Annual Report
For the year ended 31 December 2021
G R E E N C O A T
U K W I N D
Summary 01
Chairman’s Statement 02
Investment Manager’s Report 05
Strategic Report 21
Board of Directors 34
Report of the Directors 37
Directors’ Remuneration Report 40
Statement of Directors’ Responsibilities 44
Corporate Governance Report 45
Audit Committee Report 50
Independent Auditor’s Report 54
Financial Statements 61
Notes to the Financial Statements 67
Company Information 96
Supplementary Information 97
Defined Terms 98
Alternative Performance Measures 101
Cautionary Statement 102
Contents
G R E E N C O A T
U K W I N D
All capitalised terms are defined in the list of defined terms on pages 98 to 100 unless separately defined.
Summary
Highlights
• The Group’s investments generated 2,933GWh of renewable energy.
• Net cash generation (Group and wind farm SPVs) was £256.8 million.
• Acquisition of the remaining 50 per cent interest in Braes of Doune, investments in Andershaw, Burbo Bank
Extension, Windy Rig and Glen Kyllachy, and the commissioning of Douglas West increased the portfolio to
43 operating wind farm investments and net generating capacity to 1,422MW as at 31 December 2021.
• Issuance of further shares raising £648 million.
• The Company declared total dividends of 7.18 pence per share with respect to the year and is targeting a
dividend of 7.72 pence per share for 2022 (increased in line with December 2021 RPI).
• £950 million outstanding borrowings as at 31 December 2021, equivalent to 23 per cent of GAV.
Key Metrics
As at As at
31 December 2021 31 December 2020
Market capitalisation £3,257.8 million £2,448.0 million
Share price 140.6 pence 134.2 pence
Dividends with respect to the year £148.0 million £118.7 million
Dividends with respect to the year per share 7.18 pence 7.10 pence
GAV £4,043.7 million £3,329.9 million
NAV £3,093.7 million £2,229.9 million
NAV per share 133.5 pence 122.2 pence
NAV movement per share (adjusting for dividends) 11.3 pence 0.7 pence
Total return (NAV) 15.4 per cent 6.5 per cent
TSR 10.7 per cent (6.2) per cent
CO
2
emissions reduced per annum 1.7 million tonnes 1.5 million tonnes
Homes powered per annum 1.5 million homes 1.2 million homes
Funds invested in community projects in the year £3.0 million £3.8 million
Alternative Performance Measures are defined on page 101.
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 £80 billion worth of wind farms
in operation.
• The Group is wholly independent and thus avoids conflicts of interests in its investment decisions.
• The independent Board is actively involved in key investment decisions and in monitoring the efficient
operation of the assets, and works in conjunction with the most experienced investment management team
in the sector.
• Low gearing is important to ensure a high level of cash flow stability and higher tolerance to downside
sensitivities.
• The Group invests in sterling assets and thus does not incur material currency risk.
G R E E N C O A T
U K W I N D
01
I am pleased to present the Annual Report of
Greencoat UK Wind PLC for the year ended
31 December 2021.
Performance
2021 was another significant year of growth for the
Company with £570 million invested and £648 million
of new equity raised.
During the year, portfolio generation was low, 20 per
cent below budget, at 2,933GWh. Power prices were
significantly above budget, primarily reflecting high
gas prices in the second half of the year. Net cash
generated by the Group and wind farm SPVs was
£256.8 million, providing cover of 1.9x on
£138.8 million of dividends paid in the year.
By the end of 2021, the portfolio was generating
sufficient electricity to power 1.5 million homes and
avoiding carbon dioxide emissions of approximately
1.7 million tonnes per annum through the displacement
of thermal generation.
Dividends and Returns
Declared dividends for the year total 7.18 pence per
share, with the fourth and final quarterly dividend of
1.795 pence per share to be paid on 25 February 2022.
With our continuing strong cash flow and robust
dividend cover we can confidently target a dividend of
7.72 pence per share with respect to 2022, increased
in line with December’s RPI of 7.5 per cent.
NAV per share increased from 120.4 pence per share
(ex dividend) on 31 December 2020 to 131.7 pence
per share (ex dividend) on 31 December 2021, an
increase of 11.3 pence (9.4 per cent) during the year,
primarily reflecting high short term power prices. Since
listing, NAV has increased by more than RPI, as can be
seen on the chart on page 16.
The Total Shareholder Return for the year was
10.7 per cent.
Acquisitions
2021 has been an active investment year for us. In
February, we acquired the remaining 50 per cent
shareholding in Braes of Doune wind farm for
£48 million. In September, we acquired Andershaw
wind farm for £121 million and commissioned Douglas
West wind farm (investing a further £25 million during
the year). In November, we invested £250 million in
Burbo Bank Extension wind farm and in December we
acquired Windy Rig and Glen Kyllachy wind farms once
commissioning had been completed for £55 million
and £59 million respectively. During the year, we have
also provided £11 million of construction finance to
Kype Muir Extension wind farm (target commissioning
in Q4 2022).
Douglas West, Windy Rig and Glen Kyllachy are the
Company’s first 3 subsidy free projects and sit
alongside Burbo Bank Extension and Tom nan Clach,
the Company’s 2 CFD projects. The remaining 38 wind
farms are all accredited under the ROC regime. The
Group’s offshore fleet accounts for 33 per cent of
assets by value.
Equity Issuance
In order to finance our continuing growth and pursue
value creating opportunities, we issued 151 million
new shares on 19 February 2021 at a price of
131 pence per share, raising gross proceeds of
£198 million. On 29 November 2021 we issued a
further 341 million new shares at a price of 132 pence
per share, raising gross proceeds of £450 million. Both
equity raises were oversubscribed and priced at a
premium to NAV per share.
Gearing
In November, the Company’s revolving credit facility
was increased to £600 million. £150 million term debt
maturing in 2022 was also refinanced with longer
dated term debt with existing lenders. In December,
we entered into a new £200 million term debt facility
with AXA, which was utilised on 31 January 2022 to
reduce borrowings under the revolving credit facility
to £50 million (£250 million as at 31 December 2021).
Longer term borrowing, now totalling £900 million,
consists of various maturities to 31 January 2030, thus
reducing financing risk. The Group’s gearing of
£950 million as at 31 December 2021 equates to
23 per cent of GAV and the weighted average cost of
borrowing is 2.6 per cent.
Chairman’s Statement
Greencoat UK Wind PLC Annual Report for the year ended 31 December 2021
02
03
G R E E N C O A T
U K W I N D
Gearing continued
The Group will generally avoid using non-recourse
debt at wind farm level and aims to keep overall Group
level borrowings at a prudent level (the maximum is
40 per cent of GAV). Over the medium term we would
expect gearing to be between 20 and 30 per cent
of GAV.
Strategy and Outlook
Wind continues to be the most mature and widely
deployed renewable energy technology in the UK. In
November 2021, the UK hosted the COP26
conference in Glasgow, with the Prime Minister playing
a clear role in encouraging the delivery of 2050 net
zero emissions targets. A key part of that plan for the
UK is a 40GW offshore wind target for 2030.
Our Investment Objective has remained unchanged
over the last 9 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 is
achieved through a focused strategy of investing only
in wind farms and only in the UK and maintaining a
balanced exposure to power prices. Our intention
remains to adhere strictly to this core strategy.
Growth by acquisition brings benefits to shareholders
as:
• a larger scale brings economies and enables
better terms to be obtained from suppliers;
• equity raisings following acquisitions provide
additional opportunity for shareholders to increase
their investment in the Company;
• these equity raisings are priced at a premium to
NAV per share thus enhancing overall NAV per
share for existing shareholders; and
• equity raisings increase the liquidity of shares in
the market (during 2021 on average 14.1 million
of the Company’s shares were traded weekly on
the London Stock Exchange).
Significantly, during 2021 we made £570 million of
investments, of which 30 per cent were in ROC
accredited wind farms, 44 per cent in CFD projects and
26 per cent in subsidy free projects. We expect to
continue to see attractive CFD and subsidy free assets
within our significant acquisition pipeline alongside
wind farms accredited under the ROC regime.
The executive management continues to maintain a
disciplined acquisition strategy: if a potential investment
is not in line with the Company’s investment objectives,
or is otherwise not in the interests of shareholders, then
we will not invest.
Through strong cash flow and robust 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, 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
As a Company investing in wind farms, our strategy
and activities naturally make a positive contribution
toward the worldwide goal of achieving a net zero
carbon emissions economy and limiting global
warming to 1.5°C. We welcome the opportunity to
make appropriate climate related financial disclosures
as recommended by the Task Force on Climate-
Related Financial Disclosures (TCFD) in this year’s
Annual Report, which may be developed further in
future reports. Detailed disclosures can be found in the
Strategic Report on pages 31 to 33.
The Board and Governance
At the AGM, Willy Rickett will retire from the Board
and I, on behalf of the whole Board, would like to thank
him for the fine job he has done as the Company’s
Senior Independent Director since its listing in 2013.
Given his experience, Willy has been a great source of
wisdom and we have valued his contribution
enormously. We were delighted that Nick Winser
joined the board on 1 January 2022, bringing the
experience he has in the regulated electricity sector.
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 45 to 49.
Chairman’s Statement continued
Humber Gateway
Chairman’s Statement continued
Annual General Meeting
Our AGM will take place at 2 pm on 28 April 2022 at
the office of the Investment Manager. In 2021,
following the advice of the government on social
distancing, travel and measures to prohibit public
gathering in order to minimise the spread of
COVID-19, the Company decided to change the
location of its AGM from the offices of the Investment
Manager and hold it with the minimum necessary
quorum of 2 shareholders present. A recording of the
AGM was made and is available for shareholders on
the Company’s website (www.greencoat-ukwind.com).
It is possible that such an arrangement might also be
either necessary or sensible for the AGM at the end of
April 2022. The Company realises that this is not ideal
and will try to provide the opportunity for investors to
meet with the Board and executive management, if
possible, later in the year, if the AGM has to be carried
out in this manner.
Details of the formal business of the meeting are set
out in a separate circular which is sent to shareholders
with the Annual Report.
Shonaid Jemmett-Page
Chairman
23 February 2022
Greencoat UK Wind PLC Annual Report for the year ended 31 December 2021
04
05
G R E E N C O A T
U K W I N D
The Investment Manager
The investment management team’s experience covers wind farm investment, ownership, finance and
operation. All the skills and experience required to manage the Group’s investments lie within a single
investment manager. The Investment Manager is authorised and regulated by the Financial Conduct Authority
and is a full scope UK AIFM.
Since the Company’s listing in March 2013, the investment management team has been led by Stephen Lilley
and Laurence Fumagalli.
Stephen has 25 years of investment management and financing experience in addition to 6 years in the nuclear
industry. Prior to joining the Investment Manager in March 2012, Stephen led the renewable energy infrastructure
team at Climate Change Capital (CCC) from May 2010. Prior to CCC, he was a senior director of Infracapital
Partners LP, M&G’s European Infrastructure fund. During this time, Stephen led the acquisitions of stakes in Kelda
Group (Yorkshire Water), Zephyr (wind farms) and Meter Fit (gas/electricity metering) and also sat on the boards
of these companies after acquisition. Prior to this, he was a director at Financial Security Assurance, where he led
over £2 billion of underwritings in the infrastructure and utility sectors. He also worked for the investment
companies of the Serco and Kvaerner Groups.
Laurence also has 25 years of investment management and financing experience. Prior to joining the Investment
Manager in March 2012, Laurence held a number of senior roles within CCC from 2006 to 2011. Initially he
co-headed CCC’s advisory team before transferring in 2007 to the carbon finance team. Laurence joined Stephen
in the renewable energy infrastructure team in early 2011. From 2003-2006, Laurence headed the Bank of
Tokyo-Mitsubishi’s London-based renewables team, where he financed and advised on over 1GW of UK wind.
Prior to the Bank of Tokyo-Mitsubishi, Laurence worked in the power project finance team at NatWest.
In December, Schroders plc announced that it had reached agreement to acquire a 75 per cent interest in the
Investment Manager. The transaction is expected to complete in H1 2022 subject to regulatory approval. The
Investment Manager will continue to operate as an independent business and will become part of Schroders
Capital, the private markets division of Schroders plc. Schroders plc is a global asset manager and wealth manager,
which delivers a broad range of investments for institutions, intermediaries and high net worth individuals with
AUM of £700 billion.
Investment Manager’s Report
Investment Manager’s Report continued
06
Greencoat UK Wind PLC Annual Report for the year ended 31 December 2021
Investment Portfolio
Operating portfolio as at 31 December 2021:
Total Ownership Net
Wind Farm Turbines Operator PPA MW Stake MW
Andershaw Vestas Statkraft Statkraft 35.0 100% 35.0
Bicker Fen Senvion EDF EDF 26.7 80% 21.3
Bin Mountain GE SSE SSE 9.0 100% 9.0
Bishopthorpe Senvion BayWa Axpo 16.4 100% 16.4
Braes of Doune Vestas BayWa Centrica 72.0 100% 72.0
Brockaghboy Nordex SSE SSE 47.5 100% 47.5
Burbo Bank Extension Vestas Orsted CFD 258.0 15.7% 40.4
Carcant Siemens BayWa Axpo 6.0 100% 6.0
Church Hill Enercon Energia Energia 18.4 100% 18.4
Clyde Siemens SSE SSE 522.4 28.2% 147.3
Corriegarth Enercon BayWa Centrica 69.5 100% 69.5
Cotton Farm Senvion BayWa Sainsbury’s 16.4 100% 16.4
Crighshane Enercon Energia Energia 32.2 100% 32.2
Deeping St. Nicholas Senvion EDF EDF 16.4 80% 13.1
Douglas West Vestas Natural Power Erova 45.0 100% 45.0
Drone Hill Nordex BayWa Statkraft 28.6 51.6% 14.8
Dunmaglass GE SSE SSE 94.0 35.5% 33.4
Earl’s Hall Farm Senvion BayWa Sainsbury’s 10.3 100% 10.3
Glass Moor Senvion EDF EDF 16.4 80% 13.1
Glen Kyllachy Nordex Natural Power Tesco 48.5 100% 48.5
Humber Gateway Vestas RWE RWE 219.0 37.8% 82.8
Kildrummy Enercon BayWa Sainsbury’s 18.4 100% 18.4
Langhope Rig GE Natural Power Centrica 16.0 100% 16.0
Lindhurst Vestas RWE RWE 9.0 49% 4.4
Little Cheyne Court Nordex RWE RWE 59.8 41% 24.5
Maerdy Siemens BayWa Statkraft 24.0 100% 24.0
Middlemoor Vestas RWE RWE 54.0 49% 26.5
North Hoyle Vestas RWE Erova 60.0 100% 60.0
North Rhins Vestas BayWa E.ON 22.0 51.6% 11.4
Red House Senvion EDF EDF 12.3 80% 9.8
Red Tile Senvion EDF EDF 24.6 80% 19.7
Rhyl Flats Siemens RWE RWE 90.0 24.95% 22.5
Screggagh Nordex SSE Energia 20.0 100% 20.0
Sixpenny Wood Senvion BayWa Statkraft 20.5 51.6% 10.6
Slieve Divena Nordex SSE SSE 30.0 100% 30.0
Slieve Divena II Enercon SSE SSE 18.8 100% 18.8
Stronelairg Vestas SSE SSE 227.7 35.5% 80.9
Stroupster Enercon BayWa BT 29.9 100% 29.9
Tappaghan GE SSE SSE 28.5 100% 28.5
Tom nan Clach Vestas Natural Power CFD 40.0 75% 30.0
Walney Siemens Orsted Total 367.2 25.1% 92.2
Windy Rig Vestas Statkraft Statkraft 43.2 100% 43.2
Yelvertoft Senvion BayWa Statkraft 16.4 51.6% 8.5
Total 1,422.0
07
G R E E N C O A T
U K W I N D
Investment Manager’s Report continued
Investment Portfolio continued
1 Andershaw
2 Bicker Fen
3 Bin Mountain
4 Bishopthorpe
5 Braes of Doune
6 Brockaghboy
7 Burbo Bank Extension
8 Carcant
9 Church Hill
10 Clyde
11 Corriegarth
12 Cotton Farm
13 Crighshane
14 Douglas West
15 Deeping St. Nicholas
16 Drone Hill
17 Dunmaglass
18 Earl’s Hall Farm
19 Glass Moor
20 Glen Kyllachy
21 Humber Gateway
22 Kildrummy
23 Langhope Rig
24 Lindhurst
25 Little Cheyne Court
26 Maerdy
27 Middlemoor
28 North Hoyle
29 North Rhins
30 Red House
31 Red Tile
32 Rhyl Flats
33 Screggagh
34 Sixpenny Wood
35 Slieve Divena
36 Slieve Divena II
37 Stronelairg
38 Stroupster
39 Tappaghan
40 Tom nan Clach
41 Walney
42 Windy Rig
43 Yelvertoft
24
27
8
5
12
18
25
2
15
19
30
31
35
3
22
11
26
7
40
16
29
34
43
38
33
23
4
39
9
13
6
20
37
36
41
21
32
28
42
17
14
1
10
Investment Manager’s Report continued
08
Greencoat UK Wind PLC Annual Report for the year ended 31 December 2021
Investment Portfolio continued
Breakdown of operating portfolio by value as at 31 December 2021:
Onshore/Offshore Geography
Asset Age Turbine Manufacturer
Assets
Humber Gateway (13%)
Walney (10%)
Burbo Bank Extension (6%)
Brockaghboy (4%)
Dunmaglass (3%)
Other (34%)
Clyde (10%)
Stronelairg (8%)
Corriegarth (5%)
Tom nan Clach (4%)
Braes of Doune (3%)
< 5 years (40%)
> 10 years (24%)
5-10 years (36%)
Vestas (44%)
Siemens (23%)
Enercon (12%)
Nordex (9%)
Senvion (6%)
GE (6%)
Onshore (67%)
Offshore (33%)
Scotland (46%)
England (38%)
Northern Ireland (11%)
Wales (5%)
09
G R E E N C O A T
U K W I N D
Portfolio Performance
Portfolio generation for the year was 2,933GWh, 20 per cent below budget.
