings and on an the Board as a whole remains independent. ad hoc basis as and when necessary. At each meeting the Board follows a formal agenda that will cover the Diversity Policy business to be discussed. Between meetings there is The Company’s policy on Board diversity is available regular contact with the Investment Manager and the on the Company website and sets out the approach Administrator. The Board requires to be supplied with that will be adopted to ensure that the Board remains information by the Investment Manager, the appropriately balanced, and relevant to the Company’s Administrator and other advisers in a form appropriate operations. The composition of the Board is reviewed to enable it to discharge its duties. annually by the Nomination Committee, including the balance of skills, knowledge, experience and the G R E E N C O A T 51 U K W I N D Greencoat UK Wind PLC Annual Report for the year ended 31 December 2023 ## Corporate Governance Report continued with regard to any changes that are deemed necessary. Board Responsibilities continued Terms of reference for the Nominations Committee The Board has responsibility for ensuring that the have been approved by the Board and are available on Company keeps proper accounting records which the Company’s website. disclose with reasonable accuracy at any time the financial position of the Company and which enable it The Nominations Committee met 5 times during the to ensure that the financial statements comply with year to consider Director remuneration and Board applicable regulation. It is the Board’s responsibility to succession planning, as well as to commence a Director present a fair, balanced and understandable Annual recruitment process with the assistance of an external Report, which provides the information necessary for recruitment consultant, Heidrick & Struggles. shareholders to assess the performance, strategy and business model of the Company. This responsibility Communications and Disclosure Committee extends to the half year and other price-sensitive The Company has established a Communications and public reports. Disclosure Committee which is required to meet at least once a year. The committee has responsibility for, Audit Committee amongst other things, determining on a timely basis The Company’s Audit Committee is chaired by the disclosure treatment of material information, and Caoimhe Giblin and consists of a minimum of 3 assisting in the design, implementation and periodic members. In accordance with best practice, the evaluation of disclosure controls and procedures. The Company’s Chairman is not a member of the Audit Committee also has responsibility for the identification Committee however she does attend Audit Committee of inside information for the purpose of maintaining meetings as and when deemed appropriate. The Audit the Company’s insider list. Committee Report which is on pages 56 to 59 of this report describes the work of the Audit Committee. Terms of reference for the Communications and Disclosure Committee have been approved by the Management Engagement Committee Board and are available on the Company’s website. The Company’s Management Engagement Committee Membership consists of the Chairman (or one other comprises all of the Directors and is required to meet Director) and one of Stephen Lilley and Laurence at least once per year. The Chairman of the Fumagalli (to be succeeded by Matt Ridley on 1 March Management Engagement Committee is Lucinda 2024). Additional members of the Committee may be Riches C.B.E. The Management Engagement appointed and existing members removed by the Committee’s main function is to keep under review the Committee. The membership of the Committee is performance of the Investment Manager and make reviewed by the Board on a periodic basis and at least recommendations on any proposed amendment to the once a year. Investment Management Agreement. The AIC Code recommends that companies appoint a The Management Engagement Committee met once Remuneration Committee, however the Board has not during the year and agreed an amendment to the deemed this necessary, as being wholly comprised of Investment Management Agreement with the non-executive Directors, the whole Board considers Investment Manager. these matters. Terms of reference for the Management Engagement The Investment Manager Committee have been approved by the Board and are The Board has entered into the Investment available on the Company’s website. Management Agreement with the Investment Manager under which the Investment Manager is Nominations Committee responsible for developing strategy and the day-to-day The Company’s Nominations Committee comprises all management of the Group’s investment portfolio, in of the Directors and is required to meet at least once accordance with the Group’s Investment Objective and per year. The Chairman of the Nominations Committee Investment Policy, subject to the overall supervision of is Lucinda Riches C.B.E. The Nominations Committee’s the Board. A summary of the fees paid to the main function is to plan for Board succession and to Investment Manager are given in note 3 to the financial review annually the structure, size and composition of statements. the Board and make recommendation to the Board 52 ## Corporate Governance Report continued The number of meetings of the committees of the The Investment Manager continued Board attended in the year to 31 December 2023 by The Investment Management Agreement may be each committee member is set out below: terminated with immediate effect and without compensation, by either the Investment Manager or Management Audit Engagement Nominations the Company if the other party has gone into Committee Committee Committee liquidation, administration or receivership or has Meetings Meetings Meetings (Total of 4) (Total of 1) (Total of 5) committed a material breach of the Investment (1) Management Agreement. Lucinda Riches C.B.E. 2 1 5 Martin McAdam 4 1 5 The Board as a whole reviewed the Company’s Caoimhe Giblin 4 1 5 compliance with the UK Corporate Governance Code, Nick Winser C.B.E. 4 1 5 the Listing Rules, the Disclosure Guidance and (2) Jim Smith 21 4 Transparency Rules and the AIC Code. In accordance (3) with the Listing Rules, the Directors confirm that the Shonaid Jemmett-Page n/a 01 continued appointment of the Investment Manager (1) Appointed as Chairman and resigned from Audit Committee with under the current terms of the Investment effect from 28 April 2023, at which point 2 Audit Committee Management Agreement is in the interests of meetings had taken place. shareholders. The Board also reviewed the (2) Appointed to the Board with effect from 1 May 2023, at which performance of other service providers and examined point 2 Audit Committee meetings, no Management Engagement Committee meetings and 1 Nominations the effectiveness of the Company’s internal control Committee meeting had taken place. systems during the year. (3) Resigned as Chairman with effect from 28 April 2023, at which point no Management Engagement Committee meetings and Board Meetings, Committee Meetings and 1 Nominations Committee meeting had taken place. Directors’ Attendance Internal Control The number of meetings of the full Board attended in the year to 31 December 2023 by each Director is set The Board is responsible for the Company’s system of out below: internal control and for reviewing its effectiveness. The Board confirms that it has an ongoing process for Scheduled Additional Board Meetings Board Meetings identifying, evaluating and managing the significant (Total of 5) (Total of 7) risks faced by the Company. This process has been in Lucinda Riches C.B.E. 5 6 place throughout the year and has continued since the year end. Martin McAdam 5 5 Caoimhe Giblin 5 6 The Company’s principal risks and uncertainties are Nick Winser C.B.E. 5 6 detailed on pages 20 to 22 of this report. As further (1) Jim Smith 22 explained in the Audit Committee Report, the risks of (2) Shonaid Jemmett-Page 35 the Company are outlined in a risk matrix which was reviewed and updated during the year. The Board (1) Appointed with effect from 1 May 2023, at which point 3 continually reviews its policy setting and updates the risk scheduled Board meetings and 5 additional Board meetings had matrix at least annually to ensure that procedures are in taken place. (2) place with the intention of identifying, mitigating and Resigned with effect from 28 April 2023, at which point 3 scheduled Board meetings and 5 additional Board meetings had minimising the impact of risks should they crystallise. taken place. 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. G R E E N C O A T 53 U K W I N D Greencoat UK Wind PLC Annual Report for the year ended 31 December 2023 ## Corporate Governance Report continued the principal decisions that have been made in the Internal Control continued interests of stakeholders can be found within the The Board holds an annual risk and strategy discussion, section 172 statement as outlined on pages 23 and 24. which enables the Directors to consider risk outside the Regular feedback is provided to the Board to ensure scheduled quarterly Board meetings. This enables they understand the views of stakeholders and a emerging risks to be identified and discussions on stakeholder matrix is reviewed at each scheduled horizon scanning to occur, so the Board can consider Board and Audit Committee meeting to record the how to manage and potentially mitigate any relevant stakeholders considered for each item of business. emerging risks. Relations with Shareholders The principal features of the internal controls systems The Company welcomes the views of shareholders and which the Investment Manager and Administrator have places great importance on communication with its in place in respect of the Group’s financial reporting shareholders. The Investment Manager is available at all are focused around the 3 lines of defence model and reasonable times to meet with principal shareholders include: and key sector analysts. The Chairman, the Senior • internal review of all financial reports; Independent Director and other Directors are also available to meet with shareholders, if required. • review by the Board of financial information prior to its publication; All shareholders have the opportunity to put questions to the Company at its registered address or via email. • authorisation limits over expenditure incurred by The AGM of the Company also provides a forum for the Group; shareholders to meet and discuss issues with the Directors and Investment Manager. The Company • review of valuations; and issues regulatory announcements via the London Stock • authorisation of investments. Exchange in respect of routine reporting obligations, periodic financial and portfolio information updates Whistleblowing and in response to other events. The Board has considered the AIC Code The Board receives comprehensive shareholder reports recommendations in respect of arrangements by which from the Company’s Registrar and regularly monitors staff of the Investment Manager or Administrator may, the views of shareholders and the shareholder profile in confidence, raise concerns within their respective of the Company. The Board is also kept fully informed organisations about possible improprieties in matters of all relevant market commentary on the Company by of financial reporting or other matters. It has concluded the Investment Manager. that adequate arrangements are in place for the proportionate and independent investigation of such Relations with Other Stakeholders matters and, where necessary, for appropriate follow- The Company values its relationships with its debt up action to be taken within their organisation. providers. The Investment Manager ensures the Amendment of Articles of Association Company continues to meet its debt covenants and reporting requirements. During the year, the Company The Company’s Articles of Association may be drew £640 million of new term debt and repaid £150 amended by the members of the Company by special million of existing term debt, as disclosed in note 13 to resolution (requiring a majority of at least 75 per cent the financial statements. of the persons voting on the relevant resolution). The Investment Manager conducts presentations with Engagement with Stakeholders analysts and investors to coincide with the The Company is committed to maintaining good announcement of the Company’s full and half year communications and building positive relationships results, providing an opportunity for discussions and with all stakeholders, including shareholders, debt queries on the Company’s activities, performance and providers, analysts, potential investors, suppliers and key metrics. In addition to these semi-annual the wider communities in which the Group and its presentations, the Investment Manager meets investee companies operate. This includes regular regularly with analysts and investors to provide further engagement with the Company’s shareholders and updates with how the Company and the investment other stakeholders by the Board, the Investment portfolio are performing. Manager and the Administrator. Highlights of some of 54 ## Corporate Governance Report continued Relations with Other Stakeholders continued board for all sites to ensure that the environment in and surrounding each windfarm is carefully protected. The Directors and Investment Manager receive informal feedback from analysts and investors, which The Directors recognise that the long term success of is presented to the Board by the Company’s Joint the Company is linked to the success of the Brokers. The Company Secretary also receives informal communities in which the Group, and its investee feedback via queries submitted through the companies, operate. During the year, a number of Company’s website and these are addressed by the community projects were supported by the Group’s Board, the Investment Manager or the Company investee companies. Secretary, where applicable. Key decisions made or approved by the Directors The Company recognises that relationships with during the year and the impact of those decisions on suppliers are enhanced by prompt payment and the the Company’s members and wider stakeholders is Company’s Administrator ensures all payments are disclosed further in the Strategic Report on pages 23 processed within the contractual terms agreed with the to 24. individual suppliers. Shareholders may also find Company information or The Company, via its Investment Manager, has long contact the Company through its website. term and important relationships with its operational site managers and turbine operations and maintenance On behalf of the Board 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. Lucinda Riches C.B.E. Chairman of the Board Similarly, environment protection issues are reported on every month by the site managers and annual 28 February 2024 habitat management plans are agreed by each SPV Clyde G R E E N C O A T 55 U K W I N D Greencoat UK Wind PLC Annual Report for the year ended 31 December 2023 ## Audit Committee Report At the date of this report, the Audit Committee During the year, the Audit Committee undertook an comprised Caoimhe Giblin (Chairman), Martin assessment of its obligations and processes under the McAdam, Nick Winser C.B.E. and Jim Smith. The AIC FRC’s Minimum Standard for audit committees Code has a requirement that at least one member of published during the year. the Audit Committee should have recent and relevant Overview financial experience and the Audit Committee as a whole shall have competence relevant to the sector. During the year, the Audit Committee’s discussions The Board is satisfied that the Audit Committee is have been broad ranging. In addition to the 4 formally properly constituted in these respects. The convened Audit Committee meetings, the Audit qualifications and experience of all Audit Committee Committee has had regular contact and meetings with members are disclosed on pages 38 to 41 of this report. the Investment Manager, the Administrator and the Auditor. These meetings and discussions focused on, The Audit Committee operates within clearly defined but were not limited to: terms of reference which were reviewed during the financial year and approved by the Board, and include • a detailed analysis of the Company’s quarterly all matters indicated by Disclosure Guidance and NAVs; Transparency Rule 7.1 and the AIC Code and are • reviewing the updated risk matrix of the Company available for inspection on the Company’s website: and assessing the Company’s risk management www.greencoat-ukwind.com. The Company’s Annual systems; Report complies with the provisions of the Competition and Markets Authority’s (CMA) Order. • reviewing the Company’s corporate governance framework, including climate related reporting Audit Committee meetings are scheduled at disclosures under the TCFD framework; appropriate times in the reporting and auditing cycle. The Chairman, other Directors and third parties may • reviewing the internal controls framework for the be invited to attend meetings as and when deemed Company, the Administrator and the Investment appropriate. Manager, considering the need for a separate internal audit function; Summary of the Role and Responsibilities of the Audit Committee • considering any incidents of internal control failure The duties of the Audit Committee, amongst other or fraud and the Company’s response; things, include reviewing the Company’s quarterly NAV, half year report, Annual Report and financial • considering the ongoing assessment of the statements and any formal announcements relating to Company as a going concern; the Company’s financial performance. • considering the principal risks and period of The Audit Committee is the forum through which the assessment for the longer term viability of the external Auditor reports to the Board and is Company; responsible for reviewing the terms of appointment of • monitoring the ongoing appropriateness of the the Auditor, together with their remuneration. On an Company’s status as an investment entity under ongoing basis, the Audit Committee is responsible for IFRS 10, in particular following an acquisition; reviewing the objectivity of the Auditor along with the effectiveness of the audit and the terms under which • monitoring compliance with AIFMD, the AIC code the Auditor is engaged to perform non-audit services and other regulatory and governance frameworks; (restricted to the limited scope review of the half year report and reporting accountant services in relation to • reviewing and approving the audit plan in relation equity raises). The Audit Committee is also responsible to the audit of the Company’s Annual Report and for reviewing the Company’s corporate governance financial statements; framework, system of internal controls and risk • monitoring the performance of the Auditor and its management, ensuring they are suitable for an engagement with the Investment Manager and investment company. Administrator; The Audit Committee reports its findings to the Board, • monitoring compliance with the Company’s policy identifying any matters on which it considers that on the provision of non-audit services by the action or improvement is needed, and makes Auditor; recommendations on the steps to be taken. 