LONDON, UK: The Renewables Infrastructure Group Limited (TRIG) has exchanged contracts to acquire a further 11% equity interest in the Merkur offshore wind farm, which is located in the German North Sea.

This incremental investment is approximately 2% of TRIG’s portfolio value. Upon completion TRIG will hold a 36% equity interest in Merkur and the total stake in the Project will represent approximately 6% of TRIG’s portfolio by value.

The stake is being acquired from funds managed by InfraRed. Accordingly, the transaction process included an independent third-party valuation, which supports the transaction price, and approval by TRIG’s independent Board of Directors.

The Project benefits from long-term protected cash flows through its Feed-in Tariff agreement. It also increases the Company’s investments in the attractive German renewables market to 11% of portfolio value. The Project is well aligned with TRIG’s portfolio construction approach of balancing subsidised and unsubsidised revenues and achieving a broad geographical spread across its selected European countries.

The Project comprises 66 GE Haliade-150 6MW offshore wind turbines, and GE Renewable Energy provides Operations & Maintenance (“O&M”) services under a 10-year contract.

The repair and retrofit works associated with the Merkur rear frame defect first reported in June 2021 are substantially complete and operating satisfactorily.

The compensation due under the availability warranty for the year ended 31 March 2022 has been agreed with the turbine and O&M provider, with no financial impact on the carrying value for the Project.

TRIG has also acquired a 100% equity interest in Project Spennymoor, a battery storage development project which will have a total capacity of 100MW / 200MWh when completed, from RES.

Project Spennymoor is situated in County Durham, in close proximity to a high voltage substation connection, and is ideally located to alleviate grid constraints and provide balancing services for the significant industrial cluster in the Humber region, one of six major industrial clusters in the UK.

Project Spennymoor is in the late-stage development phase. RES has secured planning permission, a grid connection offer and land lease options. The project has secured a grid connection enabling commencement of operations in 2031. Work is underway to bring forward the grid connection date if possible.

Construction works will be timed to commence approximately a year before the connection date when finalised. Once operational, Project Spennymoor is expected to represent 2% of TRIG’s portfolio by value. The initial development investment is approximately 10% of the total anticipated investment.

Richard Morse, Chairman of TRIG, said: “We are pleased to be further increasing TRIG’s stake in Merkur, a project we know well. Merkur is one of six offshore wind farms in the TRIG portfolio, and an asset which reinforces our position of investing in attractive renewable energy projects that contribute to energy security and decarbonisation efforts across Europe.”

Richard Crawford, Head of Energy Income Funds, InfraRed Capital Partners, said: “TRIG’s investment in Project Spennymoor deepens our position in the flexible capacity sector, which is going to become increasingly important as renewables penetration increases. Investments in battery storage projects such as these not only complement the renewable generation assets in the portfolio, but also leverage the strong expertise of InfraRed and RES.”