The following table shows wind speed and portfolio generation relative to budget since listing:
UK weighted average wind speed Generation
(variation to long term mean) (variation to budget)
2013 (adjusted) +3% +8%
2014 -2% -3%
2015 +5% +8%
2016 -6% -6%
2017 -1% 0%
2018 -4% -6%
2019 -8% -11%
2020 +2% -3%
2021 -12% -20%
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).
2021 saw very low wind speeds of 2 standard deviations below the mean. Similar conditions were last seen
in 2010.
Investment Manager’s Report continued
Burbo Bank Extension
Investment Manager’s Report continued
10
Greencoat UK Wind PLC Annual Report for the year ended 31 December 2021
Portfolio Performance continued
The following table provides a breakdown of generation by wind farm:
Annual 2021 2021
Ownership Ownership Budget Budget Actual
Wind Farm Stake Period (GWh) (GWh) (GWh) Variance
Andershaw 100% Oct – Dec 105.5 31.6 26.3
(2)
-17%
Bicker Fen 80% Jan – Dec 44.3 44.3 39.3 -11%
Bin Mountain 100% Jan – Dec 23.2 23.2 17.8 -23%
Bishopthorpe 100% Jan – Dec 50.6 50.6 43.1 -15%
Braes of Doune 100%
(1)
Jan – Dec 167.8 151.0 118.9
(2)
-21%
Brockaghboy 100% Jan – Dec 156.0 140.4
(3)
109.0 -22%
Burbo Bank Extension 15.7% Dec 155.0 15.5 14.4 -7%
Carcant 100% Jan – Dec 17.1 17.1 14.5 -15%
Church Hill 100% Jan – Dec 37.1 37.1 29.8 -20%
Clyde 28.2% Jan – Dec 446.9 446.9 342.4
(2)
-23%
Corriegarth 100% Jan – Dec 216.2 216.2 150.3
(2)
-30%
Cotton Farm 100% Jan – Dec 51.0 51.0 43.1 -16%
Crighshane 100% Jan – Dec 59.7 59.7 49.2 -18%
Deeping St. Nicholas 80% Jan – Dec 29.6 29.6 26.6 -10%
Douglas West 100% Oct – Dec 129.2 38.8 33.9 -12%
Drone Hill 51.6% Jan – Dec 30.3 30.3 25.4 -16%
Dunmaglass 35.5% Jan – Dec 129.9 129.9 92.0
(2)
-29%
Earl’s Hall Farm 100% Jan – Dec 31.9 31.9 27.9 -12%
Glass Moor 80% Jan – Dec 28.8 28.8 24.1 -16%
Glen Kyllachy 100% n/a 145.7 ———
Humber Gateway 37.8% Jan – Dec 320.4 320.4 281.5 -12%
Kildrummy 100% Jan – Dec 55.6 55.6 40.6 -27%
Langhope Rig 100% Jan – Dec 46.7 46.7 39.1 -16%
Lindhurst 49% Jan – Dec 11.5 11.5 9.6 -16%
Little Cheyne Court 41% Jan – Dec 61.0 61.0 51.1 -16%
Maerdy 100% Jan – Dec 63.1 63.1 50.1 -21%
Middlemoor 49% Jan – Dec 68.3 68.3 51.9 -24%
North Hoyle 100% Jan – Dec 185.8 172.0
(4)
135.3 -21%
North Rhins 51.6% Jan – Dec 37.8 37.8 33.4
(2)
-12%
Red House 80% Jan – Dec 21.8 21.8 19.8 -9%
Red Tile 80% Jan – Dec 42.0 42.0 37.3 -11%
Rhyl Flats 24.95% Jan – Dec 70.3 70.3 62.8 -11%
Screggagh 100% Jan – Dec 44.3 44.3 35.6 -20%
Sixpenny Wood 51.6% Jan – Dec 28.5 28.5 22.3 -22%
Slieve Divena 100% Jan – Dec 54.9 54.9 42.4 -23%
Slieve Divena II 100% Jan – Dec 48.7 48.7 41.9 -14%
Stronelairg 35.5% Jan – Dec 302.6 302.6 226.7
(2)
-25%
Stroupster 100% Jan – Dec 94.9 94.9 75.1 -21%
Tappaghan 100% Jan – Dec 68.0 68.0 53.2 -22%
Tom nan Clach 75% Jan – Dec 121.8 121.8 103.1
(2)
-15%
Walney 25.1% Jan – Dec 355.6 355.6 274.8 -23%
Windy Rig 100% n/a 138.5 ———
Yelvertoft 51.6% Jan – Dec 21.7 21.7 17.1 -21%
Total 4,319.3 3,685.2 2,932.6 -20%
(1)
Ownership in Braes of Doune was 50 per cent until incremental acquisition of the remaining 50 per cent in February 2021.
(2)
Includes curtailed generation.
(3)
Brockaghboy 2021 budget reduced to reflect a scheduled grid outage.
(4)
North Hoyle 2021 budget reduced to reflect a scheduled grid outage and planned downtime for insulator exchanges.
Portfolio Performance continued
Notable issues affecting portfolio availability were:
• a scheduled grid outage at Brockaghboy to connect a nearby substation meaning that the wind farm was
offline for the whole of November;
• a scheduled grid outage at North Hoyle in April and May, planned downtime for insulator exchanges in
March and an export cable fault in July;
• various unplanned outages at Corriegarth and Kildrummy, with extended periods of downtime due to adverse
weather conditions and a shortage of operation and maintenance personnel;
• a shortage of operation and maintenance personnel at Dunmaglass, which delayed the resolution of certain
turbine faults; and
• an inter-turbine array cable fault at Stronelairg in September and remedial blade works in September
and October.
In general, we have reflected an increased allowance for grid outages when budgeting wind farm availability.
Grid outages are typically uncompensated and result in a whole wind farm being offline. The increased occurrence
in part relates to grid enhancement works to accommodate the further deployment of wind generation.
We have also reflected an increased allowance for curtailment in Northern Ireland. In contrast to curtailment
under the Balancing Mechanism in Great Britain, curtailment in Northern Ireland is uncompensated. The higher
rate of curtailment in part relates to the greater deployment of wind generation.
During the year, BayWa acquired part of the operational management business of DNV-GL, which included
Operational Management Agreements at Braes of Doune, Carcant, Maerdy and North Rhins. BayWa now
operates 13 sites in the Group’s portfolio.
New PPAs have been entered into with: (i) Erova at Braes of Doune (from July 2022, power only), Douglas West
(power only) and North Hoyle (power only); (ii) Total at Braes of Doune (from July 2022, ROCs only), Carcant
(ROCs only), North Hoyle (ROCs only) and Walney; and (iii) Tesco at Glen Kyllachy.
Health and Safety
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 from across the
industry are shared.
During the year, routine health and safety audits were conducted across 11 sites by an independent consultant.
In addition, the Investment Manager undertook 38 safety walks. No material areas of concern were identified
from all audits and safety walks performed in the year.
11
G R E E N C O A T
U K W I N D
Investment Manager’s Report continued
Investment Manager’s Report continued
12
Greencoat UK Wind PLC Annual Report for the year ended 31 December 2021
Acquisitions
During the year, the Investment Manager priced 20 wind farms totalling 1,286MW. Of the 20 wind farms priced,
3 investments were made by the Group (Braes of Doune, Andershaw and Burbo Bank Extension), 2 were acquired
by other buyers, 8 are no longer being pursued by the Group, and 7 are subject to continuing discussions. In total,
there were 9 relevant secondary market transactions in the UK wind sector in 2021.
The following table lists investments in the year to 31 December 2021:
£m
Douglas West 25.3
Kype Muir Extension 10.6
Braes of Doune 48.1
Andershaw 121.2
Burbo Bank Extension 250.0
Windy Rig 55.1
Glen Kyllachy 59.5
Total 569.8
During the year, the Group funded incremental investment of £25.3 million in the 45MW Douglas West subsidy
free wind farm project, which entered into full commercial operation in September 2021.
During the year, the Group also provided £10.6 million of construction finance to the Kype Muir Extension
subsidy free wind farm project (target commissioning in Q4 2022).
On 23 February 2021, the Group acquired the remaining 50 per cent interest in Braes of Doune wind farm from
Hermes for £48.1 million. The Group has been invested in this wind farm since listing and the wind farm receives
1 ROC per MWh.
On 27 September 2021, the Group acquired the 35MW Andershaw wind farm from Statkraft for £121.2 million.
The wind farm receives 0.9 ROCs per MWh.
On 30 November 2021, the Group acquired a net 15.7 per cent stake in the 258MW Burbo Bank Extension
offshore wind farm from AIP for £250 million. The wind farm benefits from a CFD priced at £176.57/MWh
(real 2021).
On 14 December 2021, the Group acquired the 43.2MW Windy Rig subsidy free wind farm from Statkraft for
£55.1 million and on 22 December 2021, the Group acquired the 48.5MW Glen Kyllachy subsidy free wind farm
from RWE for £59.5 million.
The acquisition of the 37.8MW Twentyshilling subsidy free wind farm from Statkraft for £51.4 million is expected
to complete in March 2022.
The agreements to acquire Windy Rig, Glen Kyllachy and Twentyshilling were all entered into in 2019.
Equity Issuance
On 19 February 2021, the Company issued 151 million new shares at a price of 131 pence per share, raising gross
proceeds of £198 million. On 29 November, the Company issued a further 341 million new shares at a price of
132 pence per share, raising gross proceeds of £450 million.
13
G R E E N C O A T
U K W I N D
Gearing
In November, the Company’s revolving credit facility was increased to £600 million. Term debt maturing in 2022
was also refinanced with longer dated term debt. In December, the Company entered into a new £200 million
term debt facility with AXA, which was utilised on 31 January 2022 to reduce borrowings under the revolving
credit facility to £50 million (£250 million as at 31 December 2021).
The Group’s gearing of £950 million as at 31 December 2021 equates to 23 per cent of GAV (limit 40 per cent).
All borrowing is at Company level (no debt at wind farm level). More detail in relation to the Group’s debt
facilities can be found in note 13 to the financial statements.
Financial Performance
Power prices during the year were well above budget, primarily reflecting high gas prices. The average N2EX
Day Ahead auction price was £117.43/MWh (2020: £35.23/MWh).
Net cash generated by the Group and wind farm SPVs was £256.8 million, providing cover of 1.9x dividends paid
during the year, with low generation being more than offset by high power prices.
Cash balances (Group and wind farm SPVs) increased by £23.3 million to £117.1 million over the year.
Investment Manager’s Report continued
Douglas West
Investment Manager’s Report continued
14
Greencoat UK Wind PLC Annual Report for the year ended 31 December 2021
Financial Performance continu ed
For the year ended
31 December 2021
Group and wind farm SPV cash flows £’000
Net cash generation
(1)
256,764
Dividends paid (138,786)
Acquisitions
(2)
(569,783)
Acquisition costs
(3)
(6,263)
Equity issuance 647,618
Equity issuance costs (9,715)
Net repayment under debt facilities (150,000)
Upfront finance costs (6,556)
Movement in cash (Group and wind farm SPVs) 23,279
Opening cash balance (Group and wind farm SPVs) 93,820
Closing cash balance (Group and wind farm SPVs) 117,099
Net cash generation 256,764
Dividends 138,786
Dividend cover 1.9x
(1)
Alternative Performance Measure as defined on page 101.
(2)
Includes £2,665k capital expenditure at Windy Rig and £1,160k working capital at Glen Kyllachy.
(3)
Includes £4,403k in relation to Humber Gateway, acquired in 2020.
The following 2 tables provide further detail in relation to net cash generation of £256.8 million:
For the year ended
31 December 2021
Net Cash Generation – Breakdown £’000
Revenue 457,933
Operating expenses (150,892)
Tax (30,445)
Other 23,489
Wind farm cash flow 300,085
Management fee (20,820)
Operating expenses (1,518)
Ongoing finance costs (24,420)
Other (641)
Group cash flow (47,399)
VAT (Group and wind farm SPVs) 4,078
Net cash generation 256,764
For the year ended
31 December 2021
Net Cash Generation – Reconciliation to Net Cash Flows from Operating Activities £’000
Net cash flows from operating activities
(1)
242,261
Movement in cash balances of wind farm SPVs
(2)
26,366
Capital expenditure at Windy Rig and working capital at Glen Kyllachy
(2)
3,826
Repayment of shareholder loan investment
(1)
8,731
Finance costs
(1)
(30,976)
Upfront finance costs
(3)
6,556
Net cash generation 256,764
(1)
Consolidated Statement of Cash Flows.
(2)
Note 9 to the financial statements.
(3)
£6,375k facility arrangement fees plus £138k professional fees (note 13 to the financial statements) plus £43k movement in finance costs
payable (note 12 to the financial statements).
15
G R E E N C O A T
U K W I N D
Investment Performance
£’m
NAV at 31 December 2020 2,229.9
Investment 569.8
Movement in portfolio valuation 116.6
Movement in cash (Group and wind farm SPVs) 23.3
Movement in other relevant assets/liabilities 4.1
Movement in Aggregate Group Debt 150.0
NAV at 31 December 2021 3,093.7
The increase in the portfolio valuation of £116.6 million equates to approximately 5 pence per share, which can
be further broken down as follows: +14 pence from an increase in forecast power prices, +2 pence from an
increase in inflation assumptions, -5 pence from an increase in the corporation tax rate (25 per cent modelled from
2023 onwards), and -6 pence attributable to depreciation and other assumption changes.
Total dividends of £138.8 million were paid in 2021. Total dividends of £148.0 million have been paid or declared
with respect to 2021 (7.18 pence per share). The target dividend with respect to 2022 is 7.72 pence per share
(increased in line with December 2021 RPI).
NAV at
31 December
2020
Investment
Movement in
portfolio
valuation
Movement in
cash (Group and
wind farm SPVs)
Movement in
other relevant
assets/liabilities
Movement in
Aggregate
Group Debt
NAV at
31 December
2021
Shares in issue
2,317,097,822
NAV/share (pence)
133.5
£m
1,824,129,348
122.2
0.0
500.0
1,000.0
1,500.0
2,000.0
2,500.0
3,000.0
3,500.0
Investment Manager’s Report continued
Investment Performance continued
pence per share per cent
NAV at 31 December 2020 122.2
Less February 2021 dividend (1.8)
NAV at 31 December 2020 (ex dividend) 120.4
NAV at 31 December 2021 133.5
Less February 2022 dividend (1.8)
NAV at 31 December 2021 (ex dividend) 131.7
Movement in NAV (ex dividend) 11.3 9.4
Dividends with respect to the year 7.2 6.0
Total return on NAV 18.5 15.4
The chart below shows NAV per share versus RPI:
NAV vs RPI
The chart below shows TSR versus market peers:
Total Shareholder Return vs Market Peers (Bloomberg)
Greencoat UK Wind
Bluefield Solar
Income Fund
The Renewables
Infrastructure Group
Foresight Solar Fund
John Laing Environmental
Assets Group
Next Energy
Solar Fund
90
110
130
150
170
190
210
230
%
Dec
2020
Dec
2013
Dec
2014
Dec
2015
Dec
2016
Dec
2017
Dec
2018
Dec
2019
Dec
2021
RPI (rebased to 98)
NAV per share (ex dividend)
136
132
128
124
120
116
112
108
104
100
96
Dec
2013
Dec
2014
Dec
2015
Dec
2017
Dec
2016
Pence
Dec
2018
Dec
2019
Dec
2020
Dec
2021
Investment Manager’s Report continued
16
Greencoat UK Wind PLC Annual Report for the year ended 31 December 2021
17
G R E E N C O A T
U K W I N D
Reconciliation of Statutory Net Assets to Reported NAV
As at As at
31 December 2021 31 December 2020
£’000 £’000
Operating portfolio 3,919,545 3,216,563
Construction portfolio 10,702 27,273
Cash (wind farm SPVs) 112,298 85,932
Fair value of investments 4,042,545 3,329,768
Cash (Group) 4,801 7,888
Other relevant liabilities (3,647) (7,783)
GAV 4,043,699 3,329,873
Aggregate Group Debt (950,000) (1,100,000)
NAV 3,093,699 2,229,873
Reconciling items ——
Statutory net assets 3,093,699 2,229,873
Shares in issue 2,317,097,822 1,824,129,348
NAV per share (pence) 133.5 122.2
Investment Manager’s Report continued
Lightning protection system, Douglas West blade
NAV Sensitivities
NAV is equal to GAV less Aggregate Group Debt.