56 ## Audit Committee Report continued Overview continued provide additional opportunities for open dialogue and feedback. Matters typically discussed include the • reviewing the effectiveness, resources, Auditor’s assessment of the transparency and qualifications and independence of the Auditor; openness of interactions with the Investment Manager • reviewing the Company’s adherence to the and the Administrator, confirmation that there has responsibilities within the FRC Audit Committees been no restriction in scope placed on them, the and the External Audit: Minimum Standard; and independence of their audit and how they have exercised professional scepticism. • reviewing the anti-money laundering procedures for the Company, the Administrator and the Significant Issues Investment Manager. The Audit Committee discussed the planning, conduct and conclusions of the external audit as it proceeded. Financial Reporting At the Audit Committee meeting in advance of the The primary role of the Audit Committee in relation to year end, the Audit Committee discussed and financial reporting is to review with the Investment approved the Auditor’s audit plan. The Audit Manager, the Administrator and the Auditor the Committee identified the carrying value of investments appropriateness of the half year report and Annual as a key area of risk of misstatement in the Company’s Report and financial statements, concentrating on, financial statements. 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 Cotton Farm G R E E N C O A T 57 U K W I N D Greencoat UK Wind PLC Annual Report for the year ended 31 December 2023 ## Audit Committee Report continued Assessment of the Carrying Value of Investments annually. By their nature, these procedures provide a reasonable, but not absolute, assurance against The Group has an accounting policy to designate material misstatement or loss. Regular reports are investments at fair value through profit or loss. provided to the Audit Committee highlighting material Therefore, the most significant risk in the Group’s changes to risk ratings. financial statements is whether its investments are fairly valued due to the uncertainty involved in determining The Audit Committee reviewed the Group’s principal the investment valuations. There is also an inherent risk risks and uncertainties as at 30 June 2023 to determine of management override as the Investment Manager’s that these were unchanged from those disclosed in the fee is calculated based on NAV, as disclosed in note 3 Company’s 2022 Annual Report and remained the most to the financial statements. The Investment Manager likely to affect the Group in the second half of the year. is responsible for calculating the NAV with the assistance of the Administrator, prior to approval by During the year, the Audit Committee discussed and the Board. reviewed in depth the internal controls frameworks in place at the Investment Manager and the Administrator. On a quarterly basis, the Investment Manager provides Discussions were centred around 3 lines of defence: a detailed analysis of the NAV highlighting any assurances at operational level; internal oversight; and movements and assumption changes from the independent objective assurance. The Administrator previous quarter’s NAV. This analysis and the rationale holds the International Standard on Assurance for any changes made is considered and challenged by Engagements (ISAE) 3402 Type 2 certification. This the Chairman of the Audit Committee and entails an independent rigorous examination and testing subsequently considered, challenged and approved by of their controls and processes. the Board. The Audit Committee has satisfied itself that the key estimates and assumptions used in the The Audit Committee concluded that these frameworks valuation model are appropriate and that the were appropriate for the identification, assessment, investments have been fairly valued. The key estimates management and monitoring of financial, regulatory and assumptions include the useful life of the assets, and other risks, with particular regard to the protection the discount rates, the level of wind resource, the rate of the interests of the Company’s shareholders. of inflation, the price at which the power and associated benefits can be sold and the amount of Internal Audit electricity the assets are expected to produce. The Audit Committee continues to review the need for an internal audit function and has decided that the Internal Control systems, processes and procedures employed by the The Audit Committee has established a set of ongoing Company, Investment Manager and Administrator, processes designed to meet the particular needs of the including their own internal controls and procedures, Company in managing the risks to which it is exposed. provide sufficient assurance that an appropriate level of risk management and internal control is maintained. The Investment Manager has identified the principal In addition to this, the Company’s external Depositary risks to which the Company is exposed, and recorded provides cash monitoring, asset verification and them on a risk matrix together with the controls oversight services to the Company. employed to mitigate these risks. The Investment Manager also identifies emerging risks and determines The Audit Committee has therefore concluded that whether any actions are required. A residual risk rating shareholders’ investments and the Company’s assets has been applied to each risk. The Audit Committee is are adequately safeguarded and an internal audit responsible for reviewing the risk matrix and function specific to the Company is considered associated controls before recommending to the unnecessary. Board for consideration and approval, challenging the Investment Manager’s assumptions, to ensure a robust The Audit Committee is available on request to meet internal risk management process. investors in relation to the Company’s financial reporting and internal controls. 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 58 ## Audit Committee Report continued External Auditor Re-appointment Effectiveness of the Audit Process BDO LLP has been the Company’s Auditor from its incorporation on 4 December 2012. The Auditor is The Audit Committee assessed the effectiveness of the required to rotate the audit partner responsible for the audit process by considering BDO LLP’s fulfilment of Group audit every 5 years. A new lead partner was the agreed audit plan through the reporting presented appointed in 2020 and therefore the lead partner will to the Audit Committee by BDO LLP and the be required to rotate after the completion of the 2024 discussions at the Audit Committee meeting, which year end audit. highlighted the major issues that arose during the course of the audit. In addition, the Audit Committee The external audit contract is required to be put to also sought feedback from the Investment Manager tender at least every 10 years. The Audit Committee and the Administrator on the effectiveness of the audit last conducted a formal and competitive external audit process. For this financial year, the Audit Committee tender process in 2022 and resolved to reappoint BDO was satisfied that there had been appropriate focus LLP as the Company’s Auditor for the year ending and challenge on the primary areas of audit risk and 31 December 2023. assessed the quality of the audit process to be good. As described above, the Audit Committee reviewed Non-Audit Services the effectiveness and independence of the Auditor and The Audit Committee has a policy regarding the remains satisfied that the Auditor provides effective provision of non-audit services by the external Auditor. independent challenge to the Board, the Investment The Audit Committee monitors the Group’s Manager and the Administrator. The Audit Committee expenditure on non-audit services provided by the will continue to monitor the performance of the Company’s Auditor who should only be engaged for Auditor on an annual basis and will consider their non-audit services where they are deemed to be the independence and objectivity, taking account of most commercially viable supplier and prior approval appropriate guidelines. of the Audit Committee has been sought. The Audit Committee has therefore recommended to Details of fees paid to BDO LLP during the year are the Board that BDO LLP be proposed for re- disclosed in note 5 to the financial statements. The appointment as the Company’s Auditor at the 2024 Audit Committee approved these fees after a review AGM of the Company. 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 Caoimhe Giblin independence, before giving written approval prior to Chairman of the Audit Committee their engagement. The Audit Committee was satisfied that provision of these non-audit services did not 28 February 2024 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. G R E E N C O A T 59 U K W I N D Greencoat UK Wind PLC Annual Report for the year ended 31 December 2023 ## Independent Auditor’s Report 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; 60 GREENCOAT UK WIND # Independent Auditor's Report continued ## 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** | Valuation of investments | **2023** Yes | **2022** 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. 61 Greencoat UK Wind PLC Annual Report for the year ended 31 December 2023 ## Independent Auditor’s Report continued Key audit matters continued Key audit matter How the scope of our audit addressed the key audit matter Valuation of 100% of the underlying In respect of the equity investments valued using discounted cash investments investment portfolio is flow models, we performed the following specific procedures over represented by 100% of the investments:: (See note 1 and unquoted equity and • Used spreadsheet analysis tools to assess the integrity of the note 9 on loan investments. valuation models and track changes to inputs or structure from pages 75 to 77 the valuation model used in the prior year. The valuation of the and 82 to 84) Investment portfolio is • Agreed wind generation and power price forecasts to independent reports prepared by third-party experts engaged by calculated using management. We have assessed the independence, objectivity discounted cash flow and competence of the experts. models. This is a highly subjective accounting • For the new investments made in the year, we obtained and estimate where there is reviewed agreements and contracts and considered whether an inherent risk of bias these were accurately reflected in the valuation model. arising from the • Challenged the appropriateness of the selection and application investment valuations of key assumptions in the model including the asset life, discount being prepared by the rate, level of wind resource, rate of inflation and power price Investment Manager, forecasts by benchmarking to available industry data and who is remunerated consulting with our internal valuation expert on the above key based on the net asset assumptions. value of the company. • For existing investments, we compared the assumptions used in the current year to the prior year audited assumptions and agreed These estimates include significant changes in assumptions to independent evidence judgements including including available industry data. the useful life of the • We reviewed the corporation tax workings within the valuation assets, the discount model and considered whether these had been calculated rates, the level of wind accurately in the context of current corporation tax legislation and resource, the rate of rates. This includes a consideration of the electricity generator inflation, the price at levy. which the power and associated benefits can • Agreed cash and other net assets to bank statements and investee be sold and the amount company management accounts. of electricity the assets • Considered the accuracy of forecasting by comparing previous are expected to forecasts to actual results and challenged the reasons for produce. significant variances and whether these have been adequately factored into future modelling. For these reasons and • For each of the key assumptions in the valuation models, we the materiality of the considered the appropriateness of the assumption and whether balance in relation to the alternative reasonable assumptions could have been applied. We financial statements as a considered each assumption in isolation as well as in conjunction whole, we considered with other assumptions and the valuation as a whole. Where this to be a key audit appropriate, we sensitised the valuations where other reasonable matter. 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. 62 ## Independent Auditor’s Report continued 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 56.9 58.1 54 55.2 Basis for determining materiality 1.5% net assets 95% of Group materiality | Rationale for the benchmark | Net assets are considered to be the | To address the aggregation risk we | | --- | --- | --- | | applied | benchmark of most interest to the | have restricted the materiality to | | | users of the financial statements in | 95%. | understanding the financial position of the group as an investor in UK wind farms. Performance materiality 42.6m 43.6m 40.5m 41.4m Basis for determining 75% materiality performance 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. 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. G R E E N C O A T 63 U K W I N D Greencoat UK Wind PLC Annual Report for the year ended 31 December 2023 ## Independent Auditor’s Report continued 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. Going concern and longer- • The Directors’ statement with regards to the appropriateness of adopting term viability 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. Other Code provisions • 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. 64 ## Independent Auditor’s Report continued 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. Strategic Report and In our opinion, based on the work undertaken in the course of the audit: Directors’ Report • 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. Directors’ remuneration In our opinion, the part of the Directors’ remuneration report to be audited has been properly prepared in accordance with the Companies Act 2006. Matters on which we are We have nothing to report in respect of the following matters in relation to which required to report by the Companies Act 2006 requires us to report to you if, in our opinion: exception • 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. G R E E N C O A T 65 U K W I N D Greencoat UK Wind PLC Annual Report for the year ended 31 December 2023 ## Independent Auditor’s Report continued 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. 66 ## Independent Auditor’s Report continued 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). G R E E N C O A T 67 U K W I N D Greencoat UK Wind PLC Annual Report for the year ended 31 December 2023 ## Consolidated Statement of Comprehensive Income For the year ended 31 December 2023 | | Note | For the year ended 31 December 2023 £'000 | For the year ended 31 December 2022 £'000 | | --- | --- | --- | --- | | Investment income | 4 | 422,724 | 577,156 | | Unrealised movement in fair value of investments | 9 | (191,402) | 446,096 | | Other income | | 3,059 | 1,878 | | **Total income and gains** | | **234,381** | **1,025,130** | | Operating expenses | 5 | (37,608) | (35,346) | | Investment acquisition costs | | (2,797) | (3,146) | | **Operating profit** | | **193,976** | **986,638** | | Finance expense | 13 | (67,396) | (32,775) | | **Profit for the year before tax** | | **126,580** | **953,863** | | Tax | 6 | (392) | — | | **Profit for the year after tax** | | **126,188** | **953,863** | | **Profit and total comprehensive income attributable to:** | | | | | Equity holders of the Company | | 126,188 | 953,863 | | **Earnings per share** | | | | | Basic and diluted earnings from continuing operations in the year (pence) | 7 | **5.44** | **41.16** | The accompanying notes on pages 74 to 102 form an integral part of the financial statements. 68 GREENCOAT UK WIND # Consolidated Statement of Financial Position As at 31 December 2023 | | Note | 31 December 2023 £'000 | 31 December 2022 £'000 | | --- | --- | --- | --- | | **Non current assets** | | | | | Investments at fair value through profit or loss | 9 | 5,538,636 | 4,959,312 | | | | **5,538,636** | **4,959,312** | | **Current assets** | | | | | Receivables | 11 | 41,129 | 2,487 | | Cash at bank | | 21,805 | 19,783 | | | | **62,934** | **22,270** | | **Current liabilities** | | | | | Loans and borrowings | 13 | (500,000) | (150,000) | | Payables | 12 | (17,573) | (8,354) | | **Net current liabilities** | | **(454,639)** | **(136,084)** | | **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** | Authorised for issue by the Board of Greencoat UK Wind PLC (registered number 08318092) on 28 February 2024 and signed on its behalf by: **Lucinda Riches C.B.E.** Chairman **Caoimhe Giblin** Director The accompanying notes on pages 74 to 102 form an integral part of the financial statements. 69 Greencoat UK Wind PLC Annual Report for the year ended 31 December 2023 ## Statement of Financial Position – Company As at 31 December 2023 | | Note | 31 December 2023 £'000 | 31 December 2022 £'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.** Chairman **Caoimhe Giblin** Director The accompanying notes on pages 74 to 102 form an integral part of the financial statements. 