GAV is the sum of:
• DCF valuations of the Group’s investments;
• cash (at Group and wind farm SPV level); and
• other relevant assets and liabilities of the Group.
The DCF valuation of the Group’s investments represents the largest component of GAV and the key sensitivities
are considered to be the discount rate used in the DCF valuation and assumptions in relation to inflation, energy
yield, power price and asset life.
The base case discount rate is a blend of a lower discount rate for fixed cash flows and a higher discount rate for
merchant cash flows. The blended portfolio discount rate as at 31 December 2021 was 7.2 per cent (31 December
2020: 6.9 per cent), reflecting a greater proportion of merchant cash flows.
As there is no debt at wind farm level, the DCF valuation is produced by discounting the individual wind farm cash
flows on an unlevered basis. The equivalent levered discount rate would be approximately 2 per cent higher than
the unlevered discount rate.
Base case long term inflation assumptions are 3.5 per cent to 2030 and 2.5 per cent thereafter for RPI and 2.5 per
cent (all years) for CPI.
Base case energy yield assumptions are P50 (50 per cent probability of exceedance) forecasts based on long
term wind data and operational history. The P90 (90 per cent probability of exceedance over a 10 year period)
and P10 (10 per cent probability of exceedance over a 10 year period) sensitivities reflect the future variability of
wind and the uncertainty associated with the long term data source being representative of the long term mean.
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 4 January 2022 with an appropriate discount
applied reflecting the higher volatility associated with short term prices.
The following chart shows the base case power price profile (before any PPA discounts):
0
20
40
60
80
100
120
2022
2023
2024
2025
2026
2027
2028
2029
2030
2031
2032
2033
2034
2035
2036
2037
2038
2039
2040
2041
2042
2043
2044
2045
2046
2047
2048
2049
2050
£/MWh (real)
Investment Manager’s Report continued
Greencoat UK Wind PLC Annual Report for the year ended 31 December 2021
18
G R E E N C O A T
U K W I N D
Investment Manager’s Report continued
19
NAV Sensitivities continued
In 2022, fixed cash flows are forecast to contribute 39 per cent of total cash flows (61 per cent merchant). Over
the life of the portfolio, fixed cash flows are forecast to contribute 54 per cent of the total DCF value (46 per cent
merchant).
The following chart shows the forecast portfolio cash flow split by revenue type:
Portfolio cashflow split by revenue type
The power price sensitivity below assumes a 10 per cent increase or decrease in power prices relative to this
base case forecast for every year of the asset life.
The base case asset life is 30 years.
The following chart shows the impact of the key sensitivities on NAV:
Impact on NAV
-20p -15p -10p -5p 0p 5p 10p 15p 20p
Asset life (-/+ 5 years)
Power price (-/+ 10%)
Energy yield (10 year P90/P10)
Inflation rate (-/+ 0.5%)
Discount rate (+/- 0.5%)
pence per share
600
500
400
300
200
100
0
£m
2022
2023
2024
2025
2026
2027
2028
2029
2030
2031
2032
2033
2034
2025
2036
2037
2038
2039
2040
2041
2042
2043
2044
2045
2046
2047
2048
2049
2050
2051
2052
Fixed Merchant
Outlook
There are currently over 25GW of operating UK wind farms (14GW onshore plus 11GW offshore). In monetary
terms, the secondary market for operating UK wind farms is over £80 billion. The Group currently has a market
share of approximately 5 per cent. As at 31 December 2021, the average age of the portfolio was 7 years (versus
5 years at listing in March 2013).
In November 2021, the UK hosted the COP26 conference in Glasgow, with the Prime Minister playing a clear role
in encouraging the delivery of 2050 net zero emissions targets. A key part of that plan for the UK is a 40GW
offshore wind target for 2030, supported by the CFD regime. New build onshore wind and solar are also expected
to contribute, both on a subsidy free basis and supported by the CFD regime.
It is anticipated that the Group will continue to invest in ROC wind farms, with CFD wind farms and subsidy free
wind farms continuing to provide further diversified pipeline opportunities. At all times, the Group will maintain
a balanced portfolio, in line with the Company’s Investment Objective.
Power prices during the year were well above budget, primarily reflecting high gas prices driven by the recovery
in global demand and certain supply chain constraints associated with the recovery from the COVID-19 pandemic.
The average N2EX Day Ahead auction price was £117.43/MWh (2020: £35.23/MWh). Forward power prices over
the period 2022-2025 remain high. High power prices drove strong cash generation in 2021 and the Group should
continue to benefit from strong cash generation over the next few years through its balanced exposure to
power prices.
In general, the outlook for the Group is very encouraging, with proven operational and financial performance
from the existing portfolio, combined with a healthy pipeline of attractive further investment opportunities.
Tappaghan
20
Greencoat UK Wind PLC Annual Report for the year ended 31 December 2021
Investment Manager’s Report continued
Introduction
The Directors present their Strategic Report for the
year ended 31 December 2021. Details of the Directors
who held office during the year and as at the date of
this report are given on pages 34 to 36.
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 8 per cent to 9 per cent. The 2021
dividend of 7.18 pence per annum is targeted to
increase in line with December 2021 RPI to 7.72 pence
for 2022. 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.
As the Group has no borrowings at wind farm level,
and only limited borrowing at the Group level, 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 has used debt facilities to make additional
investments in the year. This has enhanced the Group’s
attractiveness to sellers since execution risk is greatly
diminished, with the Group effectively being a cash
buyer. The Group will continue to use short term debt
facilities to make further investments.
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 Group invests in both onshore and offshore wind
farms with the amount invested in offshore wind farms
being capped at 40 per cent of GAV at acquisition.
The Board believes that there is a significant market in
which the Group can continue to grow over the next
few years.
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 Greencoat Capital 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. 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 of course that it
is in the interests of shareholders to do so.
Review of Business and Future Outlook
A detailed discussion of individual asset performance
and a review of the business in the year together with
future outlook are covered in the Investment
Manager’s Report on pages 5 to 20.
Key Performance Indicators
The Board believes that the key metrics detailed on
page 1, which are typical for investment entities, will
provide shareholders with sufficient information to
assess how effectively the Group is meeting
its objectives.
Ongoing Charges
The ongoing charges ratio of the Company is 0.98 per
cent of the weighted average NAV for the year to
31 December 2021. This is made up as follows and has
been calculated using the AIC recommended
methodology.
31 December 2021 31 December 2020
£’000 % £’000 %
Total management fee 23,406 0.92% 18,400 0.96%
Directors’ fees
(1)
270 0.01% 258 0.01%
Other ongoing expenses
(2)
1,359 0.05% 1,214 0.06%
Total 25,035 0.98% 19,872 1.03%
Weighted average NAV 2,550,739 1,925,549
(1)
Do not include £50k of additional discretionary Directors’ fees for
work incurred in connection with share placings.
(2)
Other ongoing expenses do not include £1,115k of management
and administration fees relating to the wind farm SPVs that is
recharged to them and £58k of broken deal costs.
G R E E N C O A T
U K W I N D
Strategic Report
21
Ongoing Charges continued
Assuming no further changes in NAV, the 2022
ongoing charges ratio is expected to be 0.96 per cent.
The Investment Manager is not paid any performance
or acquisition fees.
Employees and Officers of the Company
The Company does not have any employees and
therefore employee policies are not required. The
Directors of the Company are listed on pages 34 to 36.
Principal Risks and Uncertainties
In the normal course of business, each investee
company has a rigorous risk management framework
with a comprehensive risk register that is reviewed and
updated regularly and approved by its board. The
principal risks identified by the Board to the
performance of the Group are detailed below. The
Board does not consider the likelihood or impact of
these risks to have changed in the year.
The Board maintains a risk matrix setting out the risks
affecting both the Group and the investee companies.
This risk matrix is reviewed and updated at least
annually to ensure that procedures are in place to
identify principal risks and to mitigate and minimise the
impact of those risks should they crystallise. This risk
matrix is also reviewed and updated to identify
emerging risks, such as climate related risks, and to
determine whether any actions are required. This
enables the Board to carry out a robust assessment of
the risks facing the Group, including those risks that
would threaten its business model, future
performance, solvency or liquidity.
The risk appetite of the Group is considered in light of
the principal risks and their alignment with the
Company’s Investment Objective. The Board considers
the risk appetite of the Group and the Company’s
adherence to the Investment Policy in the context of
the regulatory environment taking into account, inter
alia, gearing and financing risk, wind resource risk, the
level of exposure to power prices and environmental
and health and safety risks.
As it is not possible to eliminate risks completely, the
purpose of the Group’s risk management policies and
procedures is not to eliminate risks, but to reduce them
and to ensure that the Group is adequately prepared
to respond to such risks and to minimise any impact if
the risk materialises.
The spread of assets within the portfolio ensures that
the portfolio benefits from a diversified wind resource
and spreads the exposure to a number of potential
technical risks associated with grid connections and
with local distribution and national transmission
networks. In addition, the portfolio includes 6 different
turbine manufacturers, which diversifies technology
and maintenance risks. Finally, each site contains a
number of individual turbines, the performance of
which is largely independent of other turbines.
Risks Affecting the Group
Investment Manager
The ability of the Group to achieve the Company’s
Investment Objective depends heavily on the
experience of the management team within the
Investment Manager and more generally on the
Investment Manager’s ability to attract and retain
suitable staff. The sustained growth of the Group
depends upon the ability of the Investment Manager
to identify, select and execute further investments
which offer the potential for satisfactory returns.
Financing Risk
The Investment Management Agreement includes key
man provisions which would require the Investment
Manager to employ alternative staff with similar
experience relating to investment, ownership,
financing and management of wind farms should for
any reason any key man cease to be employed by the
Investment Manager. The Investment Management
Agreement ensures that no investments are made
following the loss of key men until suitable
replacements are found and there are provisions for a
reduction in the investment management fee during
the loss period. It also outlines the process for their
replacement with the Board’s approval. In addition, the
key men are shareholders in the Company.
The Group will finance further investments either by
borrowing or by issuing further shares. The ability of
the Group to deliver expected real NAV growth is
dependent on access to debt facilities and equity
capital markets. There can be no assurance that the
Group will be able to borrow additional amounts or
refinance on reasonable terms or that there will be a
market for further raising of equity.
Strategic Report continued
22
Greencoat UK Wind PLC Annual Report for the year ended 31 December 2021
23
G R E E N C O A T
U K W I N D
Strategic Report continued
Investment Returns Become Unattractive
A significantly strengthening economy may lead to
higher future interest rates which could make the listed
infrastructure asset class relatively less attractive to
investors. In such circumstances, it is likely that there
will be an increase in inflation (to which the revenues
and costs of the investee companies are either indexed
or significantly correlated) or an increase in power
prices (due to greater consumption of power) or both.
Both would increase the investment return and thus
would provide a degree of mitigation against higher
future interest rates.
Risks Affecting Investee Companies
Regulation
If a change in Government renewable energy policy
were applied retrospectively to current operating
projects including those in the Group’s portfolio, this
could adversely impact the market price for renewable
energy or the value of the green benefits earned from
generating renewable energy. The Government has
evolved the regulatory framework for new projects
being developed but has consistently stood behind
the framework that supports operating projects as
it understands the need to ensure investors can
trust regulation.
Electricity Prices
Other things being equal, a decline in the market
price of electricity would reduce the investee
companies’ revenues.
The Group’s dividend policy has been designed to
withstand significant short term variability in power
prices. A longer period of power price decline would
materially affect the revenues of investee companies.
Wind Resource
The investee companies’ revenues are dependent
upon wind conditions, which will vary across seasons
and years within statistical parameters. The standard
deviation of energy production is 10 per cent over a
12 month period (less than 2 per cent over 30 years).
Since long term variability is low, there is no significant
diversification benefit to be gained from geographical
diversification across weather systems.
The Group does not have any control over the wind
resource but has no debt at wind farm level and has
designed its dividend policy such that it can withstand
significant short term variability in production relating
to wind. Before investment, the Group carries out
extensive due diligence and relevant historical wind
data is available over a substantial period of time.
The other component of wind energy generation, a
wind farm’s ability to turn wind into electricity, is
mitigated by purchasing wind farms, where possible,
with a proven operating track record.
When acquiring wind farms that have only recently
entered into operation, only limited operational data is
available. In these instances, the acquisition
agreements with the vendors of these wind farms will
include a ‘‘wind energy true-up’’ or an appropriate
discount to the purchase price.
Asset Life
In the event that the wind turbines do not operate for
the period of time assumed by the Group or require
higher than expected maintenance expenditure to do
so, it could have a material adverse effect on
investment returns.
The Group performs regular reviews and ensures that
maintenance is performed on all wind turbines across
the wind farm portfolio. Regular maintenance ensures
the wind turbines are in good working order, consistent
with their expected life-spans.
Kildrummy
Risks Affecting Investee Companies continued
Health and Safety and the Environment
The physical location, operation and maintenance of
wind farms may, if inadequately assessed and
managed, pose health and safety risks to those
involved. Inappropriate wind farm operation and
maintenance may result in bodily injury, particularly if
an individual were to fall from height, fall or be crushed
in transit from a vessel to an offshore installation or be
electrocuted. If an accident were to occur in relation
to one or more of the Group’s investments and if the
Group were deemed to be at fault, the Group could
be liable for damages or compensation to the extent
such loss is not covered by insurance policies. In
addition, adverse publicity or reputational damage
could follow.
The Board reviews health and safety at each of its
scheduled Board meetings and Martin McAdam serves
as the appointed Health and Safety Director. The
Group also engages an independent health and safety
consultant to ensure the ongoing appropriateness of
its health and safety policies.
The investee companies comply with all regulatory and
planning conditions relating to the environment,
including in relation to noise emissions, habitat
management and waste disposal.
Going Concern
As further detailed in note 1 to the financial statements
on page 67, the Directors have a reasonable
expectation that the Company and the Group have
adequate resources to continue in operational
existence to at least February 2023. Accordingly, they
continue to adopt the going concern basis in preparing
the financial statements.
Longer Term Viability
As further disclosed on page 45, the Company is a
member of the AIC and complies with the AIC Code.
In accordance with the AIC Code, the Directors are
required to assess the prospects of the Group over a
period longer than the 12 months associated with
going concern. The Directors conducted this review for
a period of 10 years, which is deemed appropriate,
given the long term nature of the Group’s investments
which are modelled over 30 years, coupled with its
long term strategic planning horizon.
In considering the prospects of the Group, the
Directors looked at the key risks facing both the Group
and the investee companies as detailed on pages 22
to 24, focusing on the likelihood and impact of each
risk as well as any key contracts, future events or
timescales that may be assigned to each key risk. The
Directors also tested and are comfortable that the
Company would continue to remain viable under
several robust downside scenarios, including loss of
government subsidies and a significant decline in long
term power price forecasts, both considered principal
risks and uncertainties affecting investee companies.
As a sector-focused infrastructure fund, the Group aims
to produce stable and inflating dividends while
preserving the capital value of its investment portfolio
on a real basis. The Directors believe that the Group is
well placed to manage its business risks successfully
over both the short and long term and accordingly, the
Board has a reasonable expectation that the Group will
be able to continue in operation and to meet its
liabilities as they fall due for a period of at least
10 years.
The Board does not believe that the lower power
prices projected in the High Transition Risk Scenario,
as discussed on page 31, will diminish the longer term
viability of the Company.
While the Directors have no reason to believe that the
Group will not be viable over a longer period, they are
of the opinion that it would be difficult to foresee the
economic viability of any company with any degree of
certainty for a period of time greater than 10 years.
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.
Greencoat UK Wind PLC Annual Report for the year ended 31 December 2021
24
Strategic Report continued
G R E E N C O A T
U K W I N D
25
Strategic Report continued
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 48 to 49. The
Company’s engagement with its key stakeholders,
including the Investment Manager, is discussed further
in the Corporate Governance Report. The key
decisions detailed 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.
Dividends
The Board has approved total dividends of 7.18 pence
per share with respect to the year and shareholders
voted 99.97 per cent in favour to approve the
Company’s dividend policy at the AGM on 28 April
2021. The Board are confident that with the Group’s
continuing strong cash flow and robust dividend cover,
the Company can target a dividend of 7.72 pence per
share for 2022, which the Board expect to contribute
to the Company’s target return to investors of an IRR of
8 per cent to 9 per cent, net of fees and expenses.
Acquisitions
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.
Share Issues
During the year, the Company issued 492 million
further shares, raising a total of £648 million through
oversubscribed equity raisings in February and
November. The Investment Manager engaged with
analysts and investors throughout the equity
raising process.
Board Composition
Nick Winser was appointed as a non-executive Director
of the Company with effect from 1 January 2022. Nick
is also a member of the Company’s Audit, Management
Engagement and Nominations Committees.
As disclosed on page 46, 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 1.4GW of installed capacity
across 43 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 14.4TWh of clean energy, saving
5.7 million tonnes of CO
2
.
During the year, the Group’s wind farms generated
2,933GWh of renewable electricity. By the end
of 2021, the portfolio was generating sufficient
electricity to power over 1.5 million homes and
avoiding CO
2
emissions of approximately 1.7 million
tonnes per annum through the displacement of
thermal generation.
To sustain the long term success of the business, the
Company acknowledges and understands the
importance of effective management of ESG matters
for all stakeholders.
The Company continues to have an important role to
play in championing both responsible investment and
the development of the renewable energy sector. This
is achieved through continuous engagement with all
industry stakeholders and transparently sharing its ESG
approach and results with investors.
Responsible investing principles have been applied to
each of the investments made, which require the
Group to make reasonable endeavours to procure the
ongoing compliance of its investee companies with its
policies on responsible investment.
Although the non-executive Board has overall
responsibility for the activities of the Company and its
investments, the day-to-day management of the
business is delegated to the Investment Manager. This
includes responsibility for ESG matters before
investments are made and then continuously during the
life of each wind farm. The Investment Manager assesses
how ESG should be managed and the Company has
developed its ESG Policy in accordance with the
Investment Manager’s ESG Framework Policy. The ESG
Policy of the Company is approved and overseen by the
Company’s Board.
The Group will continue to lead the way in encouraging
responsible investment to accelerate the development
of the UK’s wind energy sector further and will do this
in a way that maximises returns for our shareholders
and creates benefits for the communities and the
natural environment in which its wind farms operate.
The Investment Manager has representation on the
boards of the operating wind farm companies which
oversee performance, including on ESG matters, and
meet quarterly. From these ongoing reviews, the
Investment Manager reports quarterly to the Company’s
Board, with data on production, wind farm availability,
key events and health and safety performance.
This robust management structure enables the
Investment Manager to oversee ESG issues effectively
throughout the lifecycle of the Group’s wind farms:
Screening
• screen against investment mandate and restrictions;
and
• assess the ability of the investment to comply with
ESG standards.
Due Diligence
• rigorously assess ESG risks based on commitment,
capacity, track record and features of the wind
farm; and
• identify mitigation plans.
Investment decision
• identify and address ESG issues in extracts of the
Investment Manager’s Investment Committee
papers that inform investment decisions; and
• determine and cost plans to address ESG issues,
and price into the investment decision process.
Asset Management
• establish appropriate governance structures;
• comply with all relevant laws and regulations;
• ensure ongoing monitoring and management of
ESG issues;
• manage impacts on the natural habitat
surrounding the wind farms we manage;
• engage with and support the local community;
• perform due diligence on third parties; and
• ensure business integrity with a focus on avoiding
money laundering, negligent or corrupt practices.
Strategic Report continued
26
Greencoat UK Wind PLC Annual Report for the year ended 31 December 2021
Environmental, Social and Governance continued
Environment
As one of the largest owners of wind farms in the UK,
the Group is focused on taking actions to support
climate change mitigation through the generation of
renewable energy, while minimising the potential
impacts that the operation of wind farms may have on
local habitats and the environment.
The world faces a serious climate challenge, and the
UK is taking an active role as a global leader in
greenhouse gas emissions reduction. The Company
supports the UK Government’s Ten Point Plan to be net
zero by 2050 by allowing developers and utilities to
recycle their capital, and by demonstrating the
attractive long term returns in the industry through our
prudent management of wind farms, thereby reducing
the cost of capital.
The Group is committed to protecting the local
environment around its wind farms, recognising the
potential impact that wind farms can have on local
terrestrial and aquatic wildlife and landscape.
As such, the Group seeks to protect the local
environment around its wind farms by using robust
environmental management systems. These include
policies, periodic risk assessments, monitoring and
regular reporting to the Board and the boards of each
of the wind farm companies. Through these measures,
the Group also ensures compliance with all applicable
laws, regulations and planning permissions as
administered by the Environment Agency, Health
Protection Agency, local authorities, Ofgem, UREGNI
or any other relevant regulatory body, including the
data reporting obligations under Renewable
Obligation Order 2009.
The Group’s core activities include:
• maintaining management systems to evaluate the
potential risks and impacts of its activities and
avoiding or mitigating environmental impacts on
biodiversity, air quality, noise, and waste
management where relevant;
• running habitat management plans at its wind
farms;
• undertaking additional environmental impact
assessments or undergoing regular monitoring,
as required;
• seeking to work with partners who uphold good
industry standards – from operational managers
whose management systems comply with the
requirements of ISO 14001:2015 (environmental
management systems) to the material contractors
used; and
• regular reporting to the Board and the boards of
each of the wind farm companies.
27
Strategic Report continued
G R E E N C O A T
U K W I N D
Brockaghboy
28
Greencoat UK Wind PLC Annual Report for the year ended 31 December 2021
Strategic Report continued
CASE STUDY
Peatland protection
Peatland protection plays a vital role in the transition to
net zero. Peatlands are important areas for biodiversity
and are the largest natural terrestrial carbon sinks, storing
twice as much carbon as all of the world’s forests
(1)
. As a
result, their protection is crucial to reducing emissions
and conserving biodiversity. Many of the wind farms in
our portfolio have protection initiatives and planning
obligations in place designed to manage and restore
peatland and blanket bog environments better.
In Dunmaglass, we restored blanket bog after our wind
farm was constructed and monitored the recovery of the
peatland, while preventing its erosion. Here, further
peatland restoration works commenced in Q3 2021 to
treat more than 20 hectares of eroding peatland around
the site. Ditch blockings will prevent further breakdown
of plant material, and carbon release, by restoring the
natural flow of water and soil saturation.
In Tappaghan , some of the peat, cut to accommodate
new infrastructure, had failed to revegetate. We trialled
a method using transplants to revegetate bare peat by
translocating small peat plugs from nearby vegetated
surfaces. Tall heather was pruned back and other species
were transplanted in the same condition that they were
growing in.
In Corriegarth, blanket bog restoration was carried out
in 2016, once on-site groundworks were completed. The
target was to restore areas of degrading blanket bog to
aid the long term conservation of the priority habitat
while promoting the restoration of peat bog. Measures
were put in place to prevent further erosion by means of
gully blocking and stabilising bare peat faces by
constructing dams. In largely vegetated areas, peaty soils
were drying out as a result of artificial drainage channels.
So, drains deeper than a metre were blocked to allow
rewetting of the bog.
In Screggagh, the area around the wind farm is primarily
blanket bog, with a peat depth varying from 0.5 to
5 metres. The HMP we have in place is designed to
maintain and enhance the blanket bog and grassland
habitats. We have focused on restoring areas of cut-over
blanket bog and ensuring that drainage structures do
not adversely affect blanket bog habitats. With a lack of
standing water anywhere on site, a system of pools and
dams was put in place to provide an array of permanent
and ephemeral water bodies throughout the site.
Trackside vegetation is now largely well established and
is in generally good condition where the tracks cut
through peatland habitats.
Blanket bog has been restored at Corriegarth
Rewetting of blanket bog at Corriegarth
(1)
United Nations Environment Programme. https://www.unep.org/news-and-stories/story/peatlands-store-twice-much-carbon-all-worlds-forests
Environmental, Social and Governance continued
Social
It is important that the wind farms are truly part of the
community. The Group’s approach aids long term
support for wind farms in the UK, which helps the
industry to continue its build out.
Supporting worker safety and fair employment on
our sites
The Group cares that the workers on its sites are safe.
The arrival of COVID-19 in 2020 only reinforced the
importance of employee health and wellbeing.
The Group also recognises the need for people to be
paid fairly for the work they do and to have
appropriate working conditions. By doing this, it helps
to sustain and grow the local communities in which its
wind farms operate.
The Group achieves this through a range of activities,
including:
• seeking to comply with all applicable laws relating
to employment, occupational health and safety,
human rights, prevention of human trafficking and
modern slavery, public safety and security and
community matters, including the Wind Turbine
Safety Rules;
• implementing health and safety best practices
through wind farm specific health and safety
policies, project management, contractual
arrangements, staff training and stakeholder
education;
• assessing and monitoring health and safety
practices through wind farm specific risk
identification and prevention activities. During the
year, these activities included: regular safety checks
carried out by the operations and maintenance
service providers at all wind farms; safety walks by
the Investment Manager’s team at 38 wind farms;
independent health and safety audits by an
accredited professional at 11 wind farms, and
electrical safety inspections at 18 sites; and
• reporting on key health and safety data regularly,
with escalation and rapid response procedures in
place in case of emergency.
As a member of Renewable UK, the UK’s leading wind
energy trade association, the Company is keen to
work with other stakeholders to develop the industry
further. In addition, the Investment Manager is an
active member of SafetyOn, the UK’s leading health
and safety focused organisation for the onshore
wind industry.
Supporting the communities around our wind farms
The Group cares about the communities around its
wind farms and engages with local communities to
ensure respect for land and access rights and that
its wind farms are managed in accordance with
planning permissions.
The Group holds regular dialogue with community
funds and provide financial support to local groups
through community benefit schemes that fund
local projects.
These funds help deliver a range of services, from
improving local amenities and infrastructure and aiding
educational projects for local schools to providing
COVID-19 emergency and response.
Supporting the communities during the pandemic
As the COVID-19 virus spread in early 2020, and local
and national lockdowns came into force, the Group
quickly implemented actions to support communities
in dealing with emergencies.
Actions taken included:
• Offering 10 per cent of the annual community
benefit funds for certain wind farms to help with
community COVID-19 response activity;
• Early release of funding to safeguard key
community projects; and
• Extension of funding to key social projects to
ensure support for the most vulnerable.
29
Strategic Report continued
G R E E N C O A T
U K W I N D
30
Greencoat UK Wind PLC Annual Report for the year ended 31 December 2021
Environmental, Social and Governance continued
Diversity
The Board has a policy to base appointments on merit
and against objective criteria, with due regard for the
benefits of diversity, including gender diversity. Its
objective is to attract and maintain a Board that, as a
whole, comprises an appropriate balance of skills
and experience.
The Board consists of individuals from relevant and
complementary backgrounds offering experience in the
investment management of listed funds, as well as in the
energy sector from both a public policy and a
commercial perspective. As at the date of this report, the
Board comprised 3 men and 3 women, all non-executive
Directors who are considered to be independent of the
Investment Manager and free from any business or other
relationship that could materially interfere with the
exercise of their independent judgement.
The Investment Manager operates an equal
opportunities policy and its partners and employees
comprise 57 men and 23 women.
Governance
Detailed disclosure on the Company’s governance
structure and activities can be found in the Corporate
Governance Report on pages 45 to 49.
Strategic Report continued
CASE STUDY
Clyde Wind Farm & Wiston Lodge
Clyde wind farm is a 522MW wind farm near Abington in
South Lanarkshire. It makes £625,000 available for
community and charitable projects within the Clyde wind
farm area every year.
This year, two grants totalling £62,190 were made to
Wiston Lodge, a charity and social enterprise with a focus
in delivering nature-based tailored learning programmes
to children and young people, vulnerable adults and to
the staff of the organisations that support them. The
Lodge is committed to welcoming a wide diversity of
groups from all backgrounds into their community and to
conserving and sustaining the environment in all of their
activities. A series of core programmes are run to support
the achievement of their mission, including:
• Adventure Activities
• Nature Connections (bushcraft, conservation, gardening)
• Music and Art
• Renewable Energy Education
Wiston works with their surrounding community to build
a brighter future for their local area. Programmes are
designed to demonstrate that working outdoors has the
power to transform people’s lives and foster an
appreciation of the great outdoors and a recognition of
our effect on the natural world.
Through the community fund managed by the South
Lanarkshire Council, £9,961 was provided to support
service delivery during the pandemic. Under the SSE-
managed Sustainable Development Fund, a separate
grant of £52,229 was provided to develop a visitor
changing and washroom facility. These funds helped to
continue the valuable work of the Wiston Lodge.
The visitor changing and washroom facility at Wiston Lodge
Wiston Lodge
Task Force on Climate-Related Financial Disclosures
(TCFD)
The Company strives to maintain the highest standards
of corporate governance and effective risk identification
and management at both Group and wind farm level.
The Company supports the recommendations of the
TCFD and refers to them for guidance on addressing
climate related risks and opportunities and enhancing
our disclosure.
These disclosures are categorised between the
4 thematic areas as recommended by the TCFD.
Governance
The Board is responsible for the determination of the
Company’s Investment Objective and Investment
Policy. It also oversees the management of the
Company and its investments, including ESG and
climate related risks and opportunities. The Board
delegates the day-to-day management of the business,
including management of ESG matters, to the
Investment Manager.
The Audit Committee also considers the Company’s
climate related disclosures in its Annual Report and
Financial Statements.
As discussed in the Corporate Governance Report on
pages 47 to 48, the Board and the Investment Manager
meet regularly and discuss risk management. Climate
related risks are covered during these discussions, as
they naturally arise from the Group’s underlying
investments and the Company’s significant role in the
decarbonisation of the UK economy. A formal risk matrix
is maintained by the Investment Manager and reviewed
and approved by the Board on an annual basis.
In addition, the Investment Manager has its own ESG
Committee that meets regularly to discuss ESG and
climate related risks relating to the Group and other
funds it manages. This committee has implemented an
ESG Framework Policy that looks to establish best
practice in climate related risk management, reporting
and transparency. Representatives from the Investment
Manager also sit on all of the boards of the wind farm
companies, which meet quarterly and discuss ESG and
climate related risk management.
Strategy
As the leading renewable infrastructure fund, invested
in UK wind farms, the Company plays a significant role
in the UK renewables industry. The Company’s strategy
and Investment Policy of acquiring operating wind
capacity in the secondary market, enables developers
and utilities to recycle capital, facilitating further
renewable build-out and thus plays a significant role in
increasing operating wind generating capacity.
The Company considers that the decarbonisation of
the UK economy will continue to present a significant
investment opportunity and the size of the Company’s
growth will be related to the success of the sector and
the engagement of its stakeholders.
The Board and the Investment Manager monitor
climate related risks and appreciate their impact on the
Group. In the medium and long term, more extreme
weather patterns arising from global warming have
the capacity to damage infrastructure in general,
including above ground grid infrastructure. It is
considered unlikely, however, that significant damage
will be caused to generating equipment that is
designed to operate in extreme weather conditions.
Nonetheless, appropriate insurance against property
damage and business interruption is held for any
such eventuality.
It is possible that the deployment of new renewable
generating capacity, required to meet future UK and
global emission reduction targets, could reduce the
power price captured by the Group’s portfolio
investments. The Group’s dividend policy, however, has
been designed to withstand significant short term
variability in generation or power price capture.
High Transition Risk Scenario
The Board and the Investment Manager believe that
the key factor that could impact the Company in the
transition to a lower carbon economy is the variability
of long term prices for wholesale electricity. In a
lower carbon economy, where considerable build-out
of renewable generation capacity will be required,
there is a risk that the power price received by the
Group’s portfolio could be negatively impacted,
depending on how successful the Government is in
implementing its plan and depending on future
electricity market design.
In a scenario in which global temperature increases are
limited to only 1.5°C to 2°C (most typically associated
with net zero), it is assumed that the Government is
successful in implementing its plan in its entirety. In this
scenario, the long term power price is lower than the
base case used to calculate the Company’s NAV. The
lower long term power price reflects the wider
deployment of low marginal cost renewable
generation capacity, partially offset by the expected
deployment of electrolysers as part of a growing
hydrogen economy, increased electrification of
transport and heat and the build-out of data centres.
Modelling the lower long term power price would
equate to approximately an 8 pence reduction in NAV
per share.
31
Strategic Report continued
G R E E N C O A T
U K W I N D
32
Greencoat UK Wind PLC Annual Report for the year ended 31 December 2021
Task Force on Climate-Related Financial Disclosures
(TCFD) continued
Strategy continued
High Transition Risk Scenario continued
The base case long term power price assumes
significant renewable generation and other measures
to reduce carbon emissions and represents the
independent consultant’s best estimate of likely
outturn. The High Transition Risk Scenario assumes
further measures. The precise effect on power price of
any measures (in the base case and in the High
Transition Risk Scenario) is highly uncertain and is
highly dependent on future electricity market design.
The High Transition Risk Scenario also assumes no
other offsetting factors.
High Physical Risk Scenario
The Board and the Investment Manager believe that a
scenario where global temperature increases are
significantly higher than 2°C would not lead to any
significant physical risk to the Group’s wind farms,
which are designed to operate in extreme weather
conditions and are typically not located in areas prone
to flooding.
Alongside all scenarios, there is a risk that weather
patterns change as a result of higher temperature
change scenarios but it is not possible, at this time, to
determine whether this would impact the Group
positively or negatively.
Risk Management
As a full scope UK AIFM, the Investment Manager has
established a Risk Management Committee that meets
on a quarterly basis to discuss, amongst other matters,
the risk framework of the Group and investee
companies including processes for identifying,
assessing and managing climate related risks.