70 GREENCOAT^{}[] UK WIND ## Consolidated and Company Statement of Changes in Equity For the year ended 31 December 2023 | For the year ended 31 December 2023 | Note | Share capital £'000 | Share premium £'000 | Capital redemption reserve £'000 | Retained earnings £'000 | Total £'000 | | --- | --- | --- | --- | --- | --- | --- | | Opening net assets attributable to shareholders (1 January 2023) | | 23,181 | 2,470,396 | — | 1,379,651 | **3,873,228** | | Issue of share capital | 15 | 6 | 1,119 | — | — | **1,125** | | Share buybacks | 15 | (66) | — | 66 | (9,439) | **(9,439)** | | Share buyback costs | | — | — | — | (62) | **(62)** | | Profit and total comprehensive income for the year | | — | — | — | 126,188 | **126,188** | | Interim dividends paid in the year | 8 | — | — | — | (197,043) | **(197,043)** | | **Closing net assets attributable to shareholders** | | **23,121** | **2,471,515** | **66** | **1,299,295** | **3,793,997** | After taking account of cumulative unrealised gains of £522,040,697, the total reserves distributable by way of a dividend as at 31 December 2023 were £777,254,592. | For the year ended 31 December 2022 | Note | Share capital £'000 | Share premium £'000 | Retained earnings £'000 | Total £'000 | | --- | --- | --- | --- | --- | --- | | Opening net assets attributable to shareholders (1 January 2022) | | 23,171 | 2,468,940 | 601,588 | **3,093,699** | | Issue of share capital | 15 | 10 | 1,490 | — | **1,500** | | Share issue costs | 15 | — | (34) | — | **(34)** | | Profit and total comprehensive income for the year | | — | — | 953,863 | **953,863** | | Interim dividends paid in the year | 8 | — | — | (175,800) | **(175,800)** | | **Closing net assets attributable to shareholders** | | **23,181** | **2,470,396** | **1,379,651** | **3,873,228** | 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. The accompanying notes on pages 74 to 102 form an integral part of the financial statements. 71 Greencoat UK Wind PLC Annual Report for the year ended 31 December 2023 ## Consolidated Statement of Cash Flows For the year ended 31 December 2023 | | Note | For the year ended 31 December 2023 £'000 | For the year ended 31 December 2022 £'000 | | --- | --- | --- | --- | | **Net cash flows from operating activities** | 17 | **359,801** | **545,851** | | **Cash flows from investing activities** | | | | | Acquisition of investments | 9 | (820,925) | (484,153) | | Investment acquisition costs | | (2,742) | (4,667) | | Repayment of shareholder loan investments | 9 | 50,199 | 13,482 | | **Net cash flows from investing activities** | | **(773,468)** | **(475,338)** | | **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 increase in cash during the year | | **2,022** | **14,982** | | Cash at the beginning of the year | | **19,783** | **4,801** | | **Cash at the end of the year** | | **21,805** | **19,783** | The accompanying notes on pages 74 to 102 form an integral part of the financial statements. 72 GREENCOAT^{}[] UK WIND ## Statement of Cash Flows – Company For the year ended 31 December 2023 | | Note | For the year ended 31 December 2023 £'000 | For the year ended 31 December 2022 £'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** | The accompanying notes on pages 74 to 102 form an integral part of the financial statements. 73 Greencoat UK Wind PLC Annual Report for the year ended 31 December 2023 # Notes to the Consolidated Financial Statements For the year ended 31 December 2023 ## 1. Material accounting policies ### Basis of accounting The consolidated annual 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. The annual financial statements have been prepared on the historical cost basis, as modified for the measurement of certain financial instruments at fair value through profit or loss. The principal accounting policies are set out below. These consolidated financial statements are presented in pounds sterling, which is the currency of the primary economic environment in which the Group operates and are rounded to the nearest thousand, unless otherwise stated. ### Going concern The Group's business activities, together with the factors likely to affect its future development, performance and position, are set out in the Investment Manager's Report. The Group faces a number of risks and uncertainties, as set out in the Strategic Report on pages 20 to 22. The financial risk management objectives and policies of the Group, including exposure to price risk, interest rate risk, credit risk and liquidity risk are discussed in note 18 to the financial statements. As at 31 December 2023, the Group had net current liabilities of £454.6 million (2022: £136.1 million), cash balances of £21.8 million (2022: £19.8 million) (excluding cash balances within investee companies of £159.3 million) and security cash deposits of £40.1 million (2022: £nil). The significant net current liabilities position of the Group at 31 December 2023 is due to both the Company's revolving credit facility and two of the Company's term debt tranches with NAB and CBA maturing within 12 months of the year end and therefore being classified as current liabilities. The Company expects to refinance the maturing term debt during 2024. The Company had £1,390 million (2022: £1,100 million) of term debt as at 31 December 2023, with an additional £400 million drawn on its £600 million revolving credit facility. The covenants on the Company's banking facilities are limited to gearing and interest cover and the Company is expected to continue to comply with these covenants going forward. The Group continues to meet day-to-day liquidity needs through its cash resources. The major cash outflows of the Group are the payment of dividends, costs relating to the acquisition of new assets and purchases of its own shares, all of which are discretionary. The Group has sufficient access to debt, including its revolving credit facility, in order to fund any future wind farm investment within the parameters of its Investment Policy. As the Company's shares traded at an average discount to NAV of 10.5 per cent during the year, a continuation vote is to be proposed at the Company's AGM in April 2024 in line with its Articles of Association. The Board believe that the Company's share price performance during the year is reflective of its macroeconomic environment, and not of the financial prospects of the Company. The Board believe that the outcome of the shareholder continuation vote will not impair the Company's ability to operate as a going concern. The Board has reviewed Group forecasts and projections which cover a period of at least 12 months from the date of approval of this report. On the basis of this review, taking into account foreseeable changes in investment and trading performance, and after making due enquiries, 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. 74 ## Notes to the Consolidated Financial Statements continued For the year ended 31 December 2023 1. Material accounting policies continued G R E E N C O A T 75 U K W I N D Accounting for subsidiaries The Directors have concluded that the Group has all the elements of control as prescribed by IFRS 10 “Consolidated Financial Statements” in relation to all its subsidiaries and that the Company continues to satisfy the 3 essential criteria to be regarded as an investment entity as defined in IFRS 10, IFRS 12 “Disclosure of Interests in Other Entities” and IAS 27 “Consolidated and Separate Financial Statements”. The 3 essential criteria are such that the entity must: 1. Obtain funds from one or more investors for the purpose of providing these investors with professional investment management services; 2. Commit to its investors that its business purpose is to invest its funds solely for returns from capital appreciation, investment income or both; and 3. Measure and evaluate the performance of substantially all of its investments on a fair value basis. In satisfying the second essential criteria, the notion of an investment time frame is critical. An investment entity should not hold its investments indefinitely but should have an exit strategy for their realisation. Although the Company has invested in equity interests in wind farms that have an indefinite life, the underlying wind farm assets that it invests in have an expected life of 30 years. The Company intends to hold these wind farms for the remainder of their useful life to preserve the capital value of the portfolio. However, as the wind farms are expected to have no residual value after their 30 year life, the Directors consider that this demonstrates a clear exit strategy from these investments. Subsidiaries are therefore measured at fair value through profit or loss, in accordance with IFRS 13 “Fair Value Measurement” and IFRS 9 “Financial Instruments”. The financial support provided by the Company to its unconsolidated subsidiaries is disclosed in note 10. Notwithstanding this, IFRS 10 requires subsidiaries that provide services that relate to the investment entity’s investment activities to be consolidated. Accordingly, the annual financial statements include the consolidated financial statements of Greencoat UK Wind PLC and Greencoat UK Wind Holdco Limited (a 100 per cent owned UK subsidiary). In respect of these entities, intra-Group balances and any unrealised gains arising from intra- Group transactions are eliminated in preparing the consolidated financial statements. Unrealised losses are eliminated unless the costs cannot be recovered. The financial statements of subsidiaries that are included in the consolidated financial statements are included from the date that control commences until the dates that control ceases. In the Parent Company’s financial statements, investments in subsidiaries are measured at fair value through profit or loss in accordance with IFRS 9, as permitted by IAS 27. Accounting for associates and joint ventures The Group has taken the exemption permitted by IAS 28 “Investments in Associates and Joint Ventures” and IFRS 11 “Joint Arrangements” for entities similar to investment entities and measures its investments in associates and joint ventures at fair value. The Directors consider an associate to be an entity over which the Group has significant influence, through an ownership of between 20 per cent and 50 per cent. The Group’s associates and joint ventures are disclosed in note 10. New and amended standards and interpretations applied The following new standards or interpretations are effective for the first time for periods beginning on or after 1 January 2023 and had an effect on the Group’s or Company’s financial statements: • Disclosure of Accounting Policies (Amendments to IAS 1 Presentation of Financial Statements and IFRS Practice Statement 2 Making Materiality Judgements); • Definition of Accounting Estimates (Amendments to IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors); and • Deferred Tax related to Assets and Liabilities arising from a Single Transaction (Amendments to IAS 12 Income Taxes). Greencoat UK Wind PLC Annual Report for the year ended 31 December 2023 ## Notes to the Consolidated Financial Statements continued For the year ended 31 December 2023 1. Material accounting policies continued 76 New and amended standards and interpretations not applied At the date of authorisation of these financial statements, the following amendments had been published and will be effective in future accounting periods. Effective for accounting periods beginning on or after 1 January 2024: • Classification of Liabilities as Current or Non-Current (Amendments to IAS 1 Presentation of Financial Statements); • Non-current Liabilities with Covenants (Amendments to IAS 1 Presentation of Financial Statements); and • Supplier Finance Arrangements (Amendments to IAS 7 Statement of Cash Flows and IFRS 7 Financial Instruments: Disclosures) Effective for accounting periods beginning on or after 1 January 2025: • Lack of Exchangeability (Amendments to IAS 21 The Effects of Changes in Foreign Exchange Rates) The impact of these standards is not expected to be material to the reported results and financial position of the Group. Financial instruments Financial assets and financial liabilities are recognised in the Group’s Consolidated Statement of Financial Position when the Group becomes a party to the contractual provisions of the instrument. At 31 December 2023 and 2022, the carrying amounts of cash at bank, security cash deposits, receivables, payables, accrued expenses and short term borrowings reflected in the financial statements are reasonable estimates of fair value in view of the nature of these instruments or the relatively short period of time between the original instruments and their expected realisation. The fair value of advances and other balances with related parties which are short term or repayable on demand is equivalent to their carrying amount. Financial assets The classification of financial assets at initial recognition depends on the purpose for which the financial asset was acquired and its characteristics. All financial assets are initially recognised at fair value. All purchases of financial assets are recorded at the date on which the Group became party to the contractual requirements of the financial asset. The Group’s and Company’s financial assets principally comprise of investments held at fair value through profit or loss and receivables. Receivables at amortised cost Impairment provisions for receivables are recognised based on a forward-looking expected credit loss model. All financial assets assessed under this model are immaterial to the financial statements. Investments at fair value through profit or loss Investments are designated upon initial recognition as held at fair value through profit or loss. Gains or losses resulting from the movement in fair value of the Group’s loan and equity investments are recognised in the Consolidated Statement of Comprehensive Income at each valuation point. As shareholder loan investments form part of a managed portfolio of assets whose performance is evaluated on a fair value basis, loan investments are designated at fair value in line with equity investments. The Company’s loan and equity investments in Holdco are held at fair value through profit or loss. Gains or losses resulting from the movement in fair value are recognised in the Company’s Statement of Comprehensive Income at each valuation point. Fair value is defined as the amount for which an asset could be exchanged between knowledgeable willing parties in an arm’s length transaction. Fair value is calculated on a discounted cash flow basis in accordance with IFRS 13 and IFRS 9. ## Notes to the Consolidated Financial Statements continued For the year ended 31 December 2023 1. Material accounting policies continued G R E E N C O A T 77 U K W I N D Financial instruments continued Financial assets continued Recognition and derecognition of financial assets Financial assets are recognised/derecognised at the date of the purchase/disposal. Investments are initially recognised at cost, being the fair value of consideration given. Transaction costs are recognised in the Consolidated Statement of Comprehensive Income as incurred. A financial asset (in whole or in part) is derecognised either: • when the Group has transferred substantially all the risks and rewards of ownership; or • when it has neither transferred or retained substantially all the risks and rewards and when it no longer has control over the assets or a portion of the asset; or • when the contractual right to receive cash flow has expired. Financial liabilities Financial liabilities are classified according to the substance of the contractual agreements entered into and are recorded on the date on which the Group becomes party to the contractual requirements of the financial liability. All loans and borrowings are initially recognised at cost, being fair value of the consideration received, less issue costs where applicable. After initial recognition, all interest bearing loans and borrowings are subsequently measured at amortised cost using the effective interest rate method. Loan balances as at the year end have not been discounted to reflect amortised cost, as the amounts are not materially different from the outstanding balances. Finance expenses Borrowing costs are recognised in the Consolidated Statement of Comprehensive Income in the period to which they relate on an accruals basis. Share capital Financial instruments issued by the Company are treated as equity if the holder has only a residual interest in the assets of the Company after the deduction of all liabilities. The Company’s ordinary shares are classified as equity instruments. Incremental costs directly attributable to the issue of new shares are shown in share premium as a deduction from proceeds. Incremental costs include those incurred in connection with the placing and admission which include fees payable under a placing agreement, legal costs and any other applicable expenses. Repurchase of ordinary share capital The cost of repurchasing ordinary shares including the related stamp duty and transaction costs are recognised in the Consolidated Statement of Changes in Equity and included within retained earnings. Share repurchase transactions are accounted for on a trade date basis. The nominal value of ordinary share capital repurchased and cancelled is transferred out of share capital and into the capital redemption reserve. Cash at bank Cash at bank comprises cash balances held at bank. Security cash deposits Security cash deposits comprise amounts held on call with banks and other short term highly liquid deposits, that are readily convertible to a known amount of cash and are subject to an insignificant risk of changes in value. These balances have been included within receivables. Greencoat UK Wind PLC Annual Report for the year ended 31 December 2023 ## Notes to the Consolidated Financial Statements continued For the year ended 31 December 2023 1. Material accounting policies continued Income recognition Gains or losses resulting from the movement in fair value of the Group’s and Company’s investments held at fair value through profit or loss are recognised in the Consolidated or Company Statement of Comprehensive Income at each valuation point. 