To ensure strong performance, the Group reinforces its
specific oversight on environmental and social issues
with a range of activities, including:
• appointing at least one director from the
Investment Manager to the boards of the wind
farm companies, to ensure monitoring and
influence of both financial and ESG performance;
• carrying out due diligence to ensure that any new
outsourced service providers are reputable and
responsible organisations;
• carrying out due diligence during the acquisition
of new wind farms in accordance with the
Investment Manager’s established procedures and
ESG Framework Policy, and in compliance with the
AIFMD Due Diligence Policy; and
• complying with all applicable anti-bribery and
corruption, and anti-money laundering laws and
regulations and implementing policies to ensure
this performance is in line with the policies of the
Investment Manager.
The Investment Manager’s Investment Committee
comprises experienced senior managers. Whilst
making investment decisions, due consideration is
given to climate related risks as well as to opportunities
identified during due diligence.
Metrics and Targets
The world faces a serious climate challenge, and the
UK is taking an active role as a global leader in
greenhouse gas emissions reduction.
The Government published its net zero strategy in
October 2021, just before the UK hosted the COP26
conference in Glasgow. That strategy sets out a high
level plan to reach net zero carbon emissions by 2050,
which will require significant investment. The plan
includes targets for:
• 40GW of offshore wind capacity by 2030;
• 5GW of hydrogen production capacity by 2030;
• additional nuclear capacity;
• 4 carbon capture and storage clusters; and
• electrification of transportation (thus increasing
demand for electricity).
The Group supports this investment 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.
Renewable energy generators avoid carbon dioxide
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 2021, the
portfolio’s contribution to CO
2
emissions is reductions
is approximately 1.7 million tonnes per annum. The
portfolio is also generating sufficient electricity to
power 1.5 million homes per annum, at 2.9MWh
per home.
Strategic Report continued
Task Force on Climate-Related Financial Disclosures
(TCFD) continued
Metrics and Targets continued
The portfolio’s Scope 1, Scope 2 and Scope 3
greenhouse gas emissions are disclosed below.
Year ended
31 December
Disclosure 2021
Scope 1 – direct emissions
(tonnes CO
2
) 35
Scope 2 – indirect emissions
(tonnes CO
2
) 74
Scope 3 – indirect emissions
(tonnes CO
2
)
(1)
87,908
Total Scope 1, 2 and 3 emissions
(tonnes CO
2
) 88,017
(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 2021, 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.
On behalf of the Board
Shonaid Jemmett-Page
Chairman
23 February 2022
33
Strategic Report continued
G R E E N C O A T
U K W I N D
Clyde
34
Greencoat UK Wind PLC Annual Report for the year ended 31 December 2021
Board of Directors
As at the date of this report, the Board comprises 6 individuals from relevant and complementary backgrounds,
including Nick Winser who the Board appointed as a non-executive Director of the Company with effect from 1
January 2022. Nick has also been appointed as a member of the Company’s Audit, Management Engagement
and Nominations Committees.
The Directors are of the opinion that the Board as a whole comprises an appropriate balance of skills, experience
and diversity.
Shonaid Jemmett-Page, Chairman (appointed 5 December 2012)
Shonaid Jemmett-Page, (Chairman) FCA (Director), aged 61, 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, a
non-executive Director of Caledonia Investments plc and Chairman of its remuneration committee and a member
of its governance, nomination and audit committees, Senior Independent Director and Chairman of its audit and
remuneration committees and a member of the nomination and risk committees at ClearBank Ltd, 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. On 20 December 2021 she was appointed as a non-executive
Director of Aviva plc. Until January 2016 she was a non-executive Director of APR Energy Limited where she
served as Chairman of its audit committee and a member of its remuneration committee. Until October 2017 she
was non-executive Chairman of Origo Partners plc. 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, and 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). She is also the examiner of the UK branch of an
Indian children’s cancer charity.
Caoimhe Giblin, Chairman of the Audit Committee (appointed 1 September 2019)
Caoimhe Giblin (Director and Audit Committee Chairman), aged 45, 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.
35
G R E E N C O A T
U K W I N D
Board of Directors continued
William Rickett C.B., Senior Independent Director (appointed 4 December 2012)
William Rickett C.B. (Senior Independent Director), William Rickett C.B., aged
69, is a former Director General of the Department of Energy & Climate
Change within the UK Government (2006-2009) with considerable experience
as non-executive director of private sector companies. William is Chairman of
Cambridge Economic Policy Associates Ltd, an economic, financial and public
policy consultancy with a strong energy practice and was Chairman of the
governing board of the International Energy Agency from 2007 to 2009.
William was previously a non-executive Director of Eggborough Power Ltd, an
electricity generating company, Helius Energy plc, an AIM listed developer of
new dedicated biomass power stations, the National Renewable Energy Centre
Limited, which helps to develop renewable energy technology, Smart DCC Ltd,
the company procuring the shared infrastructure needed for the roll out of smart gas and electricity meters across
the country, and Impax Environmental Markets plc, a listed investment trust specialising in the alternative energy,
waste and water sectors. William is also a non-executive Director of Harmony Energy Income Trust PLC, a company
that invests in commercial scale energy storage and renewable energy generation projects.
William’s Whitehall career included 15 years of board-level experience in five government departments focusing
on energy and transport. In the late 1980s he led the privatisation of the electricity industry creating the first
competitive electricity market in the world. Later as Director General of Energy he drove the transformation of the
UK energy policy to re-establish a nuclear power programme as well as developing strategies for the deployment
of renewable energy. He was made a Companion of the Order of the Bath in the New Year Honours in 2010.
Martin McAdam (appointed 1 March 2015)
Martin McAdam, aged 60, 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.
Lucinda Riches C.B.E., (appointed 1 May 2019)
Lucinda Riches C.B.E. (Director), aged 60, 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 Senior Independent
Director and Deputy Chair 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.
Board of Directors continued
Nick Winser (appointed 1 January 2022)
Nick Winser C.B.E, aged 61, has a 30 year career in the energy sector which
included CEO of National Grid across UK and Europe, President of the
European Network of Transmission System Operators for Electricity and CIGRE
UK Chair. 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 and served on the Advisory Panel for the Cost of
Energy Review in 2017. He is also a member of a COP26 Advisory Group and
the Net Zero Expert Group which advises the Secretary of State.
Nick is a member of the IET, serving as its President in 2017/18. Nick maintains
a keen interest in the organisation’s work and sits on the Nominations &
Succession Committee. Nick is also Chair of the MS Society and a former member of the Board of the Kier Group.
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:
Shonaid Jemmett-Page
Caledonia Investments plc
QinetiQ Group plc
Cordiant Digital Infrastructure Limited
Aviva plc
William Rickett C.B.
Harmony Energy Income Trust plc
Lucinda Riches C.B.E.
Ashtead Group plc
Peel Hunt Limited
With the exception of William Rickett, the Directors have all offered themselves for re-election and resolutions
concerning this will be proposed at the 2022 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 quarterly 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.
36
Greencoat UK Wind PLC Annual Report for the year ended 31 December 2021
37
G R E E N C O A T
U K W I N D
The Directors present their Annual Report, together
with the consolidated financial statements of
Greencoat UK Wind PLC for the year to 31 December
2021. The Corporate Governance Report on pages 45
to 49 forms part of this report.
Details of the Directors who held office during the year
and as at the date of this report are given on pages 34
to 36.
Capital Structure
The Company has one class of ordinary shares which
carry no rights to fixed income. Shareholders are
entitled to all dividends paid by the Company and, on
a winding up, provided the Company has satisfied all
of its liabilities, the shareholders are entitled to all of
the surplus assets of the Company.
Shareholders will be entitled to attend and vote at all
general meetings of the Company and, on a poll, to
one vote for each ordinary share held.
Authority to Purchase Own Shares
The current authority of the Company to make market
purchases of up to 14.99 per cent of its issued share
capital expires at the conclusion of the 2022 AGM.
Special resolution 13 will be proposed at the
forthcoming AGM seeking renewal of such authority until
the next AGM (or 30 June 2023, whichever is earlier).
The price paid for the shares will not be less than the
nominal value or more than the maximum amount
permitted to be paid in accordance with the rules of the
UK Listing Authority in force at the date of purchase. This
power will be exercised only if, in the opinion of the
Directors, a repurchase would be in the best interests of
shareholders as a whole. Any shares repurchased under
this authority will either be cancelled or held in treasury
at the discretion of the Board for future resale in
appropriate market conditions.
The Directors believe that the renewal of the
Company’s authority to purchase shares, as detailed
above, is in the best interests of shareholders as a
whole and therefore recommend shareholders to vote
in favour of special resolution 13.
The Directors also recommend shareholders to vote in
favour of resolutions 11 and 12, which renew their
authority to allot equity securities for the purpose of
satisfying the Company’s obligations to pay the equity
element of the Investment Manager’s fee, and also
their authority to allot equity securities for cash either
pursuant to the authority conferred by resolution 11 or
by way of a sale of treasury shares.
Major Interests in Shares
Significant shareholdings as at 11 February 2022 are
detailed below.
Ordinary
shares held %
11 February
Shareholder 2022
Newton Investment Management 7.46
BlackRock Investment Management 5.98
Rathbone Investment Management 5.62
Investec Wealth & Investment 5.09
Baillie Gifford 4.77
FIL Investment International 4.75
M&G Investments 3.14
Legal & General Investment Management 3.09
Significant shareholdings as at 31 December 2021 are
detailed below.
Ordinary
shares held %
31 December
Shareholder 2021
Newton Investment Management 7.54
Rathbone Investment Management 5.63
Investec Wealth & Investment 5.20
Baillie Gifford 5.17
FIL Investment International 4.79
BlackRock Investment Management 4.75
Legal & General Investment Management 3.20
M&G Investments 3.11
Companies Act 2006 Disclosures
In accordance with Schedule 7 of the Large and
Medium Sized Companies and Groups (Accounts and
Reports) Regulations 2008 the Directors disclose the
following information:
• the Company’s capital structure is detailed in note
15 to the financial statements and all shareholders
have the same voting rights in respect of the share
capital of the Company. There are no restrictions
on voting rights that the Company is aware of, nor
any agreement between holders of securities that
result in restrictions on the transfer of securities or
on voting rights;
• there exist no securities carrying special rights with
regard to the control of the Company;
• the Company does not have an employees’ share
scheme;
• the rules concerning the appointment and
replacement of Directors are contained in the
Company’s Articles of Association and the
Companies Act 2006;
Report of the Directors
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 20 and the Group’s
policy on diversity is detailed in the Strategic Report
on page 30.
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 carbon dioxide emissions on a net basis (at a rate
of approximately 0.4t CO
2
per MWh and
approximately 1.7 million tonnes per annum based
given the size of the Group’s investment portfolio on
31 December 2021).
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 33.
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 2022 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 2021 are
received and adopted by the shareholders and a
resolution concerning this will be proposed at the
2022 AGM.
Dividend
The Board recommended an interim dividend of
£41.6 million, equivalent to 1.795 pence per share with
respect to the 3 month period ended 31 December
2021, bringing total dividends with respect to the year
to £148.0 million, equivalent to 7.18 pence per share as
disclosed in note 8 to the financial statements.
Report of the Directors continued
38
Greencoat UK Wind PLC Annual Report for the year ended 31 December 2021
39
G R E E N C O A T
U K W I N D
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 21 to 33.
On behalf of the Board
Shonaid Jemmett-Page
Chairman
23 February 2022
Report of the Directors continued
Walney
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 2022 AGM. At the AGM on 28 April 2021,
shareholders voted 99.54 per cent in favour to approve the Directors’ Remuneration Report for the year ended
31 December 2020.
The Company’s Auditor is required to give their opinion on the information provided on Directors’ remuneration
on pages 40 to 43 of this report and this is explained further in its report to shareholders on page 59. 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 34 to 36, consists solely of non-executive Directors and is considered to be
entirely 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 £5,000 per annum to £45,000
following an internal evaluation. The Board confirmed that this increase was appropriate through discussions with
an external consultant and it was agreed the Directors would remain eligible for a discretionary payment of up to
£10,000, where significant additional work is incurred by Directors in the raising of further equity, as disclosed in
the Annual Report on Remuneration below.
Remuneration Policy
As at the date of this report, the Board comprised 6 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 30 April 2020, shareholders voted 98.25 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 and no changes are expected for 2022.
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 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 date and expiry of each of the Directors’ current letters of appointment:
Date of current Date of expiry of current
appointment letter appointment letter
Shonaid Jemmett-Page May 2020 May 2023
William Rickett C.B. February 2019 February 2022
Martin McAdam February 2021 February 2024
Lucinda Riches C.B.E. March 2019 March 2022
Caoimhe Giblin August 2019 August 2022
Nick Winser January 2022 January 2025
A Director’s appointment may at any time be terminated by and at the discretion of either party upon 6 months’
written notice. A Director’s appointment will automatically end without any right to compensation whatsoever if
they are not re-elected by the shareholders. A Director’s appointment may also be terminated with immediate
effect and without compensation in certain other circumstances. Being non-executive Directors, none of the
Directors have a service contract with the Company.
The terms and conditions of appointment of non-executive Directors are available for inspection from the
Company’s registered office.
Directors’ Remuneration Report
40
Greencoat UK Wind PLC Annual Report for the year ended 31 December 2021
41
G R E E N C O A T
U K W I N D
Annual Report on Remuneration
During the year, the basic fee for non-executive Directors increased by £5,000 per annum to £45,000, with effect
from 1 January 2021, with the Senior Independent Director and the Audit Committee Chair receiving an additional
£5,000 and £10,000 per annum respectively. The Chairman’s basic fee was also increased by £5,000 to £75,000
per annum.
In addition, and in line with the practice of some other companies in the sector, where significant additional work
and responsibility is incurred by Directors in the raising of further equity, appropriate additional fees of no more
than £10,000 per annum per Director will be paid.
The level of fees for Directors were benchmarked in 2019 by independent consultants, Heidrick & Struggles, as
in line with the market. The Company is now the largest independent generator of renewable electricity in the
UK. Its GAV has grown to £4.0 billion through acquisitions and equity raisings and, in the last 3 years, the Board
and its committees have held 80 meetings.
The Board takes the view that making discretionary payments to Directors for the extra work involved when equity
raisings are required is better for shareholders than a permanent increase in the level of Directors’ base fees.
The table below (audited information) shows the total remuneration earned by each individual Director during the
current year:
Fixed Discretionary Total
Paid in the year to 31 December 2021 remuneration remuneration
(1)
remuneration
Shonaid Jemmett-Page (Chairman) £75,000 £10,000 £85,000
Caoimhe Giblin (Audit Committee Chairman) £55,000 £10,000 £65,000
William Rickett C.B. (Senior Independent Director) £50,000 £10,000 £60,000
Martin McAdam £45,000 £10,000 £55,000
Lucinda Riches C.B.E. £45,000 £10,000 £55,000
Total £270,000 £50,000 £320,000
(1)
The Directors received an additional discretionary payment from the Company in relation to work incurred in connection with the share
placings in February and November 2021.
The table below (audited information) shows the total remuneration earned by each individual Director during the
prior year:
Fixed Discretionary Total
Paid in the year to 31 December 2020 remuneration remuneration
(4)
remuneration
Shonaid Jemmett-Page (Chairman)
(1)
£63,333 £10,000 £73,333
Caoimhe Giblin (Audit Committee Chairman)
(2)
£46,667 £10,000 £56,667
William Rickett C.B. (Senior Independent Director) £45,000 £10,000 £55,000
Martin McAdam £40,000 £10,000 £50,000
Lucinda Riches C.B.E. £40,000 £10,000 £50,000
Tim Ingram
(3)
£23,333 — £23,333
Total £258,333 £50,000 £308,333
1)
Appointed as Chairman of the Board with effect from 30 April 2020. The basic remuneration for the role of Chairman remained unchanged
at £70,000 per annum.
(2)
Appointed as Audit Committee Chairman with effect from 30 April 2020.
(3)
Retired with effect from 30 April 2020.
(4)
The Directors received an additional discretionary payment from the Company in relation to work incurred in connection with the October
2020 share placing.
Directors’ Remuneration Report continued
Annual Report on Remuneration continued
2021 2020
% change from % change from
Paid in the year to 31 December 2021 prior year
(1)
prior year
(1)
Shonaid Jemmett-Page (Chairman) 16% 22%
Caoimhe Giblin (Audit Committee Chairman)
(2)
15% 325%
William Rickett C.B. (Senior Independent Director) 9% 0%
Martin McAdam 10% 0%
Lucinda Riches C.B.E.
(3)
10% 58%
Tim Ingram
(4)
n/a -71%
Dan Badger
(5)
n/a -100%
(1)
Movement in Individual Director’s salary based on annualised total figures.
(2)
Appointed with effect from 1September 2019
(3)
Appointed with effect from 1 May 2019
(4)
Retired with effect from 30 April 2020.
(5)
Resigned 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 2021 are given in
the table below. There were no changes to the interests of each Director as at the date of this report.
Ordinary shares Ordinary shares
of 1p each held at of 1p each held at
31 December 2021 31 December 2020
Shonaid Jemmett-Page
(1)
131,602 116,450
William Rickett C.B.