2. Critical accounting judgements, estimates and assumptions The preparation of the financial statements requires the application of estimates and assumptions which may affect the results reported in the financial statements. Estimates, by their nature, are based on judgement and available information. As disclosed in note 1, the Directors have concluded that the Company meets the definition of an investment entity as defined in IFRS 10, IFRS 12 and IAS 27. This conclusion involved a degree of judgement and assessment as to whether the Company met the criteria outlined in the accounting standards. Significant accounting estimates and assumptions The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying value of assets and liabilities are those used to determine the fair value of the investments as disclosed in note 9 to the financial statements. The key assumptions that have a significant impact on the carrying value of investments that are valued by reference to the discounted value of future cash flows are 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. The sensitivity analysis of these key assumptions is outlined in note 9 to the financial statements, on page 84. 78 Dividends Dividends payable are recognised as distributions in the financial statements when the Company’s obligation to make payment has been established. Dividend income and interest income on shareholder loan investments are recognised when the Group’s entitlement to receive payment is established. Expenses Expenses are accounted for on an accruals basis. Share issue expenses of the Company directly attributable to the issue and listing of shares are charged to the share premium account. The Company issues shares to the Investment Manager in exchange for receiving investment management services. The fair value of the investment management services received in exchange for shares is recognised as an expense at the time at which the investment management fees are earned, with a corresponding increase in equity. The fair value of the investment management services is calculated by reference to the definition of investment management fees in the Investment Management Agreement. Taxation Under the current system of taxation in the UK, the Group is liable to taxation on its operations in the UK. Current tax is the expected tax payable on the taxable income for the period, using tax rates that have been enacted or substantively enacted at the date of the Consolidated Statement of Financial Position. The Group does not expect to recognise any deferred tax assets or liabilities as it would expect to avail from substantial shareholder relief on any temporary or permanent difference arising from any potential future sale of an investment. GREENCOAT UK WIND # Notes to the Consolidated Financial Statements continued For the year ended 31 December 2023 ## 2. Critical accounting judgements, estimates and assumptions continued ### Significant judgement Useful lives are based on the Investment Manager's estimates of the period over which the assets will generate revenue which are periodically reviewed for continued appropriateness. The assumption used for the useful life of the wind farms is 30 years. The actual useful life may be a shorter or longer period depending on the actual operating conditions experienced by the asset. The discount rates are subjective and therefore it is feasible that a reasonable alternative assumption may be used resulting in a different value. The discount rates applied to the cash flows are reviewed periodically by the Investment Manager to ensure they are at the appropriate level. The Investment Manager will take into consideration market transactions, where of similar nature, when considering changes to the discount rates used. The revenues and expenditure of the investee companies are frequently partly or wholly subject to indexation and an assumption is made that inflation will increase at a long term rate. The price at which the output from the generating assets is sold is a factor of both wholesale electricity prices and the revenue received from the Government support regimes. Future power prices are estimated using external third party forecasts, and may be adjusted by the Investment Manager where more conservative assumptions are considered appropriate. These third party forecasts take the form of specialist consultancy reports, reflecting various factors including gas prices, carbon prices and renewables deployment, each of which reflect the UK and global response to climate change. The future power price assumptions are reviewed as and when these forecasts are updated. There is an inherent uncertainty in future wholesale electricity price projection. Specifically commissioned external reports are used to estimate the expected electrical output from the wind farm assets taking into account the expected average wind speed at each location and generation data from historical operation. The actual electrical output may differ considerably from that estimated in such a report mainly due to the variability of actual wind to that modelled in any one period. Assumptions around electrical output will be reviewed only if there is good reason to suggest there has been a material change in this expectation. As disclosed in note 10, the fair value of guarantees and counter-indemnities provided by the Group on behalf of its investments are considered to be £nil, as the Directors do not expect Group cash flows to crystallise as a result of these guarantees or counter-indemnities. ## 3. Investment management fees Under the terms of the Investment Management Agreement, the Investment Manager is entitled to a combination of a Cash Fee and an Equity Element from the Company. The Cash Fee is based upon the NAV as at the start of the quarter in question on the following basis: - on that part of the then most recently announced NAV up to and including £500 million, an amount equal to 0.25 per cent of such part of the NAV; - on that part of the then most recently announced NAV over £500 million and up to and including £1,000 million, an amount equal to 0.225 per cent of such part of the NAV; - on that part of the then most recently announced NAV over £1,000 million and up to and including £3,000 million, an amount equal to 0.2 per cent of such part of the NAV; and - on that part of the then most recently announced NAV over £3,000 million, an amount equal to 0.175 per cent of such part of the NAV. The Equity Element is calculated quarterly in advance and has a value as set out below: - on that part of the then most recently announced NAV up to and including £500 million, 0.05 per cent; and - on that part of the then most recently announced NAV over £500 million up to and including £1,000 million, 0.025 per cent. 79 Greencoat UK Wind PLC Annual Report for the year ended 31 December 2023 ## Notes to the Consolidated Financial Statements continued For the year ended 31 December 2023 ### 3. Investment management fees continued The ordinary shares issued to the Investment Manager under the Equity Element are subject to a 3 year lock-up starting from the quarter in which they are due to be paid. As at 31 December each year, the Cash Fee and Equity Element shall be subject to a true-up to the value that would have been deliverable had they been calculated quarterly in arrears. Investment management fees paid or accrued in the year were as follows: | | For the year ended 31 December 2023 £'000 | For the year ended 31 December 2022 £'000 | | --- | --- | --- | | Cash Fee | 31,344 | 29,848 | | Equity Element | 1,500 | 1,500 | | | **32,844** | **31,348** | The value of the Equity Element and the Cash Fee detailed in the table above include the true-up amount for the year calculated in accordance with the Investment Management Agreement. The Cash Fee and Equity Element relating to the quarter ended 31 December 2023 were accrued at year end. This is further detailed in note 19. ### 4. Investment income | | For the year ended 31 December 2023 £'000 | For the year ended 31 December 2022 £'000 | | --- | --- | --- | | Dividends received (note 19) | 359,939 | 525,897 | | Interest on shareholder loan investment received (note 19) | 62,785 | 51,259 | | | **422,724** | **577,156** | ### 5. Operating expenses | | For the year ended 31 December 2023 £'000 | For the year ended 31 December 2022 £'000 | | --- | --- | --- | | Management fees (note 3) | 32,844 | 31,348 | | Group and SPV administration fees | 1,231 | 1,000 | | Non-executive Directors' fees | 385 | 338 | | Other expenses | 2,895 | 2,469 | | Fees to the Company's Auditor: | | | | for audit of the statutory financial statements | 248 | 187 | | for other audit related services | 5 | 4 | | | **37,608** | **35,346** | Total fees payable to the Company's Auditor, BDO LLP, for non-audit services during the year ended 31 December 2023 were £4,800 (2022: £4,290), payable in relation to a limited review of the half year report. 80 GREENCOAT^{}[] UK WIND ## Notes to the Consolidated Financial Statements continued For the year ended 31 December 2023 ### 6. Taxation | | For the year ended 31 December 2023 £'000 | For the year ended 31 December 2022 £'000 | | --- | --- | --- | | UK Corporation Tax charge | 392 | — | | | **392** | **—** | The corporation tax rate increased from 19 per cent to 25 per cent (for companies with profits over £250,000), from 1 April 2023. The tax charge for the year shown in the Statement of Comprehensive Income is lower than the standard rate of corporation tax of 23.52 per cent (2022: 19 per cent). The differences are explained below. | | For the year ended 31 December 2023 £'000 | For the year ended 31 December 2022 £'000 | | --- | --- | --- | | Profit for the year before taxation | 126,580 | 953,863 | | Profit for the year multiplied by the standard rate of corporation tax of 23.52 per cent (2022: 19 per cent) | 29,772 | 181,234 | | Fair value movements (not subject to taxation) | 47,667 | (83,484) | | Dividends received (not subject to taxation) | (84,660) | (99,920) | | Expenditure not deductible for tax purposes | 658 | 603 | | Surrendering of tax losses to other group companies for nil consideration | 5,042 | 819 | | Other net tax adjustments | 1,521 | 748 | | Adjustment from previous period | 392 | — | | **Total tax charge** | **392** | **—** | ### 7. Earnings per share | | For the year ended 31 December 2023 | For the year ended 31 December 2022 | | --- | --- | --- | | Profit attributable to equity holders of the Company – £'000 | 126,188 | 953,863 | | Weighted average number of ordinary shares in issue | 2,317,758,378 | 2,317,629,517 | | **Basic and diluted earnings from continuing operations in the year (pence)** | **5.44** | **41.16** | Dilution of the earnings per share as a result of the Equity Element of the investment management fee as disclosed in note 3 does not have a significant impact on the basic earnings per share. 81 Greencoat UK Wind PLC Annual Report for the year ended 31 December 2023 ## Notes to the Consolidated Financial Statements continued For the year ended 31 December 2023 ### 8. Dividends declared with respect to the year | Interim dividends paid during the year ended 31 December 2023 | Dividend per share pence | Total dividend £'000 | | --- | --- | --- | | With respect to the quarter ended 31 December 2022 | 1.93 | 44,742 | | With respect to the quarter ended 31 March 2023 | 2.19 | 50,775 | | With respect to the quarter ended 30 June 2023 | 2.19 | 50,780 | | With respect to the quarter ended 30 September 2023 | 2.19 | 50,746 | | | **8.50** | **197,043** | | Interim dividends declared after 31 December 2023 and not accrued in the year | Dividend per share pence | Total dividend £'000 | | --- | --- | --- | | With respect to the quarter ended 31 December 2023 | 3.43 | 79,114 | | | **3.43** | **79,114** | On 29 January 2024, the Company announced a dividend of 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 £231.4 million, equivalent to 10 pence per share. The record date for the dividend is 16 February 2024 and the payment date is 29 February 2024. The following table shows dividends paid in the prior year. | Interim dividends paid during the year ended 31 December 2022 | Dividend per share pence | Total dividend £'000 | | --- | --- | --- | | With respect to the quarter ended 31 December 2021 | 1.795 | 41,597 | | With respect to the quarter ended 31 March 2022 | 1.930 | 44,730 | | With respect to the quarter ended 30 June 2022 | 1.930 | 44,734 | | With respect to the quarter ended 30 September 2022 | 1.930 | 44,739 | | | **7.585** | **175,800** | ### 9. Investments at fair value through profit or loss | Group | 31 December 2023 £'000 | 31 December 2022 £'000 | | --- | --- | --- | | Opening balance | 4,959,312 | 4,042,545 | | Additions | 820,925 | 484,153 | | Repayment of shareholder loan investments (note 19) | (50,199) | (13,482) | | Unrealised movement in fair value of investments | (191,402) | 446,096 | | | **5,538,636** | **4,959,312** | The investments made in underlying assets are carried at fair value through profit and loss. The investments are typically made through a combination of shareholder loans and equity into the SPVs which own the underlying asset. The nominal value of the shareholder loan investments as at 31 December 2023 was £1,484,003,180 (2022: £1,087,080,412). 82 GREENCOAT UK WIND # Notes to the Consolidated Financial Statements continued For the year ended 31 December 2023 ## 9. Investments at fair value through profit or loss continued The movement in investments of the Company during the year and the prior year was made up as follows: | Company | 31 December 2023 £'000 | 31 December 2022 £'000 | | --- | --- | --- | | Opening balance | 4,978,816 | 4,046,365 | | Loan advanced to Holdco (note 19) | 680,800 | 260,811 | | Repayment of loan to Holdco (note 19) | (328,412) | (347,862) | | Unrealised movement in fair value of investments | 227,153 | 1,019,502 | | | **5,558,357** | **4,978,816** | The Company's shareholder loan investment in Holdco is repayable on demand. ### Fair value measurements IFRS 13 requires disclosure of fair value measurement by level. The level of fair value hierarchy within the financial assets or financial liabilities is determined on the basis of the lowest level input that is significant to the fair value measurement. Financial assets and financial liabilities are classified in their entirety into only one of the following 3 levels: - Level 1 – quoted prices (unadjusted) in active markets for identical assets or liabilities; - Level 2 – inputs other than quoted prices included within Level 1 that are observable for the assets or liabilities, either directly (i.e. as prices) or indirectly (i.e. derived from prices); and - Level 3 – inputs for assets or liabilities that are not based on observable market data (unobservable inputs). The determination of what constitutes 'observable' requires significant judgement by the Group. The Group considers observable data to be market data that is readily available, regularly distributed or updated, reliable and verifiable, not proprietary, and provided by independent sources that are actively involved in the relevant market. The only financial instruments held at fair value are the instruments held by the Group in the SPVs, which are fair valued at each reporting date. The Group's investments have been classified within Level 3 as the investments are not traded and contain unobservable inputs. The Company's investments are all considered to be Level 3 assets. As the fair value of the Company's equity and loan investments in Holdco is ultimately determined by the underlying fair values of the SPV investments, the Company's sensitivity analysis of reasonably possible alternative input assumptions is the same as for the Group. Due to the nature of the investments, they are always expected to be classified as Level 3. There have been no transfers between levels during the year ended 31 December 2023. Any transfers between the levels would be accounted for on the last day of each financial period. Valuations are derived using a discounted cash flow methodology in line with IPEV Valuation Guidelines and take into account, inter alia, the following: - due diligence findings where relevant; - the terms of any material contracts including PPAs; - asset performance; - power price forecast from a leading market consultant; and - the economic, taxation or regulatory environment. 83 Greencoat UK Wind PLC Annual Report for the year ended 31 December 2023 ## Notes to the Consolidated Financial Statements *continued* For the year ended 31 December 2023 ### 9. Investments at fair value through profit or loss *continued* #### Sensitivity analysis The fair value of the Group's investments is £5,538,635,628 (2022: £4,959,311,361). The analysis below is provided to illustrate the sensitivity of the fair value of investments to an individual input, while all other variables remain constant. The Board considers these changes in inputs to be within reasonable expected ranges. This is not intended to imply the likelihood of change or that possible changes in value would be restricted to this range. #### 31 December 2023 | Input | Base case | Change in input | Change in fair value of investments £'000 | Change in NAV per share pence | | --- | --- | --- | --- | --- | | Discount rate | 11 per cent levered portfolio IRR | + 0.5 per cent - 0.5 per cent | (170,310) 179,963 | (7.4) 7.8 | | Long term inflation rate | RPI: 3.5 per cent to 2030, 2.5 per cent thereafter CPI: 2.5 per cent | - 0.5 per cent + 0.5 per cent | (162,604) 170,870 | (7.0) 7.4 | | Energy yield | P50 | 10 year P90 10 year P10 | (352,901) 352,854 | (15.3) 15.3 | | Power price | Forecast by leading consultant | - 10 per cent + 10 per cent | (335,334) 316,943 | (14.5) 13.7 | | Asset life | 30 years | - 5 years + 5 years | (313,935) 204,932 | (13.6) 8.9 | #### 31 December 2022 | Input | Base case | Change in input | Change in fair value of investments £'000 | Change in NAV per share pence | | --- | --- | --- | --- | --- | | Discount rate | 10 per cent levered portfolio IRR | + 0.5 per cent - 0.5 per cent | (155,166) 163,665 | (6.7) 7.1 | | Long term inflation rate | RPI: 3.5 per cent to 2030, 2.5 per cent thereafter CPI: 2.5 per cent | - 0.5 per cent + 0.5 per cent | (144,045) 151,076 | (6.2) 6.5 | | Energy yield | P50 | 10 year P90 10 year P10 | (323,717) 323,657 | (14.0) 14.0 | | Power price | Forecast by leading consultant | - 10 per cent + 10 per cent | (249,393) 236,130 | (10.8) 10.2 | | Asset life | 30 years | - 5 years + 5 years | (229,237) 148,321 | (9.9) 6.4 | The portfolio is valued on an unlevered basis using a lower discount rate for fixed cash flows and a higher discount rate for merchant cash flows. This results in a blended unlevered portfolio IRR. The equivalent levered portfolio IRR is calculated assuming 35 per cent gearing and an all-in interest cost of 5 per cent. The sensitivities above are assumed to be independent of each other. Combined sensitivities are not presented. The sensitivity analysis shown above would be the same for the Company as for the Group. Also see the high transition risk scenario discussed on page 33. 84 ## Notes to the Consolidated Financial Statements continued For the year ended 31 December 2023 G R E E N C O A T 85 U K W I N D 10. Unconsolidated subsidiaries, associates and joint ventures The following table shows subsidiaries of the Group. As the Company is regarded as an Investment Entity as referred to in note 1, these subsidiaries have not been consolidated in the preparation of the financial statements: Ownership Ownership Interest as at Interest as at Investment Place of Business 31 December 2023 31 December 2022 Andershaw Scotland (11) 100% 100% Bin Mountain Northern Ireland (10) 100% 100% Bishopthorpe England (11) 100% 100% Braes of Doune Scotland (12) 100% 100% Breeze Bidco (1) Scotland (11) 100% 100% Brockaghboy Northern Ireland (10) 100% 100% Carcant Scotland (12) 100% 100% Church Hill Northern Ireland (10) 100% 100% Corriegarth Scotland (12) 100% 100% Cotton Farm England (11) 100% 100% Crighshane Northern Ireland (10) 100% 100% Dalquhandy Scotland (12) 100% — Douglas West Scotland (12) 100% 100% Earl’s Hall Farm England (11) 100% 100% Glen Kyllachy Scotland (10) 100% 100% Kildrummy Scotland (11) 100% 100% Langhope Rig Scotland (11) 100% 100% Maerdy Wales (11) 100% 100% North Hoyle Wales (11) 100% 100% Screggagh Northern Ireland (10) 100% 100% Slieve Divena Northern Ireland (10) 100% 100% Slieve Divena 2 Northern Ireland (10) 100% 100% South Kyle Scotland (12) 100% — Stroupster Scotland (11) 100% 100% Tappaghan Northern Ireland (10) 100% 100% Twentyshilling Scotland (11) 100% 100% Walney Holdco (2) England (11) 100% 100% Windy Rig Scotland (11) 100% 100% Bicker Fen England (11) 80% 80% Fenlands (3) England (11) 80% 80% Humber Holdco (4) England (11) 77.2% 77.2% Nanclach (1) Scotland (12) 75% 75% Dunmaglass Holdco (5) Scotland (12) 71.2% 71.2% Stronelairg Holdco (6) Scotland (12) 71.2% 71.2% Hoylake (7) England (12) 63% 63% London Array (8) England (12) 54.9% — Drone Hill Scotland (12) 51.6% 51.6% North Rhins Scotland (11) 51.6% 51.6% Sixpenny Wood England (11) 51.6% 51.6% Yelvertoft England (11) 51.6% 51.6% SYND Holdco (9) UK (11) 51.6% 51.6% Greencoat UK Wind PLC Annual Report for the year ended 31 December 2023 ## Notes to the Consolidated Financial Statements continued For the year ended 31 December 2023 ### 10. Unconsolidated subsidiaries, associates and joint ventures continued - (1) The Group's investment in Nanclach is held through Breeze Bidco. - (2) The Group holds 100 per cent of Walney Holdco, which owns 25.1 per cent of Walney Wind Farm, resulting in the Group holding a 25.1 per cent indirect investment in Walney Wind Farm. - (3) The Group's investments in Deeping St. Nicholas, Glass Moor, Red House and Red Tile are held through Fenlands. - (4) The Group holds 77.2 per cent of Humber Holdco, which owns 49 per cent of Humber Wind Farm, resulting in the Group holding a 37.8 per cent indirect investment in Humber Wind Farm. - (5) The Group holds 71.2 per cent of Dunmaglass Holdco, which owns 49.9 per cent of Dunmaglass Wind Farm, resulting in the Group holding a 35.5 per cent indirect investment in Dunmaglass Wind Farm. - (6) The Group holds 71.2 per cent of Stronelairg Holdco, which owns 49.9 per cent of Stronelairg Wind Farm, resulting in the Group holding a 35.5 per cent indirect investment in Stronelairg Wind Farm. - (7) The Group holds 62.7 per cent of Hoylake, which owns 25 per cent of Burbo Bank Extension, resulting in the Group holding a 15.7 per cent indirect investment in Burbo Bank Extension. - (8) The Group holds 54.9 per cent of London Array Holdco, which owns 25 per cent of London Array Limited, resulting in the Group holding a 13.7 per cent indirect investment in London Array Limited. - (9) The Group's investments in Drone Hill, North Rhins, Sixpenny Wood and Yelvertoft are held through SYND Holdco. - (10) The registered office address is The Legacy Building, Northern Ireland Science Park, Belfast, BT3 9DT. - (11) The registered office address is 5th Floor, 20 Fenchurch Street, London, EC3M 3BY. - (12) The registered office address is Collins House, Rutland Square, Edinburgh, EH1 2AA. There are no significant restrictions on the ability of the Group's unconsolidated subsidiaries to transfer funds in the form of cash dividends. The following table shows associates and joint ventures of the Group which have been recognised at fair value as permitted by IAS 28 "Investments in Associates and Joint Ventures": | Investment | Place of Business | Ownership Interest as at 31 December 2023 | Ownership Interest as at 31 December 2022 | | --- | --- | --- | --- | | Kype Muir Extension | Scotland^{(3)} | 49.9% | — | | ML Wind^{(1)} | England^{(4)} | 49% | 49% | | Little Cheyne Court | England^{(4)} | 41% | 41% | | Clyde | Scotland^{(5)} | 28.2% | 28.2% | | Hornsea 1 Holdco^{(2)} | England^{(6)} | 25% | 25% | | Rhyl Flats | Wales^{(4)} | 24.95% | 24.95% | (1) The Group's investments in Middlemoor and Lindhurst are 49 per cent (2022: 49 per cent). These are held through ML Wind. (2) The Group holds 25 per cent of Hornsea 1 Holdco, which owns 50 per cent of Hornsea 1 Limited, resulting in the Group holding a 12.5 per cent indirect investment in Hornsea 1 Limited. (3) The registered office address is Inkerman House St John's Road, Meadowfield, Durham, DH7 8XL. (4) The registered office address is Windmill Hill Business Park, Whitehill Way, Swindon, Wiltshire, SN5 6PB. (5) The registered office address is Inveralmond House, 200 Dunkeld Road, Perth, PH1 3AQ. (6) The registered office address is 1 Bartholomew Lane, London, England, EC2N 2AX. Loans advanced by Holdco to the investments are disclosed in note 19. 86 ## Notes to the Consolidated Financial Statements continued For the year ended 31 December 2023 G R E E N C O A T 87 U K W I N D 10. Unconsolidated subsidiaries, associates and joint ventures continued Guarantees and counter-indemnities provided by the Group on behalf of its investments are as follows: Amount Provider of security Investment Beneficiary Nature Purpose £’000 The Company Hornsea 1 National Letter of Debt service reserve 65,300 Westminster Bank credit The Company London Array Orsted Guarantee PPA 60,000 Holdco Clyde SSE Counter- Grid, radar, 21,771 indemnity decommissioning The Company London Array Shareholders Guarantee JOA participants 20,000 guarantee The Company North Hoyle The Crown Estate Guarantee Decommissioning, rent 14,744 The Company Glen Kyllachy RWE Counter- Decommissioning, grid 12,238 indemnity The Company Burbo Bank Extension Orsted Counter- Rent, radar 11,000 indemnity The Company Twentyshilling Whiteside Hill Guarantee Land access, cabling 10,000 Wind Farm The Company Hornsea 1 Orsted Letter of Lease obligations 8,410 Credit The Company London Array Orsted Counter- OFTO, O&M 8,300 indemnity The Company Dalquhandy BT Guarantee PPA 5,897 The Company South Kyle Land owner Guarantee Decommissioning 5,332 The Company South Kyle East Ayrshire Counter- Decommissioning 5,000 Council indemnity The Company Humber Gateway RWE Guarantee Radar 4,900 The Company South Kyle Scottish Counter- Decommissioning 4,327 Ministers indemnity The Company South Kyle Dumfries and Counter- Decommissioning 3,748 Galloway Council indemnity The Company Andershaw Statkraft Guarantee Decommissioning 3,500 Holdco Kype Muir Extension Nordex Guarantee Turbine supply 3,185 Holdco Dalquhandy BayWa Counter- Decommissioning 2,525 indemnity The Company Braes of Doune Land owner Guarantee Decommissioning 2,000 The Company Rhyl Flats The Crown Estate Guarantee Decommissioning 1,829 The Company Twentyshilling Santander Counter- Decommissioning 1,807 indemnity The Company Twentyshilling Ministry of Guarantee Seismic array 1,800 Defence equipment The Company Windy Rig Santander Counter- Access rights, 1,409 indemnity decommissioning, grid The Company Tom nan Clach RBS Unsecured Decommissioning 1,348 guarantee The Company Twentyshilling NATS Guarantee Radar 1,244 The Company Douglas West Land owner Guarantee Decommissioning 1,200 The Company Windy Rig NATS Guarantee Radar 601 The Company Stroupster RBS Unsecured Decommissioning 366 guarantee Holdco Stronelairg SSE Guarantee Grid 301 The Company South Kyle NATS Guarantee Radar 285 Holdco Dunmaglass SSE Guarantee Grid 201 The Company Cotton Farm Land owner Guarantee Decommissioning 165 The Company Sixpenny Wood Land owner Guarantee Community fund 150 The Company Twentyshilling Santander Counter- Decommissioning 96 indemnity The Company Yelvertoft Daventry District Guarantee Decommissioning 82 Council The Company Langhope Rig Barclays Counter- Decommissioning 81 indemnity The Company Maerdy Natural Resource Guarantee Access rights to n/a Wales neighbouring land 285,142 The fair value of these guarantees and counter-indemnities provided by the Group are considered to be £nil (2022: £nil) as disclosed in note 2. Greencoat UK Wind PLC Annual Report for the year ended 31 December 2023 ## Notes to the Consolidated Financial Statements continued For the year ended 31 December 2023 88 11. Receivables 31 December 2023 31 December 2022 Group £’000 £’000 Security cash deposits 40,119 — VAT receivable 676 527 Interest income receivable 111 — Prepayments 151 122 Other receivables 72 190 Amounts due from SPVs (note 19) — 1,648 41,129 2,487 31 December 2023 31 December 2022 Company £’000 £’000 Security cash deposits 40,119 — Prepayments 151 122 Interest income receivable 111 — Other receivables — 3 40,381 125 12. Payables 31 December 2023 31 December 2022 Group £’000 £’000 Investment management fee payable 8,090 1,364 Loan interest payable (note 13) 5,487 5,490 Commitment fee payable (note 13) 235 402 Letter of credit fees payable (note 13) 93 324 Amounts due to SPVs (note 19) 2,508 — Acquisition costs payable 55 — Other payables 1,105 774 17,573 8,354 31 December 2023 31 December 2022 Company £’000 £’000 Investment management fee payable 8,090 1,364 Loan interest payable (note 13) 5,487 5,490 Commitment fee payable (note 13) 235 402 Letter of credit fees payable (note 13) 93 324 Other payables 888 579 14,793 8,159 GREENCOAT^{}[] UK WIND ## Notes to the Consolidated Financial Statements continued For the year ended 31 December 2023 ### 13. Loans and borrowings | Group and Company | 31 December 2023 £'000 | 31 December 2022 £'000 | | --- | --- | --- | | Opening balance | 1,100,000 | 950,000 | | Revolving credit facility | | | | Drawdowns | 400,000 | 260,000 | | Repayments | (200,000) | (310,000) | | Term debt facilities | | | | Drawdowns | 640,000 | 200,000 | | Repayments | (150,000) | — | | **Closing balance** | **1,790,000** | **1,100,000** | | Reconciled as: | | | | Current liabilities | 500,000 | 150,000 | | Non current liabilities | 1,290,000 | 950,000 | | Group and Company | For the year ended 31 December 2023 £'000 | For the year ended 31 December 2022 £'000 | | --- | --- | --- | | Loan interest | 58,787 | 27,489 | | Facility arrangement fees | 4,350 | 500 | | Commitment fees | 2,289 | 3,114 | | Letter of credit fees | 1,137 | 324 | | Professional fees | 589 | 1,163 | | Other facility fees | 244 | 185 | | **Finance expense** | **67,396** | **32,775** | The loan balance as at 31 December 2023 has not been adjusted to reflect amortised cost, as the amounts are not materially different from the outstanding balances. The terms of the revolving credit facility remain unchanged and comprise a margin of 1.75 per cent per annum and a commitment fee of 0.65 per cent per annum of any undrawn facility. As at 31 December 2023, the Company has a total revolving credit facility of £600 million (2022: £600 million), of which amounts drawn were £400 million (2022: £200 million), accrued interest payable was £228,404 (2022: £52,675) and the outstanding commitment fee payable was £235,068 (2022: £401,753). The facility has a maturity date of 29 October 2024 and is classified as a current liability. In the prior year, the Company placed a letter of credit facility provided by Lloyds. The fee for this facility is 1.25 per cent and the fee payable, as at 31 December 2023, was £93,400 (2022: £324,221). On 31 August 2023, the Company placed a letter of credit facility provided by ANZ. The fee for this facility is 0.24 per cent per annum. 89 Greencoat UK Wind PLC Annual Report for the year ended 31 December 2023 ## Notes to the Consolidated Financial Statements continued For the year ended 31 December 2023 90 13. Loans and borrowings continued The Company’s term debt facilities and associated interest rate swaps have various maturity dates, as set out in the below table. Accrued interest at Loan margin Swap rate/SONIA All-in rate Loan principal 31 December 2023 Provider Maturity date % %%£’000 £’000 NAB 4 Nov 2024 1.15 1.06 2.21 50,000 179 CBA 14 Nov 2024 1.35 0.81 2.16 50,000 166 CBA 6 Mar 2025 1.55 1.53 3.08 50,000 236 CIBC 3 Nov 2025 1.50 1.51 3.01 100,000 454 ANZ 3 May 2026 1.45 5.92 7.37 75,000 45 NAB 1 Nov 2026 1.50 1.60 3.10 75,000 376 NAB 1 Nov 2026 1.50 0.84 2.34 25,000 95 CIBC 14 Nov 2026 1.40 0.81 2.21 100,000 334 Lloyds 9 May 2027 1.60 5.65 7.25 150,000 89 CBA 4 Nov 2027 1.60 1.37 2.97 100,000 455 ABN AMRO 2 May 2028 1.75 5.04 6.79 100,000 57 ANZ 3 May 2028 1.75 5.38 7.13 75,000 44 Barclays 3 May 2028 1.75 4.99 6.74 100,000 57 AXA 31 Jan 2030 — — 3.03 125,000 1,598 AXA 31 Jan 2030 1.70 1.45 3.15 75,000 995 AXA 28 Apr 2031 — — 6.43 25,000 13 AXA 28 Apr 2031 1.80 5.20 (1) 7.00 115,000 66 1,390,000 5,259 (1) Facility pays SONIA as variable rate. Loans with maturity dates of less than 12 months amount to £100 million and are classified as current liabilities. The remaining term debt of £1,290 million is classified as non current liabilities. £1,125 million of these term loans contain swaps. £1,050 million of these instruments have been treated as a single fixed rate loan agreement, which effectively set interest rates payable at fixed rates as: • the contractual agreements for the loan and swap are directly linked, were executed at the same time and are not independently transferable; • there is a common counterparty for loan and swap instruments; and • all loan and swap instruments are co terminus and their commercial and financial terms reflect each other. The £75 million term loan with AXA is hedged with an interest rate swap with NAB, which demonstrates consistent characteristics with the other term loans and swaps other than the common counterparty. Similarly, the £150 million term loan with Lloyds is hedged with an interest rate swap with a different Lloyds counterparty. In such cases, the interest rate swaps have not been recognised as separate instruments at fair value and the Board is of the view that their fair values are not sufficiently material to be separately recognised. The £115 million term loan tranche with AXA has not been hedged with an interest rate swap and so the loan will be fully variable until maturity of the loan. £150 million term loan tranches with AXA have fixed all-in rates and have not been hedged by interest rate swaps. All borrowing ranks pari passu and is secured by a debenture over the assets of the Company, including its shares in Holdco, and a floating charge over Holdco’s bank accounts. 14. Contingencies and commitments The Group had no contingencies and commitments for the year ended 31 December 2023. GREENCOAT^{}[] UK WIND ## Notes to the Consolidated Financial Statements continued For the year ended 31 December 2023 ### 15. Share capital – ordinary shares of £0.01 | Date | Authorised, issued and fully paid | Number of shares issued | Share capital £'000 | Share premium £'000 | Capital redemption reserve £'000 | Total £'000 | | --- | --- | --- | --- | --- | --- | --- | | **1 January 2023** | | **2,318,089,989** | **23,181** | **2,470,396** | **—** | **2,493,577** | | **Shares issued to the Investment Manager** | | | | | | | | 3 February 2023 | True-up of 2022 and Q1 2023 Equity Element | 167,923 | 2 | 373 | — | 375 | | 5 May 2023 | Q2 2023 Equity Element | 225,441 | 2 | 373 | — | 375 | | 4 August 2023 | Q3 2023 Equity Element | 226,182 | 2 | 373 | — | 375 | | | | 619,546 | 6 | 1,119 | — | 1,125 | | Share buybacks | | (6,577,736) | (66) | — | 66 | — | | **31 December 2023** | | **2,312,131,799** | **23,121** | **2,471,515** | **66** | **2,494,702** | | Date | Authorised, issued and fully paid | Number of shares issued | Share capital £'000 | Share premium £'000 | Total £'000 | | --- | --- | --- | --- | --- | --- | | **1 January 2022** | | **2,317,097,822** | **23,171** | **2,468,940** | **2,492,111** | | **Shares issued to the Investment Manager** | | | | | | | 4 February 2022 | True-up of 2021 and Q1 2022 Equity Element | 254,855 | 3 | 372 | 375 | | 6 May 2022 | Q2 2022 Equity Element | 251,219 | 3 | 372 | 375 | | 5 August 2022 | Q3 2022 Equity Element | 244,151 | 2 | 373 | 375 | | 4 November 2022 | Q4 2022 Equity Element | 241,942 | 2 | 373 | 375 | | | | 992,167 | 10 | 1,490 | 1,500 | | **Other** | | | | | | | 1 January 2022 | Less costs relating to 29 November 2021 share issue | — | — | (34) | (34) | | **31 December 2022** | | **2,318,089,989** | **23,181** | **2,470,396** | **2,493,577** | 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 residual assets of the Company. Pursuant to the terms of the Investment Management Agreement, the Investment Manager receives an Equity Element as part payment of its investment management fee as disclosed in note 3. The figures given in the table in note 3 include the true-up amount of the investment management fee for the periods calculated in accordance with the Investment Management Agreement and issued subsequent to 31 December 2023. Following the commencement of the share buyback programme at the end of October 2023, the Company repurchased and cancelled 6.6 million shares in the final 2 months of the year. Further details regarding the Company's purchase of its own shares are included in the Chairman's Statement on page 3. ### 16. Net assets per share | Group and Company | 31 December 2023 | 31 December 2022 | | --- | --- | --- | | Net assets – £'000 | 3,793,997 | 3,873,228 | | Number of ordinary shares issued | 2,312,131,799 | 2,318,089,989 | | **Total net assets – pence** | **164.1** | **167.1** | 91 Greencoat UK Wind PLC Annual Report for the year ended 31 December 2023 ## Notes to the Consolidated Financial Statements continued For the year ended 31 December 2023 ### 17. Reconciliation of operating profit for the year to net cash from operating activities | Group | For the year