(2)
37,500 37,500
Martin McAdam 103,689 98,689
Lucinda Riches C.B.E. 120,000 70,000
Caoimhe Giblin 40,000 20,000
(1)
includes 59,570 ordinary shares legally and beneficially owned by her spouse.
(2)
includes 30,000 ordinary shares legally and beneficially owned by members of his family.
Relative Importance of Spend on Pay
The remuneration of the Directors with respect to the year totalled £320,000 (2020: £308,333) in comparison to
dividends paid or declared to shareholders with respect to the year of £147,998,434 (2020: £118,662,399).
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. As the Company
listed on 27 March 2013, historical data for the past 10 years is not yet available. The graph below shows the TSR of
the Company compared to the FTSE 250 index and the Bloomberg Barclays Sterling Corporate Bond Index:
Directors’ Remuneration Report continued
42
Greencoat UK Wind PLC Annual Report for the year ended 31 December 2021
Total Shareholder Return vs Equity and Bond Indices
On behalf of the Board
Shonaid Jemmett-Page
Chairman
23 February 2022
%
90
110
130
150
170
190
210
230
Dec
2013
Dec
2014
Dec
2016
Dec
2017
Dec
2018
Dec
2015
Dec
2019
Dec
2020
Greencoat UK Wind PLC
Bloomberg Barclays Sterling
Corporate Bond Index
(rebased to 100)
FTSE 250
(rebased to 100)
Dec
2021
43
Directors’ Remuneration Report continued
G R E E N C O A T
U K W I N D
44
Greencoat UK Wind PLC Annual Report for the year ended 31 December 2021
Statement of Directors’ Responsibilities
The Directors are responsible for preparing the Annual
Report and the financial statements in accordance with
applicable law and regulations.
Company law requires the Directors to prepare
financial statements for each financial year. Under that
law the Directors are required to prepare the Group’s
financial statements, and have elected to prepare the
Company’s financial statements, in accordance with UK
adopted international accounting standards and with
the requirements of the Companies Act 2006 as
applicable to companies reporting under those
standards. Under company law the Directors must not
approve the financial statements unless they are
satisfied that they give a true and fair view of the state
of affairs of the Group and Company and of the profit
or loss for the Group for that period.
In preparing these financial statements, the Directors
are required to:
• select suitable accounting policies and then apply
them consistently;
• make judgements and accounting estimates that
are reasonable and prudent;
• state whether they have been prepared in
accordance with UK adopted international
accounting standards, subject to any material
departures disclosed and explained in the financial
statements;
• prepare the financial statements on the going
concern basis unless it is inappropriate to presume
that the Company will continue in business; and
• prepare a Report of the Directors, a Strategic
Report and Directors’ Remuneration Report which
comply with the requirements of the Companies
Act 2006.
The directors are responsible for keeping adequate
accounting records that are sufficient to show and
explain the company’s transactions and disclose with
reasonable accuracy at any time the financial position of
the company and enable them to ensure that the
financial statements comply with the Companies Act
2006. They are also responsible for safeguarding the
assets of the Company and hence for taking reasonable
steps for the prevention and detection of fraud and
other irregularities. The Directors are responsible for
ensuring that the Annual Report, taken as a whole, is
fair, balanced and understandable and provides the
information necessary for shareholders to assess the
Group’s performance, business model and strategy.
The Directors are also responsible under section 172
of the Companies Act 2006 to promote the success of
the Company for the benefit of its members as a whole
and in doing so have regard for the needs of wider
society and other stakeholders.
Website Publication
The Directors are responsible for ensuring the Annual
Report and the financial statements are made available
on a website. Financial statements are published on
the Company’s website in accordance with legislation
in the UK governing the preparation and dissemination
of financial statements, which may vary from legislation
in other jurisdictions. The maintenance and integrity of
the Company’s website is the responsibility of the
Directors. The Directors’ responsibilities also extend to
the ongoing integrity of the financial statements
contained therein.
Directors’ Responsibilities Pursuant to DTR4
The Directors confirm to the best of their knowledge
that:
• the Group’s financial statements have been
prepared in accordance with UK adopted
international accounting standards and with the
requirements of the Companies Act 2006 as
applicable to companies reporting under those
standards, and give a true and fair view of the
assets, liabilities, financial position and profit and
loss of the Group; and
• the Annual Report includes a fair review of the
development and performance of the business
and the financial position of the Group and the
Parent Company, together with a description of
the principal risks and uncertainties that they face.
On behalf of the Board
Shonaid Jemmett-Page
Chairman
23 February 2022
45
G R E E N C O A T
U K W I N D
This Corporate Governance Report forms part of the
Report of the Directors as further disclosed on pages 37
to 39. The Board operates under a framework for
corporate governance which is appropriate for an
investment company. All companies with a premium
listing of equity shares in the UK are required under the
UK Listing Rules to report on how they have applied the
UK Code in their Annual Report and financial statements.
The Company became a member of the AIC with effect
from 27 March 2013 and has therefore put in place
arrangements to comply with the AIC Code and, in
accordance with the AIC Code, complies with the
UK Code.
The AIC Code, as explained by the AIC Guide, addresses
all the principles set out in the UK Code, as well as
setting out additional principles and recommendations
on issues that are of specific relevance to investment
companies such as the Company.
The AIC Code and the AIC Guide are available on the
AIC’s website, www.theaic.co.uk. The UK Code is
available on the FRC’s website, www.frc.org.uk.
The Company has complied with the recommendations
of the AIC Code throughout the year.
Purpose, Culture and Values
The Company’s purpose remains clear; to provide
shareholders with an annual dividend that increases in
line with RPI inflation while preserving the capital value
of its investment portfolio in the long term on a real
basis through reinvestment of excess cash flow.
The Company provides investors with the opportunity
to participate directly in the ownership of UK wind
farms, so increasing the resources and capital
dedicated to the deployment of renewable energy and
the reduction of greenhouse gas emissions.
As an investment trust with no employees, the Board
have agreed that its culture and values should be
aligned with those of the Investment Manager and
centred on long term relationships with the Company’s
key stakeholders and sustainable investment as follows:
• Integrity is at the heart of every activity, with
importance being placed on transparency,
trustworthiness and dependability.
• The trust of stakeholders is very important to
maintain the Company’s reputation, particularly
for execution certainty for asset sellers and
delivery of investment promises to investors.
• Respect for differing opinions is to be shown
across all interaction and communication.
• Individual empowerment is sought with growth in
responsibility and autonomy being actively
encouraged.
• Collaboration and effectively utilising the
collective skills of all participants is important to
ensure ideas and information are best shared.
The Board
As at the date of this report, the Board consists of 6 non-
executive Directors and represents a range of
investment, financial and business skills and experience.
The Chairman of the Board is Shonaid Jemmett-Page.
In considering the independence of the Chairman, the
Board took note of the provisions of the AIC Code
relating to independence, and has determined that Ms
Jemmett-Page is an independent director. The Senior
Independent Director is William Rickett C.B.. It is
expected that Lucinda Riches will be appointed as
Senior Independent Director following William’s
retirement at the forthcoming AGM. The Company has
no employees and therefore there is no requirement
for a chief executive.
The Articles of Association provide that Directors shall
retire and offer themselves for re-election at the first
AGM after their appointment and at least every 3 years
thereafter. However, the AIC Code requires that
Directors be subject to an annual election by
shareholders, and the Directors comply with this
requirement. All of the Directors, other than William
Rickett C.B., shall offer themselves for re-election at the
forthcoming AGM. Having considered their
effectiveness, demonstration of commitment to the role,
length of service, attendance at meetings and
contribution to the Board’s deliberations, the Board
approves the nomination for re-election of the Directors.
The Company’s view is that the continuity and
experience of its Directors are important and that a
suitable balance needs to be struck with the need for
independence and the refreshing of the skills and
expertise of the Board. The Company believes that some
limited flexibility in its approach to Director rotation and
Chair tenure will enable it to manage succession
planning more effectively. In such circumstances, the
independence of the other directors will ensure that the
Board as a whole remains independent.
Mr Rickett joined the Company in December 2012,
bringing him beyond the nine year director tenure limit,
and as such will not seek re-election at the 2022 Annual
General Meeting.
The terms and conditions of appointment of non-
executive Directors are available for inspection from
the Company’s registered office.
Corporate Governance Report
46
Greencoat UK Wind PLC Annual Report for the year ended 31 December 2021
Corporate Governance Report continued
Chair Tenure Policy
The Company's policy on Chair tenure is available on
the Company website. Ms Jemmett-Page joined the
Company in December 2012, bringing her beyond the
nine year director tenure limit, but was appointed as
Chairman of the Board in April 2020. The Company’s
policy on Chair tenure is that the Chair should normally
serve no longer than nine years as a Director and Chair
but, where it is in the best interests of the Company, its
shareholders and stakeholders, the Chair may serve for
a limited time beyond that to help the Company
manage succession planning whilst at the same time still
address the need for regular refreshment and diversity.
In such circumstances the independence of the other
Directors will ensure that the Board as a whole remains
independent. The Company believes that this limited
flexibility regarding Chair tenure will enable it to
manage succession planning more effectively.
Performance and Evaluation
Pursuant to Provision 26 of the AIC Code, the Board
undertakes a formal and rigorous evaluation of its
performance each financial year. As a FTSE 250
company, in keeping with the provisions of the AIC
Code, it is the Company’s policy that every 3 years an
external consultant, who has no connection with the
Company, carries out a formal review of the Board’s
performance. This was last conducted in 2019.
An internal evaluation of the Board, the Audit
Committee and individual Directors was conducted
during 2021 in the form of annual performance
appraisals, questionnaires and discussions to determine
effectiveness and performance in various areas, as well
as the Directors’ continued independence and tenure.
This process was facilitated by the Company Secretary.
The reviews concluded that the overall performance of
the Board and Audit Committee was satisfactory and
the Board was confident in its ability to continue to
govern the Company well.
Each individual Director’s training and development
needs are reviewed annually. All new Directors receive
an induction from the Investment Manager, which
includes the provision of information about the
Company and their responsibilities. In addition, site
visits and specific Board training sessions are arranged
involving presentations on relevant topics.
Board Responsibilities
The Board will meet, on average, 5 times in each
calendar year for scheduled Board meetings and on an
ad hoc basis as and when necessary. At each meeting
the Board follows a formal agenda that will cover the
business to be discussed. Between meetings there is
regular contact with the Investment Manager and the
Administrator. The Board requires to be supplied with
information by the Investment Manager, the
Administrator and other advisers in a form appropriate
to enable it to discharge its duties.
The Board has responsibility for ensuring that the
Company keeps proper accounting records which
disclose with reasonable accuracy at any time the financial
position of the Company and which enable it to ensure
that the financial statements comply with applicable
regulation. It is the Board’s responsibility to present a fair,
balanced and understandable Annual Report, which
provides the information necessary for shareholders to
assess the performance, strategy and business model of
the Company. This responsibility extends to the half year
and other price-sensitive public reports.
Committees of the Board
The Company’s Audit Committee is chaired by
Caoimhe Giblin and consists of a minimum of 3
members. In accordance with best practice, the
Company’s Chairman is not a member of the Audit
Committee however she does attend Audit Committee
meetings as and when deemed appropriate. The Audit
Committee Report which is on pages 50 to 53 of this
report describes the work of the Audit Committee.
The Company’s Management Engagement Committee
comprises all of the Directors and is required to meet at
least once per year. The Chairman of the Management
Engagement Committee is Shonaid Jemmett-Page. The
Management Engagement Committee’s main function is
to keep under review the performance of the Investment
Manager and make recommendations on any proposed
amendment to the Investment Management Agreement.
Terms of reference for the Management Engagement
Committee have been approved by the Board and are
available on the Company’s website.
The Management Engagement Committee met once
during the year to review the performance of the
Investment Manager and to consider the structure of
the Investment Manager’s fee.
The Company’s Nominations Committee comprises all
of the Directors and is required to meet at least once
per year. The Chairman of the Nominations Committee
is Shonaid Jemmett-Page. The Nominations
Committee’s main function is to plan for Board
succession and to review annually the structure, size and
composition of the Board and make recommendation
to the Board with regard to any changes that are
deemed necessary. Terms of reference for the
Nominations Committee have been approved by the
Board and are available on the Company’s website.
47
G R E E N C O A T
U K W I N D
Committees of the Board continued
The Nominations Committee met twice during the
year to consider Board succession planning, as well as
the Director recruitment process in which a shortlist of
candidates had been identified for consideration by
the recruitment consultant, Nurole Limited. Following
a discussion with Nurole Limited and the Investment
Manager, the Nominations Committee recommended
the appointment of Mr Nick Winser as a non-executive
Director of the Company.
The Company has established a Communications and
Disclosure Committee which is required to meet at
least once a year. The committee has responsibility for,
amongst other things, determining on a timely basis
the disclosure treatment of material information, and
assisting in the design, implementation and periodic
evaluation of disclosure controls and procedures. The
committee also has responsibility for the identification
of inside information for the purpose of maintaining
the Company’s insider list.
Terms of reference for the Communications and
Disclosure Committee have been approved by the
Board and are available on the Company’s website.
Membership consists of the Chairman (or one other
Director) and one of Stephen Lilley and Laurence
Fumagalli. Additional members of the committee may
be appointed and existing members removed by the
committee. The membership of the committee is
reviewed by the Board on a periodic basis and at least
once a year.
The AIC Code recommends that companies appoint a
Remuneration Committee, however the Board has not
deemed this necessary, as being wholly comprised of
non-executive Directors, the whole Board considers
these matters.
The Investment Manager
The Board has entered into the Investment
Management Agreement with the Investment Manager
under which the Investment Manager is responsible for
developing strategy and the day-to-day management
of the Group’s investment portfolio, in accordance with
the Group’s Investment Objective and Investment
Policy, subject to the overall supervision of the Board. A
summary of the fees paid to the Investment Manager
are given in note 3 to the financial statements.
The Investment Manager’s appointment is terminable
by the Investment Manager or the Company on not
less than 12 months’ notice. The Investment
Management Agreement may be terminated with
immediate effect and without compensation, by either
the Investment Manager or the Company if the other
party has gone into liquidation, administration or
receivership or has committed a material breach of the
Investment Management Agreement.
The Board as a whole reviewed the Company’s
compliance with the UK Corporate Governance Code,
the Listing Rules, the Disclosure Guidance and
Transparency Rules and the AIC Code. In accordance
with the Listing Rules, the Directors confirm that the
continued appointment of the Investment Manager
under the current terms of the Investment
Management Agreement is in the interests of
shareholders. The Board also reviewed the
performance of other service providers and examined
the effectiveness of the Company’s internal control
systems during the year.
Board Meetings, Committee Meetings and Directors’
Attendance
The number of meetings of the full Board attended in
the year to 31 December 2021 by each Director is set
out below:
Scheduled Additional
Board Board
Meetings Meetings
(Total of 5) (Total of 13)
Shonaid Jemmett-Page 5 13
William Rickett C.B. 5 13
Martin McAdam 5 13
Lucinda Riches C.B.E. 5 13
Caoimhe Giblin 5 13
The number of meetings of the committees of the
Board attended in the year to 31 December 2021 by
each committee member is set out below:
Management
Audit Engagement Nominations
Committee Committee Committee
Meetings Meetings Meetings
(Total of 4) (Total of 1) (Total of 2)
Shonaid Jemmett-Page n/a 1 2
William Rickett C.B. 4 1 2
Martin McAdam 4 1 2
Lucinda Riches C.B.E. 4 1 2
Caoimhe Giblin 4 1 2
Internal Control
The Board is responsible for the Company’s system of
internal control and for reviewing its effectiveness. The
Board confirms that it has an ongoing process for
identifying, evaluating and managing the significant
risks faced by the Company. This process has been in
place throughout the year and has continued since the
year end.
Corporate Governance Report continued
48
Greencoat UK Wind PLC Annual Report for the year ended 31 December 2021
Corporate Governance Report continued
Internal Control continued
The Company’s principal risks and uncertainties are
detailed on pages 22 to 24 of this report. As further
explained in the Audit Committee Report, the risks of
the Company are outlined in a risk matrix which was
reviewed and updated during the year. The Board
continually reviews its policy setting and updates the risk
matrix at least annually to ensure that procedures are in
place with the intention of identifying, mitigating and
minimising the impact of risks should they crystallise.
The Board has a process in place to identify emerging
risks, such as climate related risks, and to determine
whether any actions are required. The Board relies on
reports periodically provided by the Investment
Manager and the Administrator regarding risks that the
Company faces. When required, experts are employed
to gather information, including tax and legal advisers.
The Board also regularly monitors the investment
environment and the management of the Company’s
portfolio, and applies the principles detailed in the
internal control guidance issued by the FRC.
The Board holds an annual risk and strategy discussion,
which enables the Directors to consider risk outside the
scheduled quarterly Board meetings. This enables
emerging risks to be identified and discussions on
horizon scanning to occur, so the Board can consider
how to manage and potentially mitigate any relevant
emerging risks.
The principal features of the internal controls systems
which the Investment Manager and Administrator have
in place in respect of the Group’s financial reporting
are focussed around the 3 lines of defence model
and include:
• internal reviews of all financial reports;
• review by the Board of financial information prior
to its publication;
• authorisation limits over expenditure incurred by
the Group;
• review of valuations; and
• authorisation of investments.
Whistleblowing
The Board has considered the AIC Code
recommendations in respect of arrangements by which
staff of the Investment Manager or Administrator may,
in confidence, raise concerns within their respective
organisations about possible improprieties in matters
of financial reporting or other matters. It has concluded
that adequate arrangements are in place for the
proportionate and independent investigation of such
matters and, where necessary, for appropriate follow-
up action to be taken within their organisation.
Amendment of Articles of Association
The Company’s Articles of Association may be
amended by the members of the Company by special
resolution (requiring a majority of at least 75 per cent
of the persons voting on the relevant resolution).
Engagement with Stakeholders
The Company is committed to maintaining good
communications and building positive relationships
with all stakeholders, including shareholders, debt
providers, analysts, potential investors, suppliers and
the wider communities in which the Group and its
investee companies operate. This includes regular
engagement with the Company’s shareholders and
other stakeholders by the Board, the Investment
Manager and the Administrator. Regular feedback is
provided to the Board to ensure they understand the
views of stakeholders.
Relations with Shareholders
The Company welcomes the views of shareholders and
places great importance on communication with its
shareholders. The Investment Manager is available at
all reasonable times to meet with principal
shareholders and key sector analysts. The Chairman,
the Senior Independent Director and other Directors
are also available to meet with shareholders,
if required.
All shareholders have the opportunity to put questions
to the Company at its registered address. The AGM of
the Company should provide a forum for shareholders
to meet and discuss issues with the Directors and
Investment Manager.
The Board receives comprehensive shareholder reports
from the Company’s Registrar and regularly monitors
the views of shareholders and the shareholder profile
of the Company. The Board is also kept fully informed
of all relevant market commentary on the Company by
the Investment Manager.
Relations with Other Stakeholders
The Company values its relationships with its debt
providers. The Investment Manager ensures the
Company continues to meet its debt covenants and
reporting requirements. During the year, the Company
increased its revolving credit facility with RBS
International, RBC, Santander and Barclays by £200
million to £600 million, as disclosed in note 13 to the
financial statements.
49
G R E E N C O A T
U K W I N D
Corporate Governance Report continued
Engagement with Stakeholders continued
The Investment Manager conducts presentations with
analysts and investors to coincide with the
announcement of the Company’s full and half year
results, providing an opportunity for discussions and
queries on the Company’s activities, performance and
key metrics. In addition to these semi-annual
presentations, the Investment Manager meets
regularly with analysts and investors to provide further
updates with how the Company and the investment
portfolio are performing.
In October, the Investment Manager hosted a virtual
Capital Markets Event for investors and analysts on
active asset management and driving shareholder
value through generation optimisation. The webinar
and subsequent Q&A provided investors with the
opportunity to gain a better understanding of the
technical aspects of the Group’s wind farm portfolio
and the optimisation opportunities being explored and
implemented by the Investment Manager.
The Directors and Investment Manager receive
informal feedback from analysts and investors, which
is presented to the Board by the Company’s Joint
Brokers. The Company Secretary also receives informal
feedback via queries submitted through the
Company’s website and these are addressed by the
Board, the Investment Manager or the Company
Secretary, where applicable.
The Company recognises that relationships with
suppliers are enhanced by prompt payment and the
Company’s Administrator ensures all payments are
processed within the contractual terms agreed with the
individual suppliers.
The Company, via its Investment Manager, has long
term and important relationships with its operational
site managers and turbine operations and maintenance
managers and reviews performance, including health
and safety, on a monthly basis. Representatives of the
site manager and SPV board directors, from the
Investment Manager, visit all operational sites on a
regular basis and generally carry out safety walks at
least once a year on each site. The Board’s Health and
Safety Director also visits sites at regular intervals.
Similarly, environment protection issues are reported
on every month by the site managers and annual
habitat management plans are agreed by each SPV
board for all sites to ensure that the environment in
and surrounding each windfarm is carefully protected.
The Directors recognise that the long term success of
the Company is linked to the success of the
communities in which the Group, and its investee
companies, operate. During the year, a number of
community projects were supported by the Group’s
investee companies.
Key decisions made or approved by the Directors
during the year and the impact of those decisions on
the Company’s members and wider stakeholders is
disclosed further in the Strategic Report on page 21.
Shareholders may also find Company information or
contact the Company through its website.
On behalf of the Board
Shonaid Jemmett-Page
Chairman of the Board
23 February 2022
Langhope Rig
50
Greencoat UK Wind PLC Annual Report for the year ended 31 December 2021
At the date of this report, the Audit Committee
comprised Caoimhe Giblin (Chairman), William Rickett
C.B., Martin McAdam, Lucinda Riches C.B.E. and Nick
Winser. The AIC Code has a requirement that at least
one member of the Audit Committee should have
recent and relevant financial experience and the Audit
Committee as a whole shall have competence relevant
to the sector. The Board is satisfied that the Audit
Committee is properly constituted in these respects.
The qualifications and experience of all Audit
Committee members are disclosed on pages 34 to 36
of this report.
The Audit Committee operates within clearly defined
terms of reference which were reviewed during the
financial year and approved by the Board, and include
all matters indicated by Disclosure Guidance and
Transparency Rule 7.1 and the AIC Code and are
available for inspection on the Company’s website:
www.greencoat-ukwind.com. The Company’s Annual
Report complies with the provisions of the
Competition and Markets Authority’s (CMA) Order.
Audit Committee meetings are scheduled at
appropriate times in the reporting and auditing cycle.
The Chairman, other Directors and third parties may
be invited to attend meetings as and when deemed
appropriate.
Summary of the Role and Responsibilities of the
Audit Committee
The duties of the Audit Committee include reviewing
the Company’s quarterly NAV, half year report, Annual
Report and financial statements and any formal
announcements relating to the Company’s financial
performance.
The Audit Committee is the forum through which the
external Auditor reports to the Board and is
responsible for reviewing the terms of appointment of
the Auditor, together with their remuneration. On an
ongoing basis, the Audit Committee is responsible for
reviewing the objectivity of the Auditor along with the
effectiveness of the audit and the terms under which
the Auditor is engaged to perform non-audit services
(restricted to the limited scope review of the half year
report and reporting accountant services in relation to
equity raises). The Audit Committee is also responsible
for reviewing the Company’s corporate governance
framework, system of internal controls and risk
management, ensuring they are suitable for an
investment company.
The Audit Committee reports its findings to the Board,
identifying any matters on which it considers that
action or improvement is needed, and make
recommendations on the steps to be taken.
Overview
During the year, the Audit Committee’s discussions
have been broad ranging. In addition to the 4 formally
convened Audit Committee meetings during the year,
the Audit Committee has had regular contact and
meetings with the Investment Manager, the
Administrator and the Auditor. These meetings and
discussions focused on, but were not limited to:
• a detailed analysis of the Company’s quarterly
NAVs;
• reviewing the updated risk matrix of the Company,
including climate related reporting disclosures
under the TCFD framework;
• reviewing the Company’s corporate governance
framework, including climate related reporting
disclosures under the TCFD framework;
• reviewing the internal controls framework for the
Company, the Administrator and the Investment
Manager, considering the need for a separate
internal audit function;
• considering any incidents of internal control failure
or fraud and the Company’s response;
• considering the ongoing assessment of the
Company as a going concern;
• considering the principal risks and period of
assessment for the longer term viability of the
Company;
• monitoring the ongoing appropriateness of the
Company’s status as an investment entity under
IFRS 10, in particular following an acquisition;
• monitoring compliance with AIFMD, the AIC code
and other regulatory and governance frameworks;
• reviewing and approving the audit plan in relation
to the audit of the Company’s Annual Report and
financial statements;
• monitoring compliance with the Company’s policy
on the provision of non-audit services by the
Auditor; and
• reviewing the effectiveness, resources,
qualifications and independence of the Auditor.
Audit Committee Report
51
G R E E N C O A T
U K W I N D
Audit Committee Report continued
Financial Reporting
The primary role of the Audit Committee in relation to
financial reporting is to review with the Investment
Manager, the Administrator and the Auditor the
appropriateness of the half year report and Annual
Report and financial statements, concentrating on,
amongst other matters:
• the quality and acceptability of accounting policies
and practices;
• the clarity of the disclosures and compliance with
financial reporting standards and relevant financial
and governance reporting requirements;
• amendments to legislation and corporate
governance reporting requirements and
accounting treatment of new transactions in the
year;
• the impact of new and amended accounting
standards on the Company’s financial statements;
• whether the Audit Committee believes that
proper and appropriate processes and procedures
have been followed in the preparation of the half
year report and Annual Report and financial
statements;
• considering and recommending to the Board for
approval the contents of the annual financial
statements and reviewing the Auditor’s report
thereon including considering whether the
financial statements are overall fair, balanced and
understandable;
• material areas in which significant judgements
have been applied or there has been discussion
with the Auditor; and
• any correspondence from regulators in relation to
the Company’s financial reporting.
During the year, the Company received
correspondence from the FRC seeking a better
understanding of certain sections of the 2020 Annual
Report, specifically with respect to the portfolio’s
renewable energy subsidies and variable consideration
on forward committed acquisitions. The FRC also
provided minor disclosure recommendations to be
taken into account for future reports. The Audit
Committee, with assistance from the Investment
Manager and the Administrator, collaboratively
engaged with the FRC and their enquiries reached a
satisfactory conclusion.
The FRC’s review was based on reading the 2020
Annual Report alone with no prior knowledge of the
Group and its investments. It did not constitute an
independent assurance engagement or verify any
information provided in the 2020 Annual Report.
BDO LLP attended 3 of the 4 formal Audit Committee
meetings held during the year. The Audit Committee
has also held private meetings with the Auditor to
provide additional opportunities for open dialogue and
feedback. Matters typically discussed include the
Auditor’s assessment of the transparency and
openness of interactions with the Investment Manager
and the Administrator, confirmation that there has
been no restriction in scope placed on them, the
independence of their audit and how they have
exercised professional scepticism.
Significant Issues
The Audit Committee discussed the planning, conduct
and conclusions of the external audit as it proceeded.
At the Audit Committee meeting in advance of the
year end, the Audit Committee discussed and
approved the Auditor’s audit plan. The Audit
Committee identified the carrying value of investments
as a key area of risk of misstatement in the Company’s
financial statements.
Assessment of the Carrying Value of Investments
The Group has an accounting policy to designate
investments at fair value through profit or loss.
Therefore, the most significant risk in the Group’s
financial statements is whether its investments are fairly
valued due to the uncertainty involved in determining
the investment valuations. There is also an inherent risk
of management override as the Investment Manager’s
fee is calculated based on NAV, as disclosed in note 3
to the financial statements. The Investment Manager
is responsible for calculating the NAV with the
assistance of the Administrator, prior to approval by
the Board.
On a quarterly basis, the Investment Manager provides
a detailed analysis of the NAV highlighting any
movements and assumption changes from the
previous quarter’s NAV. This analysis and the rationale
for any changes made is considered and challenged by
the Chairman of the Audit Committee and
subsequently considered, challenged and approved by
the Board. The Audit Committee has satisfied itself
that the key estimates and assumptions used in the
valuation model are appropriate and that the
investments have been fairly valued. The key estimates
and assumptions include the useful life of the assets,
the discount rates, the level of wind resource, the rate
of inflation, the price at which the power and
associated benefits can be sold and the amount of
electricity the assets are expected to produce.
Greencoat UK Wind PLC Annual Report for the year ended 31 December 2021
52
Internal Control
The Audit Committee has established a set of ongoing
processes designed to meet the particular needs of the
Company in managing the risks to which it is exposed.
The process is one whereby the Investment Manager
has identified the principal risks to which the Company
is exposed, and recorded them on a risk matrix
together with the controls employed to mitigate these
risks, and has a process in place to identify emerging
risks and to determine whether any actions are
required. A residual risk rating has been applied to
each risk. The Audit Committee is responsible for
reviewing the risk matrix and associated controls
before recommending to the Board for consideration
and approval, challenging the Investment Manager’s
assumptions to ensure a robust internal risk
management process.
The Audit Committee considers risk and strategy
regularly, and formally reviewed the updated risk
matrix in Q1 2022 and will continue to do so at least
annually. By their nature, these procedures provide a
reasonable, but not absolute, assurance against
material misstatement or loss. Regular reports are
provided to the Audit Committee highlighting material
changes to risk ratings.
The Audit Committee reviewed the Group’s principal
risks and uncertainties as at 30 June 2021 to determine
that these were unchanged from those disclosed in the
Company’s 2020 Annual Report and remained the
most likely to affect the Group in the second half of
the year.
During the year, the Audit Committee discussed and
reviewed in depth the internal controls frameworks in
place at the Investment Manager and the Administrator.
Discussions were centred around 3 lines of defence:
assurances at operational level, internal oversight, and
independent objective assurance. The Administrator
holds the International Standard on Assurance
Engagements (ISAE) 3402 Type 2 certification. This
entails an independent rigorous examination and testing
of their controls and processes.
The Audit Committee concluded that these
frameworks were appropriate for the identification,
assessment, management and monitoring of financial,
regulatory and other risks, with particular regard to the
protection of the interests of the Company’s
shareholders.
Internal Audit
The Audit Committee continues to review the need for
an internal audit function and has decided that the
systems, processes and procedures employed by the
Company, Investment Manager and Administrator,
including their own internal controls and procedures,
provide sufficient assurance that an appropriate level
of risk management and internal control is maintained.
In addition to this, the Company’s external Depositary
provides cash monitoring, asset verification and
oversight services to the Company.
The Audit Committee has therefore concluded that
shareholders’ investments and the Company’s assets
are adequately safeguarded and an internal audit
function specific to the Company is considered
unnecessary.
The Audit Committee is available on request to meet
investors in relation to the Company’s financial
reporting and internal controls.
External Auditor
Effectiveness of the Audit Process
The Audit Committee assessed the effectiveness of the
audit process by considering BDO LLP’s fulfilment of
the agreed audit plan through the reporting presented
to the Audit Committee by BDO LLP and the
discussions at the Audit Committee meeting, which
highlighted the major issues that arose during the
course of the audit. In addition, the Audit Committee
also sought feedback from the Investment Manager
and the Administrator on the effectiveness of the audit
process. For this financial year, the Audit Committee
was satisfied that there had been appropriate focus
and challenge on the primary areas of audit risk and
assessed the quality of the audit process to be good.
Non-Audit Services
The Audit Committee has a policy regarding the
provision of non-audit services by the external Auditor.
The Audit Committee monitors the Group’s
expenditure on non-audit services provided by the
Company’s Auditor who should only be engaged for
non-audit services where they are deemed to be the
most commercially viable supplier and prior approval
of the Audit Committee has been sought.
Details of fees paid to BDO LLP during the year are
disclosed in note 5 to the financial statements. The
Audit Committee approved these fees after a review
of the level and nature of work to be performed, and
are satisfied that they are appropriate for the scope of
the work required. The Audit Committee seeks to
ensure that any non-audit services provided by the
external Auditor do not conflict with their statutory and
regulatory responsibilities, as well as their
independence, before giving written approval prior to
their engagement. The Audit Committee was satisfied
that provision of these non-audit services did not
provide threats to the Auditor’s independence.
Audit Committee Report continued
G R E E N C O A T
U K W I N D
53
Audit Committee Report continued
External Auditor continued
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.
During the year, the Audit Committee were notified by
BDO LLP of a breach of auditor independence detailed
in their Independent Audit report on page 54.
Notwithstanding the identified this independence
breach, the Audit Committee has concluded that it
considers BDO LLP to be independent of the Company
and that the provision of the non-audit services
described above is not a threat to the objectivity and
independence of the conduct of the audit.
Re-appointment
BDO LLP has been the Company’s Auditor from its
incorporation on 4 December 2012. The Auditor is
required to rotate the audit partner responsible for the
Group audit every 5 years. A new lead partner was
appointed in the prior year and therefore the lead
partner will be required to rotate after the completion
of the 2024 year end audit.
The external audit contract is required to be put to
tender at least every 10 years. The Audit Committee
intends to commence an external audit appointment
tender in the coming year for the year ended
31 December 2023. The Audit Committee has
considered the re-appointment of the Auditor and
decided not to put the provision of the external audit
out to tender for the year ending 31 December 2022.
As described above, the Audit Committee reviewed
the effectiveness and independence of the Auditor and
remains satisfied that the Auditor provides effective
independent challenge to the Board, the Investment
Manager and the Administrator. The Audit Committee
will continue to monitor the performance of the
Auditor on an annual basis and will consider their
independence and objectivity, taking account of
appropriate guidelines.
The Audit Committee has therefore recommended to
the Board that BDO LLP be proposed for re-
appointment as the Company’s Auditor at the 2022
AGM of the Company.