ended 31 December 2023 £'000 | For the year ended 31 December 2022 £'000 | | --- | --- | --- | | Operating profit for the year | 193,976 | 986,638 | | **Adjustments for:** | | | | Unrealised movement in fair value of investments (note 9) | 191,402 | (446,096) | | Investment acquisition costs | 2,797 | 3,146 | | (Increase)/decrease in receivables | (38,639) | 144 | | Increase in payables | 9,157 | 519 | | Equity Element of Investment Manager's fee (note 3) | 1,500 | 1,500 | | Tax paid | (392) | — | | **Net cash flows from operating activities** | **359,801** | **545,851** | | Company | For the year ended 31 December 2023 £'000 | For the year ended 31 December 2022 £'000 | | --- | --- | --- | | Operating profit for the year | 193,976 | 986,638 | | **Adjustments for:** | | | | Unrealised movement in fair value of investments (note 9) | (227,153) | (1,019,502) | | Increase in receivables | (40,253) | (19) | | Increase in payables | 6,627 | 434 | | Equity Element of Investment Manager's fee (note 3) | 1,500 | 1,500 | | Tax paid | (392) | — | | **Net cash flows from operating activities** | **(65,695)** | **(30,949)** | ### Reconciliation of cash flows and non-cash flow changes in liabilities arising from financing activities | Group and Company | Loans and borrowings £'000 | Other liabilities £'000 | | --- | --- | --- | | **As at 1 January 2023** | **1,100,000** | **6,168** | | Cash flows (net) | 690,000 | (67,773) | | Movements in Statement of Comprehensive Income | — | 67,396 | | **As at 31 December 2023** | **1,790,000** | **5,791** | | Group and Company | Loans and borrowings £'000 | Other liabilities £'000 | | --- | --- | --- | | **As at 1 January 2022** | **950,000** | **3,082** | | Cash flows (net) | 150,000 | (29,689) | | Movements in Statement of Comprehensive Income | — | 32,775 | | **As at 31 December 2022** | **1,100,000** | **6,168** | 92 GREENCOAT^{}[] UK WIND # Notes to the Consolidated Financial Statements continued For the year ended 31 December 2023 ## 18. Financial risk management The Investment Manager and the Administrator report to the Board on a quarterly basis and provide information to the Board which allows it to monitor and manage financial risks relating to its operations. The Group's activities expose it to a variety of financial risks: market risk (including price risk, interest rate risk and foreign currency risk), credit risk and liquidity risk. The Group's market risk is managed by the Investment Manager in accordance with the policies and procedures in place. The Group's overall market positions are monitored on a quarterly basis by the Board. ### Price risk Price risk is defined as the risk that the fair value of a financial instrument held by the Group will fluctuate. Investments are measured at fair value through profit or loss and are valued on a discounted cash flow basis. Therefore, the value of these investments will be (amongst other risk factors) a function of the discounted value of their expected cash flows and, as such, will vary with movements in interest rates and competition for such assets. As disclosed in note 9, the key assumptions determining fair value of investments are subjective and therefore it is feasible that a reasonable alternative assumption may be used resulting in a different valuation for these investments. ### Interest rate risk The Group's interest rate risk on interest bearing financial assets is limited to interest earned on security cash deposits. The Group also has exposure to interest rate risk due to floating interest rates required to service external borrowings through the revolving credit facility and the unhedged £115 million term loan tranche with AXA. An increase of 1 per cent (2022: 3 per cent) represents the Investment Manager's assessment of a reasonably possible change in interest rates. Should the SONIA rate increase by 1 per cent, the annual interest due on the facility and term loan would increase by £5,150,000 (2022: £6,000,000) on the basis that the revolving credit facility is £400 million drawn (2022: £200 million). The Group's only other exposure to interest rate risk is due to the £75 million term loan with AXA and £150 million term loan with Lloyds that are hedged by different counterparties. No material impact is expected for these swaps. The Investment Manager regularly monitors interest rates to ensure the Group has adequate provisions in place in the event of significant fluctuations. The associated interest rate swaps on amounts drawn under the other term debt facilities detailed in note 13, effectively set interest payable at a fixed rate for the full term of the loans, thereby mitigating the risks associated with the variability of cash flows arising from interest rate fluctuations. The Board considers that, as shareholder loan investments bear interest at a fixed rate, they do not carry any interest rate risk. 93 Greencoat UK Wind PLC Annual Report for the year ended 31 December 2023 ## Notes to the Consolidated Financial Statements continued For the year ended 31 December 2023 18. Financial risk management continued 94 Interest rate risk continued The Group’s interest bearing assets and liabilities as at 31 December 2023 are summarised below: Fixed rate Floating rate Group £’000 £’000 Assets Security cash deposits (note 11) — 40,119 Other receivables (note 11) — 111 Investments 1,484,003 — 1,484,003 40,230 Liabilities Loans and borrowings (note 13) (1,275,000) (515,000) (1,275,000) (515,000) The Group’s interest bearing assets and liabilities as at 31 December 2022 are summarised below: Fixed rate Floating rate Group £’000 £’000 Assets Investments 1,087,081 — 1,087,081 — Liabilities Loans and borrowings (note 13) (900,000) (200,000) (900,000) (200,000) The Company’s interest bearing assets and liabilities as at 31 December 2023 are summarised below: Fixed rate Floating rate Company £’000 £’000 Assets Security cash deposits (note 11) — 40,119 Other receivables (note 11) — 111 — 40,230 Liabilities Loans and borrowings (note 13) (1,275,000) (515,000) (1,275,000) (515,000) The Company’s interest bearing assets and liabilities as at 31 December 2022 are summarised below: Fixed rate Floating rate Company £’000 £’000 Liabilities Loans and borrowings (note 13) (900,000) (200,000) (900,000) (200,000) GREENCOAT^{}[] UK WIND ## Notes to the Consolidated Financial Statements continued For the year ended 31 December 2023 ### 18. Financial risk management continued #### Foreign currency risk Foreign currency risk is defined as the risk that the fair values of future cash flows will fluctuate because of changes in foreign exchange rates. The Group's financial assets and liabilities are denominated in GBP and substantially all of its revenues and expenses are in GBP. The Group is not considered to be materially exposed to foreign currency risk. #### Credit risk Credit risk is the risk of loss due to the failure of a borrower or counterparty to fulfil its contractual obligations. The Group is exposed to credit risk in respect of other receivables, cash at bank, security cash deposits, loan investments and loan advances. The Group's credit risk exposure is minimised by dealing with financial institutions with investment grade credit ratings and making loan investments which are equity in nature. As loan investments are carried at fair value, any credit risk movement is reflected in the fair value. The Investment Manager regularly reviews the future cash flows and valuations of the investee companies, to gain comfort as to the recoverability of the loans. No balances are past due or impaired. The table below details the Group's maximum exposure to credit risk: | Group | 31 December 2023 £'000 | 31 December 2022 £'000 | | --- | --- | --- | | Other receivables (note 11) | 859 | 717 | | Cash at bank | 21,805 | 19,783 | | Security cash deposits (note 11) | 40,119 | — | | Loan investments | 1,484,003 | 1,087,081 | | | **1,546,786** | **1,107,581** | The table below details the Company's maximum exposure to credit risk: | Company | 31 December 2023 £'000 | 31 December 2022 £'000 | | --- | --- | --- | | Other receivables (note 11) | 111 | 3 | | Cash at bank | 52 | 2,446 | | Security cash deposits (note 11) | 40,119 | — | | Loan investments | 2,696,103 | 2,343,715 | | | **2,736,385** | **2,346,164** | The table below shows the cash balances of the Group and the credit rating for each counterparty: | Group | Rating | 31 December 2023 £'000 | 31 December 2022 £'000 | | --- | --- | --- | --- | | RBS International | A | 21,805 | 17,505 | | The Crown Estate | n/a | — | 2,278 | | | | **21,805** | **19,783** | The table below shows the cash balances of the Company and the credit rating for each counterparty: | Company | Rating | 31 December 2023 £'000 | 31 December 2022 £'000 | | --- | --- | --- | --- | | RBS International | A | 52 | 168 | | The Crown Estate | n/a | — | 2,278 | | | | **52** | **2,446** | 95 Greencoat UK Wind PLC Annual Report for the year ended 31 December 2023 ## Notes to the Consolidated Financial Statements continued For the year ended 31 December 2023 ### 18. Financial risk management continued #### Liquidity risk Liquidity risk is the risk that the Group and the Company may not be able to meet a demand for cash or fund an obligation when due. The Investment Manager and the Board continuously monitor forecast and actual cash flows from operating, financing and investing activities to consider payment of dividends, the repurchase of ordinary shares, repayment of the Company's outstanding debt or further investing activities. The significant net current liabilities position of the Group at 31 December 2023 is due to both the Company's revolving credit facility and two of the Company's term debt tranches with NAB and CBA maturing within 12 months of the year end and therefore being classified as current liabilities. The Company expects to refinance the maturing term debt during 2024. The following tables detail the Group's expected maturity for its financial assets (excluding equity) and liabilities together with the contractual undiscounted cash flow amounts: | Group – 31 December 2023 | Less than 1 year £'000 | 1 – 5 years £'000 | 5+ years £'000 | Total £'000 | | --- | --- | --- | --- | --- | | **Assets** | | | | | | Other receivables (note 11) | 859 | — | — | 859 | | Cash at bank | 21,805 | — | — | 21,805 | | Security cash deposits (note 11) | 40,119 | — | — | 40,119 | | Loan investments | — | — | 1,484,003 | 1,484,003 | | **Liabilities** | | | | | | Other payables (note 12) | (17,573) | — | — | (17,573) | | Loans and borrowings | (589,744) | (1,129,977) | (369,089) | (2,088,810) | | | **(544,534)** | **(1,129,977)** | **1,114,914** | **(559,597)** | | Group – 31 December 2022 | Less than 1 year £'000 | 1 – 5 years £'000 | 5+ years £'000 | Total £'000 | | **Assets** | | | | | | Other receivables (note 11) | 717 | — | — | 717 | | Cash at bank | 19,783 | — | — | 19,783 | | Loan investments | — | — | 1,087,081 | 1,087,081 | | **Liabilities** | | | | | | Other payables (note 12) | (8,354) | — | — | (8,354) | | Loans and borrowings | (185,768) | (819,975) | (212,815) | (1,218,558) | | | **(173,622)** | **(819,975)** | **874,266** | **(119,331)** | The shareholder loan investments are repayable on demand. The following tables detail the Company's expected maturity for its financial assets (excluding equity) and liabilities together with the contractual undiscounted cash flow amounts: | Company – 31 December 2023 | Less than 1 year £'000 | 1 – 5 years £'000 | 5+ years £'000 | Total £'000 | | --- | --- | --- | --- | --- | | **Assets** | | | | | | Other receivables (note 11) | 111 | — | — | 111 | | Cash at bank | 52 | — | — | 52 | | Security cash deposits (note 11) | 40,119 | — | — | 40,119 | | Loan investments | — | — | 2,696,103 | 2,696,103 | | **Liabilities** | | | | | | Other payables (note 12) | (14,793) | — | — | (14,793) | | Loans and borrowings | (589,744) | (1,129,977) | (369,089) | (2,088,810) | | | **(564,255)** | **(1,129,977)** | **2,327,014** | **632,782** | 96 GREENCOAT^{}[] UK WIND # Notes to the Consolidated Financial Statements continued For the year ended 31 December 2023 ## 18. Financial risk management continued ### Liquidity risk continued | Company – 31 December 2022 | Less than 1 year £'000 | 1 – 5 years £'000 | 5+ years £'000 | Total £'000 | | --- | --- | --- | --- | --- | | **Assets** | | | | | | Other receivables (note 11) | 3 | — | — | 3 | | Cash at bank | 2,446 | — | — | 2,446 | | Loan investments | — | — | 2,343,715 | 2,343,715 | | **Liabilities** | | | | | | Other payables (note 12) | (8,159) | — | — | (8,159) | | Loans and borrowings | (185,768) | (819,975) | (212,815) | (1,218,558) | | | **(191,478)** | **(819,975)** | **2,130,900** | **1,119,447** | The Group and Company will use cash flow generation, equity placings, debt refinancing or disposal of assets to manage liabilities as they fall due in the longer term. ### Capital risk management The Company considers its capital to comprise ordinary share capital, distributable reserves and retained earnings. The Company is not subject to any externally imposed capital requirements. The Group's and the Company's primary capital management objectives are to ensure the sustainability of its capital to support continuing operations, meet its financial obligations and allow for growth opportunities. Generally, acquisitions are anticipated to be funded with a combination of current cash, debt and equity. ## 19. Related party transactions Amounts paid to the Directors during the year are as outlined in the Directors' Remuneration Report on pages 45 to 48. £46,461 (2022: £39,927) of employer's national insurance was paid on non-executive Directors' fees during the year. 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). 97 Greencoat UK Wind PLC Annual Report for the year ended 31 December 2023 ## 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 | | | | --- | --- | --- | --- | | | Income received £ | Expenses paid to the Investment Manager £ | Expenses paid to the 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: £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 | 1,366,019 | 683,010 | 683,010 | | Braes of Doune, Drone Hill, North Rhins, Sixpenny Wood, Yelvertoft: £42,688 income receivable per wind farm per annum £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 | 213,440 | 71,147 | 142,293 | | Dalquhandy: £32,200 income receivable per annum £16,100 expenses payable to the Investment Manager per annum £16,100 expenses payable to the Administrator per annum | 32,200 | 16,100 | 16,100 | | Dunmaglass Holdco, Stronelairg Holdco: £8,574 income receivable per wind farm per annum £nil expenses payable to the Investment Manager per wind farm per annum £8,574 expenses payable to the Administrator per wind farm per annum | 17,148 | — | 17,148 | | Bicker Fen, Fenlands: £3,274 income receivable per wind farm per annum £3,274 expenses payable to the Investment Manager per wind farm per annum £nil expenses payable to the Administrator per wind farm per annum | 6,548 | 6,548 | — | | Walney Holdco: £21,570 income receivable per annum £10,785 expenses payable to the Investment Manager per annum £10,785 expenses payable to the Administrator per annum | 21,570 | 10,785 | 10,785 | | Humber Holdco: £8,459 income receivable per annum £nil expenses payable to the Investment Manager per annum £8,459 expenses payable to the Administrator per annum | 8,459 | — | 8,459 | | Burbo Bank Extension: £6,740 income receivable per annum £6,740 expenses payable to the Investment Manager per annum £nil expenses payable to the Administrator per wind farm per annum | 6,740 | 6,740 | — | | **Total** | **1,672,124** | **794,329** | **877,795** | 98 GREENCOAT^{}[] UK WIND ## Notes to the Consolidated Financial Statements continued For the year ended 31 December 2023 ### 19. Related party transactions continued | | For the year ended 31 December 2022 | | | | --- | --- | --- | --- | | | Income received £ | Expenses paid to the Investment Manager £ | Expenses paid to the 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)}: £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 | 864,312 | 432,156 | 432,156 | | 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 £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 | 468,922 | 156,307 | 312,615 | | Dunmaglass Holdco, Stronelairg Holdco: £7,848 income receivable per wind farm per annum £nil expenses payable to the Investment Manager per wind farm per annum £7,848 expenses payable to the Administrator per wind farm per annum | 15,697 | — | 15,697 | | Bicker Fen, Fenlands: £2,997 income receivable per wind farm per annum £2,997 expenses payable to the Investment Manager per wind farm per annum £nil expenses payable to the Administrator per wind farm per annum | 5,994 | 5,994 | — | | Walney Holdco: £19,746 income receivable per annum £9,873 expenses payable to the Investment Manager per annum £9,873 expenses payable to the Administrator per annum | 19,746 | 9,873 | 9,873 | | Humber Holdco: £7,744 income receivable per wind farm per annum £nil expenses payable to the Investment Manager per wind farm per annum £7,744 expenses payable to the Administrator per wind farm per annum | 7,744 | — | 7,744 | | **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. 99 Greencoat UK Wind PLC Annual Report for the year ended 31 December 2023 ## 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 31 December 2023 £'000 | For the year ended 31 December 2022 £'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. 100 ## Notes to the Consolidated Financial Statements continued For the year ended 31 December 2023 G R E E N C O A T 101 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. Greencoat UK Wind PLC Annual Report for the year ended 31 December 2023 ## 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. | | Loans at 1 January 2023^{(1)} £'000 | Loans advanced in the year^{(2)} £'000 | Loans restructured in the year £'000 | Loan repayments in the year £'000 | Loans at 31 December 2023 £'000 | Accrued interest at 31 December 2023 £'000 | Total £'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. 102 ## Company Information Directors (all non-executive) Registered Company Number Lucinda Riches C.B.E (Chairman) 08318092 Martin McAdam Caoimhe Giblin Registered Office Nick Winser C.B.E. (1) Jim Smith (2) Shonaid Jemmett-Page Investment Manager | Schroders Greencoat LLP | Registered Auditor | | --- | --- | | 4th Floor, The Peak | BDO LLP | | 5 Wilton Road | 55 Baker Street | | London | London | | SW1V 1AN | W1U 7EU | | Administrator and Company Secretary | Joint Broker | | Ocorian Administration (UK) Limited | RBC Capital Markets | | Unit 4, The Legacy Building | 100 Bishopsgate | | Northern Ireland Science Park | London | | Queen’s Road | EC2N 4AA | Belfast BT3 9DT Joint Broker Jefferies International Limited | Depositary | 100 Bishopsgate | | --- | --- | | Ocorian Depositary (UK) Limited | London | | Unit 4, The Legacy Building | EC2N 4JL | Northern Ireland Science Park Queen’s Road Belfast BT3 9DT Registrar Computershare Limited The Pavilions Bridgwater Road Bristol BS99 6ZZ (1) Appointed to the Board with effect from 1 May 2023. (2) Retired from the Board with effect from 28 April 2023. G R E E N C O A T 103 U K W I N D 5th Floor 20 Fenchurch Street London EC3M 3BY Greencoat UK Wind PLC Annual Report for the year ended 31 December 2023 ## Supplementary Information (unaudited) 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. 104 ## EU SFDR Disclosures (unaudited) 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 Sustainable investment Did this financial product have a sustainable investment objective? (tick and fill in means an investment in as releva nt, the percentage figure re presents the minimum com mitment to an economic activity sustainable investments) that contributes to an environmental or social GG GG  YE S GG GG NO objective, provided that the investment does | | | It made sustainable investments with | It promoted Environmental/Social | | --- | --- | --- | --- | | not significantly harm |  | | | | | | an environmental objective: 99% | (E/S) characteristics and while it did | any environmental or social objective and not have as its objective a sustainable in economic activities that qualify that the investee  investment, it had a proportion of as environmentally sustainable companies follow good ___% of sustainable investmentss governance practices. under the EU Taxonomy with an environmental objective in in economic activities that do not The EU Taxonomy is a economic activities that qualify as qualify as environmentally classification system laid environmentally sustainable under down in Regulation (EU) sustainable under the EU the EU Taxonomy 2020/852 establishing a Taxonomy list of environmentally with an environmental objective sustainable economic in economic activities that do activities. That Regulation does not lay not qualify as environmentally down a list of socially sustainable under the EU Taxonomy sustainable economic activities. Sustainable with a social objective investments with an environmental objective It made sustainable investments with It promoted E/S characteristics, but did might be aligned with a social objective: ___% not make any sustainable investments the Taxonomy or not. To what extent was the sustainable investment objective of this financial product met? Sustainability indicators The Company invests in operating UK wind farms, supporting the transition to Net Zero. measure how the The Company’s aim is to provide investors with an annual dividend per Ordinary Share sustainable objectives that increases in line with RPI inflation while preserving the capital value of its investment of this financial product portfolio on a real basis over the long term, through re-investment of excess cashflow. are attained. 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. G R E E N C O A T 105 U K W I N D Greencoat UK Wind PLC Annual Report for the year ended 31 December 2023 ## EU SFDR Disclosures (unaudited) continued 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. ### ● 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 CO2e - 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. ### ● ...and compared to previous periods? | Sustainability Indicator | 2023 | 2022 | | --- | --- | --- | | Renewable electricity generated (GWh) | 4,743 | 4,362 | | Greenhouse gas emissions avoided (tCO2) | 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. ### ● How 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). (1) This reflects CO2e 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 kgCO2e/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 ## EU SFDR Disclosures (unaudited) continued 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. G R E E N C O A T 107 U K W I N D Greencoat UK Wind PLC Annual Report for the year ended 31 December 2023 ## 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? The list includes the See the response to the question above “How were the indicators for adverse impacts on investments constituting sustainability factors taken into account.” the greatest proportion of investments of the What were the top investments of this financial product? financial product during the reference period: 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? Asset allocation GG Wh at was the asset allocation? describes the share of investments in specific #1 Sustainable assets. covers sustainable investments with environmental or social objectives. #2 Not sustainable includes investments #1 Sustainable Environmental Taxonomy- which do not qualify 99% 100% aligned (100%) as sustainable Investments investments. 108 #2 Not sustainable 1% ## EU SFDR Disclosures (unaudited) continued 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? | Taxonomy-aligned | GG | Di | d the financial product invest in fossil gas and/or nuclear energy related | | | --- | --- | --- | --- | --- | | activities are expressed | | | | 1 | | | | activities complying with the EU Taxonomy | | ? | as a share of: The Company did not make any investments in fossil gas or nuclear energy activities. • turnover reflecting In line with its Investment Policy, the Company will only invest in UK wind farms. the share of revenue from green activities The graphs below show in green the percentage of investments that were aligned of investee with the EU Taxonomy. As there is no appropriate methodology to determine the companies. taxonomy alignment of sovereign bonds*, the first graph shows the Taxonomy • capital expenditure (CapEx) showing the alignment in relation to all the investments of the financial product including green investments sovereign bonds, while the second graph shows the Taxonomy alignment only in made by investee relation to the investments of the financial product other than sovereign bonds. companies, e.g. for a transition to a green 1. Taxonomy-alignment of investments 2. Taxonomy-alignment of investments economy. including sovereign bonds* excluding sovereign bonds* • operational expenditure (OpEx) reflecting green operational activities of investee companies. *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 Turnover 100% 100% 1 Fossil gas and/or nuclear related activities will only comply with the EU Taxonomy where they contribute to CapEx CapEx 100% 100% 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 OpEx OpEx 100% 100% (EU) 2022/1214 | | 0% 20% 40% 60% 80% 100% 0% 20% 40% 60% 80% 100% | | | | --- | --- | --- | --- | | G R E E N C O A T | | | 109 | | | | Taxonomy aligned investments Taxonomy aligned investments | | U K W I N D Other investments Other investments Greencoat UK Wind PLC Annual Report for the year ended 31 December 2023 ## EU SFDR Disclosures (unaudited) continued 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. 110 ## EU SFDR Disclosures (unaudited) continued 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 G R E E N C O A T 111 U K W I N D Greencoat UK Wind PLC Annual Report for the year ended 31 December 2023 ## EU SFDR Disclosures (unaudited) continued 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 (1) indicators listed in Annex I of the RTS ). 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 Climate and other environment-related Share of non-renewable energy consumption and production 15 indicators 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 | Social and | Lack of processes and compliance mechanisms to monitor | | --- | --- | | employee, respect | compliance with UN Global Compact principles and OECD | | for human rights, | Guidelines for Multinational Enterprises 1 11 | anti corruption and Exposure to controversial weapons (anti-personnel mines, anti bribery cluster munitions, chemical weapons and biological weapons) 1 14 matters 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 (1) The Regulatory Technical Standards accompanying the EU Sustainable Finance Disclosure Regulation. 112 ## EU SFDR Disclosures (unaudited) continued 2. Description of the PAIs on sustainability factors Actions taken, and actions planned Impact Impact and targets set for the Adverse sustainability indicator Metric 2023 2022 Explanation next reference period | Greenhouse | 1. GHG emissions Scope 1 GHG emissions 13 tonnes 149 tonnes | | | | | Carbon footprint | The GHG emissions of | | --- | --- | --- | --- | --- | --- | --- | --- | | gas | | of CO | 2 | of CO | 2 | indicators are measured | the Company increased | | emissions | | | | | | in line with the industry | year on year. This was | Scope 2 GHG emissions 1,485 tonnes 1,422 tonnes | | | | | standard GHG Protocol | mostly driven by Scope 3 | | --- | --- | --- | --- | --- | --- | | of CO | 2 | of CO | 2 | | | | | | | | based on an equity | emissions which reflects | (market-based) (market-based) control approach, the purchase of new 2,162 tonnes 1,731 tonnes meaning emissions from assets for which carbon of CO 2 of CO 2 the Group’s operations emissions reflect those (location-based) (location-based) are weighted according associated with the to the Group’s SPV Scope 3 GHG emissions 261,138 tonnes 136,161 tonnes original construction ownership interest. of CO 2 of CO 2 (embodied emissions) of Scope emissions those assets. More detail Total GHG emissions 262,637 tonnes 137,732 tonnes calculations are verified on the drivers of | | of CO | 2 | of CO | 2 | by third party | | | --- | --- | --- | --- | --- | --- | --- | | | | | | | consultants. | emissions can be found | | 2. Carbon footprint Carbon footprint 42.9 tonnes 24.6 tonnes | | | | | | in the historical | Scope 3 emissions are of CO 2 of CO 2 comparison section on the result of activities pages 120 to 121. from assets not owned or | 3. GHG intensity GHG intensity of 1,193 tonnes 535 tonnes | | | | controlled by the Group, | In 2023, the Investment | | --- | --- | --- | --- | --- | --- | | of investee investee companies of CO | 2 | of CO | 2 / | but that the Group | Manager worked to | | companies £ million | | | | indirectly impacts in its | reduce GHG emissions | | | | revenue | | value chain. Scope 3 | associated with Scope 2 | | | | | | emissions include all | by switching import | sources not within the electricity consumption Company’s Scope 1 and for 16% of the assets in 2 boundary and include, its portfolio to fully inter alia, emissions renewable tariffs. Based arising from the on the switching of tariffs construction of each wind for these assets, using farm acquired in 2023, 2022 reported Scope 2 including those emissions carbon emissions for the associated with the | manufacturing and | Group’s portfolio, this | | | --- | --- | --- | | transport of all | initiative resulted in a | | | equipment and material, | reduction of 227tCO | 2 , a | | before the wind farm was | 16% reduction from the | | | commissioned as well as | total portfolio Scope 2 | | | the expected spare part | emissions on a like-for- | | | provision throughout its | like basis. The asset | | | lifetime. | 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. G R E E N C O A T 113 U K W I N D Greencoat UK Wind PLC Annual Report for the year ended 31 December 2023 ## 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 | Greenhouse | 4. Exposure to Share of investments in 0% 0% | The Group does not have | The Investment Manager | | --- | --- | --- | --- | | gas | companies active companies active in the | any exposure to the fossil | continues to screen all | | emissions | in the fossil fossil fuel sector | fuel sector and will only | investments against this | | continued | fuel sector | invest in UK wind farms in | exclusion list as part of | | | | accordance with its | initial investment | | | | Investment Objective and | screening. | Investment Policy. With regards to non- renewable energy | 5. Share of non Share of non renewable Production Production | | The Group’s wind farm | consumption, see the | | --- | --- | --- | --- | | renewable energy energy consumption share: share: | | portfolio generates | comment in relation to | | consumption and non renewable 0% non 0% non | | renewable electricity that | PAIs 1-3 above | | and production energy production of renewable. renewable. | | avoids the carbon | | | | investee companies Consumption Consumption | emissions and air | | pollution that would have from non renewable share: share: otherwise been energy sources 41.9% non 38% non generated using fossil compared to renewable renewable. renewable. fuels. These assets energy sources, consume electricity in the expressed as a generation of renewable percentage of total electricity. energy sources | | 6. Energy Energy consumption in N/A N/A | | PAI 6 is considered not | | --- | --- | --- | --- | | | consumption MWh per million GBP | | relevant for the portfolio | | | intensity per high of revenue of investee | | as the investment assets | | | impact climate companies, per high | | are in high impact | | | sector impact climate sector | | climate sectors. | | Water 8. Emissions to Tonnes of emissions to N/A N/A | | | PAI 8 is considered not | | | water water generated by | | relevant for the porfolio | | | | investee companies | as the investments do | | | | per million GBP invested, | not produce emissions | | | | expressed as a weighted | to water. | average | Waste 9. Hazardous waste Tonnes of hazardous N/A N/A | | | There was a very minor | | --- | --- | --- | --- | | | and radioactive waste and radioactive | | spill of oil at a wind | | | waste ratio waste generated by | | turbine site in 2023 of | | | | investee companies | 0.045 tonnes which was | | | | per million GBP invested, | reported to SEPA. | Remediation actions expressed as a weighted were implemented average 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. 114 ## 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 | Social and | 10. Violations of Share of investments in Data not Data not | | The Company invests in | In 2023, the Investment | | --- | --- | --- | --- | --- | | employee | | UN Global investee companies that available available | UK wind farms which are | Manager adopted the | | matters | | Compact have been involved in | held through special | Schroders Group’s | | | | principles and violations of the UNGC | purpose vehicles | Global Norms | | | | Organisation principles or OECD | (“SPVs”), which are | Framework to support in | | | | for Economic Guidelines for | standalone legal entities | the identification of | | | | Cooperation Multinational Enterprises | that typically do not have | companies and | | | | and | any employees. The SPVs | investments deemed in | | | | Development | outsource all operations, | breach of OECD and | | | | (OECD) | maintenance and | UNGC principles and | | | | Guidelines for | management activities to | updated the Investment | | | | Multinational | third parties, through | Manager’s Greencoat | | | | Enterprises | long term contracts. | ESG Policy to reflect | this. The Investment Manager | conducts initial due | The ultimate output of | | --- | --- | | diligence and provides | this framework is the | | ongoing monitoring of | Global Norms list which | | SPVs to ensure their | comprises a list of | | alignment with the | companies that have: | | Minimum Safeguards. | been identified as | | Where possible, the | causing significant | | Investment Manager | damage; not sufficiently | | imposed obligations on | addressed the issue in | | the key service providers | question through | | involved in the | transparent | | operations and | communication and | | management of the SPVs | action; and not provided | | to ensure their ongoing | sufficient remedy for | | compliance. In most | affected stakeholders. | | instances, this was | This list is then applied | | achieved by the | as an exclusion criteria | | Investment Manager’s | for Article 9 funds to | | ‘Code of Conduct Side | ensure that investments | | Letter’ (or an equivalent | in scope adhere to the | | standard) which requires | ‘Do No Significant Harm’ | | key service providers to | element of SFDR. | comply with all applicable In addition to the Global laws, rules, regulations Norms process noted and overarching above, the Investment principles in the countries Manager is working to where they operate develop a standard (which includes the methodology to assess Minimum Safeguards). the alignment of the key This covers anti bribery service providers with and corruption, financial the OECD Guidelines for crime, data protection Multinational Enterprises and employment and and the UN Guiding health and safety laws Principles on Business (including those relating and Human Rights. This to human rights, human commenced in 2023 and trafficking, modern the Investment Manager slavery, and public expects the safety). methodology to be completed and implemented in 2024. G R E E N C O A T 115 U K W I N D Greencoat UK Wind PLC Annual Report for the year ended 31 December 2023 ## 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 | Social and | 11. Lack of processes Share of investments Data not Data not | | | The Investment Manager | | --- | --- | --- | --- | --- | | employee | | and compliance in investee companies available available | | is currently enhancing its | | matters | | mechanisms without policies to | | processes to monitor | | (continued) | | to monitor monitor compliance with | | service provider’s | | | | compliance with the UNGC principles or | | adherence to compliance | | | | UN Global OECD Guidelines for | | with UNGC principles | | | | Compact Multinational Enterprises | | and OECD Guidelines | | | | principles or grievance/complaints | | through updates to the | | | | and OECD handling mechanisms to | | Code of Conduct. The | | | | Guidelines for address violations of the | | Investment Manager | | | | Multinational UNGC principles or | | commenced this project | | | | Enterprises OECD Guidelines for | | in 2023, including | | | | | Multinational Enterprises | 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. | 14. Exposure to Share of investments 0% 0% | | Exposure to controversial | The Investment Manager | | --- | --- | --- | --- | | | controversial in investee companies | weapons is not within the | continues to screen all | | | weapons involved in the | Company’s Investment | investments against this | | | (anti-personnel manufacture or selling of | Objective and not | exclusion list as part of | | | mines, cluster controversial weapons | permissible within its | initial investment | Investment Policy. munitions, screening. chemical weapons and biological weapons) | Water, waste | 14. Natural species | | Share of investments in | N/A | N/A | All habitat management | Wind farms have the | | --- | --- | --- | --- | --- | --- | --- | --- | | and material | | and protected | investee companies | | | plans are agreed for | potential to have a | | emissions | | areas | whose operations | | | relevant sites to ensure | negative environmental | | | | | affect threatened | | | that the environment in | impact through the | | | | | species | | | and surrounding each | manufacturing and supply | | | | | | | | wind farm is carefully | chain process or locally | | | | | | | | protected. | through the ongoing | | | | | Share of investments in | Percentage of | Percentage of | | | management of the investee companies SPV SPV projects. The Company’s without a biodiversity investments investments ESG policy helps to protection policy without without mitigate against these covering operational habitat habitat risks. The policies in place sites owned, leased, management management outline the environmental managed in a plans , or any plans, or any standards the Company protected area or an environmental environmental aims to meet. | area of high | planning | planning | | | --- | --- | --- | --- | | biodiversity value | requirements, | requirements, | The Investment Manager | | outside protected | in place: 0% | in place: 0% | continues to carry out due | | areas | | | 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. 116 ## 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 | Social and | 3. Number of days Number of workdays Number of Number of | | A set of KPIs to | The Investment Manager | | --- | --- | --- | --- | --- | | employee | lost to injuries, lost to injuries, workdays workdays | | improve health and | has stringent health and | | matters | accidents, accidents, or illness lost: 30 lost: 41 | | safety management | safety policies and | | | fatalities or illness in investee companies | | and performance is | processes in place, | | | | This figure is | monitored | which include safety | | | | restated. | continuously. These are | statements, a Schroders | | | | | reported at least on a | Capital Health and | | | | | monthly basis directly | Safety Forum, | | | | | to the Investment | incidents/developing | | | | | Manager, the Directors | trends reports, site visits, | | | | | of the SPVs, and the | onboarding and training, | | | | | Board. | 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. G R E E N C O A T 117 U K W I N D Greencoat UK Wind PLC Annual Report for the year ended 31 December 2023 ## 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 | Social and | 4. Lack of a supplier Share of investments in Data not Data not | | Upon acquisition, all | The Investment Manager | | --- | --- | --- | --- | --- | | employee | code of conduct investee companies available available | | wholly owned SPV’s | is currently enhancing its | | matters | | without any supplier | adopt the policies of | processes to monitor | | (continued) | | code of conduct | the Company including | service provider’s | | | | (against unsafe working | the ESG Policy which | adherence to compliance | | | | conditions, precarious | states expectations | with UNGC principles | | | | work, child labour and | regarding service | and OECD Guidelines | | | | forced labour) | providers in relation to | through updates to the | | | | | legal and regulatory | Code of Conduct. The | | | | | obligations related to | Investment Manager | | | | | ESG matters. | commenced this project | in 2023, including Where possible, the external legal counsel Investment Manager guidance, and will finalise imposes obligations on the updated Code of the key service Conduct in 2024. providers involved in the operations and The Manager will work to management of the roll out the updated portfolio to ensure their version to all service ongoing compliance. In providers. 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). | Anti 15. Lack of anti Share of investments 0% 0% | | Upon acquisition, all | | --- | --- | --- | | corruption corruption and in entities without | | wholly owned SPV’s | | and anti anti bribery policies on anti | | adopt the policies of | | bribery policies corruption and anti | | the Company including | | | bribery consistent | anti-corruption and | | | with the United | anti-bribery. These | | | Nations Convention | policies are regularly | | | against Corruption | reviewed by legal | experts, and are updated for new legislation and new geographies. 118 ## EU SFDR Disclosures (unaudited) continued 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. G R E E N C O A T 119 U K W I N D Greencoat UK Wind PLC Annual Report for the year ended 31 December 2023 ## 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. 120 ## 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. G R E E N C O A T 121 U K W I N D Greencoat UK Wind PLC Annual Report for the year ended 31 December 2023 ## EU SFDR Disclosures (unaudited) continued ### Annex #### Defined terms used in this statement For the purposes of this statement, the following definitions shall apply: 1. (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. (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. (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. (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. (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. (6) **Non renewable energy sources** means energy sources other than those referred to in point (5); 7. (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. (8) **Protected area** means designated areas in the European Environment Agency's Common Database on Designated Areas (CDDA); 9. (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. (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. (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. (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 # EU SFDR Disclosures (unaudited) continued (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: $$\sum_n^i \left( \frac{\text{current value of wind farm SPV}_i}{\text{fair value of wind farm SPV}_i} \times \text{investee company's Scope}(x) \text{ GHG emissions}_i \right)$$ (2) 'carbon footprint' shall be calculated in accordance with the following formula: $$\frac{\sum_n^i \left( \frac{\text{current value of wind farm SPV}_i}{\text{fair value of wind farm SPV}_i} \times \text{investee company's Scope 1, 2 and 3 GHG emissions}_i \right)}{\text{current value of all investments (€m)}}$$ (3) 'GHG intensity of investee companies' shall be calculated in accordance with the following formula: $$\sum_n^i \left( \frac{\text{current value of investment}_i}{\text{current value of all investments (€m)}} \times \frac{\text{investee company's Scope 1, 2 and 3 GHG emissions}_i}{\text{investee company's €m revenue}_i} \right)$$ (4) 'GHG intensity of sovereigns' shall be calculated in accordance with the following formula: $$\sum_n^i \left( \frac{\text{current value of investment}_i}{\text{current value of all investments (€m)}} \times \frac{\text{The country's Scope 1, 2 and 3 GHG emissions}_i}{\text{Gross Domestic Product}_i \text{ (€m)}} \right)$$ (5) 'inefficient real estate assets' shall be calculated in accordance with the following formula: $$((Value\ of\ real\ estate\ assets\ built\ before\ 31/12/2020\ with\ EPC\ of\ C\ or\ below) + (Value\ of\ real\ estate\ assets\ built\ after\ 31/12/2020\ with\ PED\ below\ NZEB\ in\ Directive\ 2010/31/EU))$$ $$Value\ of\ real\ estate\ assets\ required\ to\ abide\ by\ EPC\ and\ NZEB\ rules$$ 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$^{(10)}$. $^{(9)}$ 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) 123 Greencoat UK Wind PLC Annual Report for the year ended 31 December 2023 ## Defined Terms ABN AMRO means ABN AMO Bank N.V. Carbon Footprint means the calculation per TCFD guidance ni outstanding amount invested i total investee Aggregate Group Debt means the Group’s debt+equity i *investee scope 1 and 2 GHG emissions i proportionate share of outstanding third party Company market value borrowings, including its share of limited recourse debt in Hornsea 1 Carcant means Carcant Wind Farm (Scotland) Limited AGM means Annual General Meeting of the Company Cash Fee means the cash fee that the Investment Manager is entitled to under the Investment AIC means the Association of Investment Companies Management Agreement AIC Code means the AIC’s Code of Corporate CBA means Commonwealth Bank of Australia Governance CCGT means combined cycle gas turbine AIF means an Alternative Investment Fund as defined under the AIFMD CFD means Contract For Difference AIFM means an Alternative Investment Fund Manager Church Hill means Church Hill Wind Farm Limited as defined under the AIFMD CIBC means Canadian Imperial Bank of Commerce AIFMD means the Alternative Investment Fund Clyde means Clyde Wind Farm (Scotland) Limited Managers Directive CO 2 means carbon dioxide Alternative Performance Measure means a financial measure other than those defined or specified in the Company means Greencoat UK Wind PLC applicable financial reporting framework Corriegarth means Corriegarth Wind Energy Limited Andershaw means Andershaw Wind Power Limited Cotton Farm means Cotton Farm Wind Farm Limited ANZ means Australia and New Zealand Banking Group Limited CPI means the Consumer Price Index AXA means funds managed by AXA Investment Crighshane means Crighshane Wind Farm Limited Managers UK Limited Dalquhandy means Dalquhandy Wind Farm Limited Barclays means Barclays Bank PLC DCF means Discounted Cash Flow BDO LLP means the Company’s Auditor as at the reporting date Deeping St. Nicholas means Deeping St. Nicholas wind farm Bicker Fen means Bicker Fen Windfarm Limited Depreciation means the unwinding of the discount Bin Mountain means Bin Mountain Wind Farm (NI) rate assumptions Limited Douglas West means Douglas West Wind Farm Limited Bishopthorpe means Bishopthorpe Wind Farm Limited Drone Hill means Drone Hill Wind Farm Limited Board means the Directors of the Company DTR means the Disclosure Guidance and Transparency Rules sourcebook issued by the Financial Conduct Braes of Doune means Braes of Doune Wind Farm Authority (Scotland) Limited Dunmaglass means Dunmaglass Holdco and Breeze Bidco means Breeze Bidco (TNC) Limited Dunmaglass Wind Farm Brockaghboy means Brockaghboy Windfarm Limited Dunmaglass Holdco means Greencoat Dunmaglass Holdco Limited Burbo Bank Extension means Hoylake Wind Limited, Greencoat Burbo Extension Holding (UK) Limited, Dunmaglass Wind Farm means Dunmaglass Wind Burbo Extension Holding Limited and Burbo Extension Farm Limited Limited 124 ## Defined Terms continued Earl’s Hall Farm means Earl’s Hall Farm Wind Farm Investment Manager means Schroders Greencoat LLP Limited IPEV Valuation Guidelines means the International Equity Element means the ordinary shares issued to Private Equity and Venture Capital Valuation Guidelines the Investment Manager under the Investment IPO mean Initial Public Offering Management Agreement IRR means Internal Rate of Return ESG means Environmental, Social and Governance Kildrummy means Kildrummy Wind Farm Limited EU means European Union KPI means Key Performance Indicator EU SFDR means EU Sustainable Financial Disclosure Regulation Kype Muir Extension means Kype Extension Wind Farm Limited FCA means Financial Conduct Authority Langhope Rig means Langhope Rig Wind Farm Limited Fenlands means Fenland Windfarms Limited Levered portfolio IRR means the Internal Rate of FRC means the Financial Reporting Council Return with an assumed level of gearing GAV means Gross Asset Value Lindhurst means Lindhurst Wind Farm GB means Great Britain consisting of England, Listing Rules means the listing rules made by the UK Scotland and Wales Listing Authority under Section 73A of the Financial Glass Moor means Glass Moor wind farm Services and Markets Act 2000 Glen Kyllachy means Glen Kyllachy Wind Farm Limited Little Cheyne Court means Little Cheyne Court Wind Farm Limited Group means Greencoat UK Wind PLC and Greencoat UK Wind Holdco Limited Lloyds means Lloyds Bank PLC and Lloyds Bank Corporate Markets PLC Holdco means Greencoat UK Wind Holdco Limited London Array means London Array Holdco and Hornsea 1 means Hornsea 1 Holdco and Hornsea 1 London Array Limited Limited London Array Holdco means Greencoat London Array Hornsea 1 Holdco means Jupiter Investor TopCo Holdco Limited Limited Maerdy means Maerdy Wind Farm Limited Hoylake means Hoylake Wind Limited Middlemoor means Middlemoor Wind Farm Humber Gateway means Humber Holdco and Humber Wind Farm ML Wind means ML Wind LLP Humber Holdco means Greencoat Humber Limited NAB means National Australia Bank Humber Wind Farm means RWE Renewables UK Nanclach means Nanclach Limited Humber Wind Limited NAV means Net Asset Value HV means high voltage NAV per Share means the Net Asset Value per IAS means International Accounting Standards Ordinary Share IFRS means International Financial Reporting Net Zero means the UK Government’s strategy to Standards decarbonise all sectors of the UK economy Investment Management Agreement means the North Hoyle means North Hoyle Wind Farm Limited agreement between the Company and the Investment North Rhins means North Rhins Wind Farm Limited Manager G R E E N C O A T 125 U K W I N D Greencoat UK Wind PLC Annual Report for the year ended 31 December 2023 ## Defined Terms continued O&M means operations and maintenance Stronelairg Holdco means Greencoat Stronelairg Holdco Limited PPA means Power Purchase Agreement entered into by the Group’s wind farms Stronelairg Wind Farm means Stronelairg Wind Farm Limited RBC means the Royal Bank of Canada Stroupster means Stroupster Caithness Wind Farm RBS International means the Royal Bank of Scotland Limited International Limited SYND Holdco means SYND Holdco Limited RCF means revolving credit facility Tappaghan means Tappaghan Wind Farm (NI) Limited Red House means Red House wind farm TCFD means Task Force on Climate-Related Financial Red Tile means Red Tile wind farm Disclosures REGO means Renewable Energy Guarantee of Origin Tom nan Clach means Breeze Bidco and Nanclach REMA means Government’s Review of Electricity TSR means Total Shareholder Return Market Arrangements Twentyshilling means Twentyshilling Limited Review Section means the front end review section of this report (including but not limited to the Chairman’s UK means the United Kingdom of Great Britain and Statement, and Investment Manager’s Report) Northern Ireland Rhyl Flats means Rhyl Flats Wind Farm Limited UK Code means the UK Corporate Governance Code issued by the FRC ROC means Renewable Obligation Certificate UREGNI means the Utility Regulator in Northern RPI means the Retail Price Index Ireland Santander means Santander Global Banking and WACI (revenue) means Weighted Average Carbon Markets Intensity calculated per TCFD guidance ni outstanding amount invested i total investee debt+equity i *investee Screggagh means Screggagh Wind Farm Limited scope 1 and 2 GHG emissions i investee revenue i SDG means Sustainable Development Goal WACI (activity) means the metric applies to the same Sixpenny Wood means Sixpenny Wood Wind Farm approach as revenue based WACI, however replaces Limited an asset’s revenue with MWh energy generation and covers only Scope 1 and 2 emissions Slieve Divena means Slieve Divena Wind Farm Limited Walney means Walney Holdco and Walney Wind Farm Slieve Divena 2 means Slieve Divena Wind Farm No. 2 Limited Walney Holdco means Greencoat Walney Holdco Limited SONIA means the Sterling Overnight Index Average Walney Wind Farm means Walney (UK) Offshore South Kyle means South Kyle Wind Farm Limited Windfarms Limited SPVs means the Special Purpose Vehicles which hold Windy Rig means Windy Rig Wind Farm Limited the Group’s investment portfolio of underlying wind farms Yelvertoft means Yelvertoft Wind Farm Limited Stronelairg means Stronelairg Holdco and Stronelairg Wind Farm 126 GREENCOAT^{}[] UK WIND ## Alternative Performance Measures | Performance Measure | Definition | 2023 | 2022 | | --- | --- | --- | --- | | Aggregate Group Debt | The Group's proportionate share of outstanding third party borrowings of £1,790 million per 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 | £2,375 million | £1,780 million | | CO_{2} emissions avoided per annum | The estimate of the portfolio's annual CO_{2} emissions avoided through the displacement of thermal generation, based on the portfolio's estimated generation as at the relevant reporting date | 2.5 million tonnes | 2.0 million tonnes | | GAV | Gross Asset Value | £6,169.0 million | £5,652.7 million | | Homes powered per annum | The estimate of the number of homes powered by electricity generated by the portfolio, based on the portfolio's estimated generation as at the relevant reporting date | 2.3 million homes | 1.8 million homes | | NAV | Net Asset Value | £3,794.0 million | £3,873.2 million | | NAV per share | The Net Asset Value per ordinary share per note 16 to the financial statements | 164.1 pence | 167.1 pence | | Net cash generation | The operating cash flow of the Group and wind farm SPVs as broken down below | £405.5 million | £560.1 million | | Total Shareholder Return | The theoretical return to a shareholder on a 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 | 5.4 per cent | 13.5 per cent | 127 Greencoat UK Wind PLC Annual Report for the year ended 31 December 2023 ## Alternative Performance Measures continued | Group and wind farm SPV cash flows | For the year ended 31 December 2023 £'000 | For the year ended 31 December 2022 £'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 | | Net Cash Generation – Breakdown | For the year ended 31 December 2023 £'000 | For the year ended 31 December 2022 £'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** | | Net Cash Generation – Reconciliation to Net Cash Flows from Operating Activities | For the year ended 31 December 2023 £'000 | For the year ended 31 December 2022 £'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** | 128 ## 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. G R E E N C O A T 129 U K W I N D