Caoimhe Giblin
Chairman of the Audit Committee
23 February 2022
Stronelairg
Greencoat UK Wind PLC Annual Report for the year ended 31 December 2021
54
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 affairs as at 31 December 2021
and of the Group’s profit for the year then ended;
• The Group’s financial statements have been properly prepared in accordance with United Kingdom adopted
international accounting standards ;
• The Parent Company’s financial statements have been properly prepared in accordance with United Kingdom
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 2021 which comprise the Consolidated Statement of Comprehensive
Income, the Consolidated Statement of Financial Position, the Company Statement of Financial Position, the
Consolidated and Company Statement of Changes in Equity, the Consolidated Statement of Cash Flows, the
Company Statement of Cash Flows and the notes to the financial statements, including a summary of significant
accounting policies. The financial reporting framework that has been applied in the preparation of the financial
statements is applicable law and United Kingdom adopted international accounting standards and as regards the
Parent Company financial statements, as applied in accordance with the provisions 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 re-appointed by the members on 28 April 2021
to audit the financial statements for the year ending 31 December 2021 and subsequent financial periods. The
period of total uninterrupted engagement including retenders and reappointments is 9 years, covering the years
ended 31 December 2013 to 31 December 2021.
During the year it was identified that BDO provided a registered office service to 5 unconsolidated subsidiaries of
Greencoat UK Wind plc. The provision of a registered office is not a permitted service which can be provided to Public
Interest Entities under paragraph 5.40 of the FRC Ethical Standard. The fees charged for each subsidiary was £250
per entity per annum which is insignificant to the audit fee for Greencoat UK Wind plc. These services were transferred
to a new provider from 14th January 2022. We have assessed the threats to independence arising from the provision
of registered office services and, in our opinion, we do not consider that our independence has been compromised
as a result of the breach of the FRC Ethical Standard. The audit committee have concurred with this view.
Other than the matter noted above, the non-audit services prohibited by the FRC Ethical Standard were not
provided to the Group.
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 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;
Independent Auditor’s Report
G R E E N C O A T
U K W I N D
55
Conclusions relating to going concern continued
• We have reviewed and challenged the inputs in the stress testing of extreme downside scenarios and cash
flow forecasts prepared by management and recalculated, Group and Parent Company’s liquidity position;
• We have reviewed the loan agreements and checked that maturity life of each one of them is reasonable and
adherence of 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.
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 or 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.
Overview
Coverage* 100% (2020: 100%) of Group profit before tax
100% (2020: 100%) of Group revenue
100% (2020: 100%) of Group total assets
Key audit matters 2021 2020
Valuation of investments Yes Yes
Materiality Group’s financial statements as a whole
£46.4m (2020: £33.4m) based on 1.5% (2020: 1.5%) of net assets.
Specific Materiality
Materiality for items impacting on the realised return was £10.4m (2020: £9.6m) based
on 5% (2020: 10%) of profit before tax, excluding the unrealised valuation movements.
* % coverage of Group components subject to a full scope audit by BDO LLP
An overview of the 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.
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. This matter was 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 this matter.
Independent Auditor’s Report continued
56
Greencoat UK Wind PLC Annual Report for the year ended 31 December 2021
Key audit matters continued
Key audit matter How the scope of our audit addressed the key audit matter
Valuation of
Investments
(See note 1,
note 9 and
accounting policy
on pages 70
and 77)
100% of the underlying
investment portfolio is
represented by unquoted
equity and loan investments
and all investments are
individually material to the
financial statements.
The valuation of investments
is calculated using discounted
cash flow models. This is a
highly subjective accounting
estimate where there is
an inherent risk of bias
arising from the investment
valuations being prepared by
the Investment Manager, who
is remunerated based on
the net asset value of the
company.
These estimates include
judgements including future
power prices, wind
generation, discount rates,
asset lives and inflation.
In respect of the equity investments valued using discounted
cash flow models, we performed the following specific
procedures:
• Used spreadsheet analysis tools to assess the integrity of
the valuation models and track changes to inputs or
structure from the valuation model in the prior year.
• Agreed wind generation and power price forecasts to
independent reports prepared by a third-party expert
engaged by management. We have assessed
Independence, objectivity and competence of the expert.
• For new investments we obtained and reviewed
agreements and contracts and considered whether these
were accurately reflected in the valuation model.
• For existing investments, we analysed changes in
significant assumptions compared with assumptions
audited in previous periods and vouched these to
independent evidence including available industry data.
• Challenged the appropriateness of the selection and
application of key assumptions in the model including the
discount rate, inflation, asset life, energy yield and power
price applied by benchmarking to available industry data
and consulting with our internal valuations specialists.
• Reviewed the corporation tax workings within the
valuation model and considered whether these had been
modelled accurately in the context of current corporation
tax legislation and rates.
• Agreed cash and other net assets to bank statements and
investee company management accounts.
• Considered the accuracy of forecasting by comparing
previous forecasts to actual results.
For loan investments we performed the following:
• Vouched to loan agreements and verified the terms of the
loan
• Considered the carrying value of the loan with regard to
the “unit of account” concept.
For each of the key assumptions in the valuation models, we
considered the appropriateness of the assumption and
whether alternative reasonable assumptions could have been
applied. We considered each assumption in isolation as well as
in conjunction with other assumptions and the valuation as a
whole. Where appropriate, we sensitised the valuations where
other reasonable alternative assumptions could have been
applied. We also considered the completeness and clarity of
disclosures regarding the range of reasonable alternative
assumptions in the financial statements.
Key observations
Based on our procedures performed we found the valuation
estimates and Judgements were within an acceptable range.
Independent Auditor’s Report continued
57
G R E E N C O A T
U K W I N D
Our application of materiality
We apply the concept of materiality both in planning and performing our audit, and in evaluating the effect of
misstatements. We consider materiality to be the magnitude by which misstatements, including omissions, could
influence the economic decisions of reasonable users that are taken on the basis of the financial statements.
In order to reduce to an appropriately low level the probability that any misstatements exceed materiality, we use
a lower materiality level, performance materiality, to determine the extent of testing needed. Importantly,
misstatements below these levels will not necessarily be evaluated as immaterial as we also take account of the
nature of identified misstatements, and the particular circumstances of their occurrence, when evaluating their
effect on the financial statements as a whole.
Based on our professional judgement, we determined materiality for the financial statements as a whole and
performance materiality as follows:
Group financial statements Parent company financial statements
2021 2020 2021 2020
£m £m £m £m
Materiality
Basis for determining materiality
Performance materiality
Specific materiality
We also determined that for items impacting realised return, 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% (2020:10%) of profit before tax, excluding unrealised
valuation movements. We further applied a performance materiality level of 75% (2020:75%) of specific materiality
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% Group materiality based 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 is set
at £44.1m. In the audit of each significant component, we further applied performance materiality levels of 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
£928k (2020: £660k). We also agreed to report differences below this threshold that, in our view, warranted
reporting on qualitative grounds.
Basis for determining
performance materiality
75% materiality
Risk assessment of control environment and consideration of number of
historical errors identified
34.8 25.0 33.1 23.4
Rationale for the benchmark
applied
Net assets are considered to be the
benchmark of most interest to the
users of the financial statements in
understanding the financial position
of the group as an investor in UK
wind farms.
To manage the aggregation risk we
have reduced the materiality for both
components to 95%
1.5% net assets 1.5% net assets 95% Group
materiality
95% Group
materiality
46.4 33.4 44.1 31.2
Independent Auditor’s Report continued
58
Greencoat UK Wind PLC Annual Report for the year ended 31 December 2021
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 Statement specified for our review.
Based on the work undertaken as part of our audit, we have concluded that each of the following elements of
the Corporate Governance Statement is materially consistent with the financial statements or our knowledge
obtained during the audit.
• The Directors’ statement with regards to the appropriateness of adopting
the going concern basis of accounting and any material uncertainties
identified, set out on page 24; and
• The Directors’ explanation as to its assessment of the entity’s prospects, the
period this assessment covers and why the period is appropriate set out on
page 24.
• Directors’ statement on fair, balanced and understandable set out on
page 38
• Board’s confirmation that it has carried out a robust assessment of the
emerging and principal risks set out on page 22;
• The section of the annual report that describes the review of effectiveness of
risk management and internal control systems set out on page 52; and
• The section describing the work of the audit committee set out on pages
50 to 53.
Other Code provisions
Going concern and longer-
term viability
Independent Auditor’s Report continued
59
G R E E N C O A T
U K W I N D
Other Companies Act 2006 reporting
Based on the responsibilities described below and our work performed during the course of the audit, we are
required by the Companies Act 2006 and ISAs (UK) to report on certain opinions and matters as described below.
In our opinion, based on the work undertaken in the course of the audit:
• the information given in the Strategic report and the Directors’ report for
the financial year for which the financial statements are prepared is consistent
with the financial statements; and
• the Strategic report and the Directors’ report have been prepared in
accordance with applicable legal requirements.
In the light of the knowledge and understanding of the Company and its
environment obtained in the course of the audit, we have not identified material
misstatements in the strategic report or the Directors’ report.
In our opinion, the part of the Directors’ remuneration report to be audited has
been properly prepared in accordance with the Companies Act 2006.
We have nothing to report in respect of the following matters in relation to which
the Companies Act 2006 requires us to report to you if, in our opinion:
• adequate accounting records have not been kept by the Parent Company, or
returns adequate for our audit have not been received from branches not
visited by us; or
• the Parent Company’s 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.
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:
Matters on which we are
required to report by
exception
Directors’ remuneration
Strategic Report and
Report of the Directors
Independent Auditor’s Report continued
60
Greencoat UK Wind PLC Annual Report for the year ended 31 December 2021
Extent to which the audit was capable of detecting irregularities, including fraud continued
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 company which were contrary to applicable laws and
regulations, including fraud. These included but were not limited to compliance with Companies Act 2006, the FCA
listing and DTR rules, the principles of the UK Corporate Governance Code, requirement of s.1158 of the Corporation
Tax Act, and applicable accounting standards. We also considered the risk that the valuation of the investment
portfolio was subject to bias from the Investment Manager, as described in the Key Audit Matter section above.
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
• Review of minutes of board meetings throughout the period.
We assessed the susceptibility of the financial statements to material misstatement including fraud and considered
the key fraud risk areas to be the valuation of investments and management override of controls.
Our tests included, but were not limited to:
• The procedures set out in the Key Audit Matters section above;
• Obtaining independent evidence to support the ownership of investments;
• Recalculating the investment management fees in total;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.
We also communicated relevant identified laws and regulations and potential fraud risks to all engagement team
members 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 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, United Kingdom
23 February 2022
BDO LLP is a limited liability partnership registered in England and Wales (with registered number OC305127).
Independent Auditor’s Report continued
61
G R E E N C O A T
U K W I N D
For the year ended For the year ended
31 December 2021 31 December 2020
Note £’000 £’000
Return on investments 4 421,683 154,304
Other income 1,788 1,086
Total income and gains 423,471 155,390
Operating expenses 5 (26,258 ) (20,990 )
Investment acquisition costs (3,305 ) (8,025 )
Operating profit 393,908 126,375
Finance expense 13 (30,689 ) (21,368 )
Profit for the year before tax 363,219 105,007
Tax 6— (612 )
Profit for the year after tax 363,219 104,395
Profit and total comprehensive income attributable to:
Equity holders of the Company 363,219 104,395
Earnings per share
Basic and diluted earnings from continuing operations
in the year (pence) 7 18.30 6.55
Consolidated Statement of Comprehensive Income
For the year ended 31 December 2021
The accompanying notes on pages 67 to 95 form an integral part of the financial statements.
62
Greencoat UK Wind PLC Annual Report for the year ended 31 December 2021
31 December 2021 31 December 2020
Note £’000 £’000
Non current assets
Investments at fair value through profit or loss 9 4,042,545 3,329,768
Current assets
Receivables 11 2,632 634
Cash and cash equivalents 4,801 7,888
Current liabilities
Payables 12 (6,279 ) (8,417 )
Net current assets 1,154 105
Non current liabilities
Loans and borrowings 13 (950,000 ) (1,100,000 )
Net assets 3,093,699 2,229,873
Capital and reserves
Called up share capital 15 23,171 18,241
Share premium account 15 2,468,940 1,834,477
Retained earnings 601,588 377,155
Total shareholders’ funds 3,093,699 2,229,873
Net assets per share (pence) 16 133.5 122.2
Authorised for issue by the Board of Greencoat UK Wind PLC (registered number 08318092) on 23 February
2022 and signed on its behalf by:
Shonaid Jemmett-Page Caoimhe Giblin
Chairman Director
Consolidated Statement of Financial Position
As at 31 December 2021
The accompanying notes on pages 67 to 95 form an integral part of the financial statements.
63
G R E E N C O A T
U K W I N D
31 December 2021 31 December 2020
Note £’000 £’000
Non current assets
Investments at fair value through profit or loss 9 4,046,365 3,332,430
4,046,365 3,332,430
Current assets
Receivables 11 107 143
Cash and cash equivalents 1,875 1,212
1,982 1,355
Current liabilities
Payables 12 (4,648) (3,912)
Net current liabilities (2,666) (2,557)
Non current liabilities
Loans and borrowings 13 (950,000) (1,100,000)
Net assets 3,093,699 2,229,873
Capital and reserves
Called up share capital 15 23,171 18,241
Share premium account 15 2,468,940 1,834,477
Retained earnings 601,588 377,155
Total shareholders’ funds 3,093,699 2,229,873
Net assets per share (pence) 16 133.5 122.2
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 £363,219,000 (2020: £104,395,000).
Authorised for issue by the Board on 23 February 2022 and signed on its behalf by:
Shonaid Jemmett-Page Caoimhe Giblin
Chairman Director
Statement of Financial Position – Company
As at 31 December 2021
The accompanying notes on pages 67 to 95 form an integral part of the financial statements.
64
Greencoat UK Wind PLC Annual Report for the year ended 31 December 2021
Share Share Retained
capital premium earnings Total
For the year ended 31 December 2021 Note £’000 £’000 £’000 £’000
Opening net assets attributable to
shareholders (1 January 2021) 18,241 1,834,477 377,155 2,229,873
Issue of share capital 15 4,930 644,188 — 649,118
Share issue costs 15 — (9,725 ) — (9,725 )
Profit and total comprehensive income for the year — — 363,219 363,219
Interim dividends paid in the year 8— — (138,786 ) (138,786 )
Closing net assets attributable to shareholders 23,171 2,468,940 601,588 3,093,699
After taking account of cumulative unrealised gains of £267,346,624, the total reserves distributable by way of a
dividend as at 31 December 2021 were £334,240,317.
Share Share Retained
capital premium earnings Total
For the year ended 31 December 2020 Note £’000 £’000 £’000 £’000
Opening net assets attributable to
shareholders (1 January 2020) 15,175 1,442,218 385,373 1,842,766
Issue of share capital 15 3,066 398,434 — 401,500
Share issue costs 15 — (6,175 ) — (6,175 )
Profit and total comprehensive income for the year — — 104,395 104,395
Interim dividends paid in the year 8— — (112,613 ) (112,613 )
Closing net assets attributable to shareholders 18,241 1,834,477 377,155 2,229,873
After taking account of cumulative unrealised gains of £111,795,120, the total reserves distributable by way of a
dividend as at 31 December 2020 were £265,359,188.
Consolidated and Company Statement of Changes in Equity
For the year ended 31 December 2021
The accompanying notes on pages 67 to 95 form an integral part of the financial statements.
65
G R E E N C O A T
U K W I N D
For the year ended For the year ended
31 December 2021 31 December 2020
Note £’000 £’000
Net cash flows from operating activities 17 242,261 123,083
Cash flows from investing activities
Acquisition of investments 9 (565,957 ) (914,106 )
Investment acquisition costs (6,263 ) (3,541 )
Repayment of shareholder loan investments 9 8,731 17,307
Net cash flows from investing activities (563,489 ) (900,340 )
Cash flows from financing activities
Issue of share capital 15 647,618 400,000
Payment of issue costs (9,715 ) (6,175 )
Amounts drawn down on loan facilities 13 110,000 880,000
Amounts repaid on loan facilities 13 (260,000 ) (380,000 )
Finance costs (30,976 ) (20,784 )
Dividends paid 8 (138,786 ) (112,613 )
Net cash flows from financing activities 318,141 760,428
Net decrease in cash and cash equivalents during the year (3,087 ) (16,829 )
Cash and cash equivalents at the beginning of the year 7,888 24,717
Cash and cash equivalents at the end of the year 4,801 7,888
Consolidated Statement of Cash Flows
For the year ended 31 December 2021
The accompanying notes on pages 67 to 95 form an integral part of the financial statements.
66
Greencoat UK Wind PLC Annual Report for the year ended 31 December 2021
For the year ended For the year ended
31 December 2021 31 December 2020
Note £’000 £’000
Net cash flows from operating activities 17 (21,668) (738)
Cash flows from investing activities
Loans advanced to Group companies 9 (499,800) (893,046)
Repayment of loans to Group companies 9 203,990 133,994
Net cash flows from investing activities (295,810) (759,052)
Cash flows from financing activities
Issue of share capital 15 647,618 400,000
Payment of issue costs (9,715) (6,175)
Amounts drawn down on loan facilities 13 110,000 880,000
Amounts repaid on loan facilities 13 (260,000) (380,000)
Finance costs (30,976) (20,784)
Dividends paid 8 (138,786) (112,613)
Net cash flows from financing activities 318,141 760,428
Net increase in cash and cash equivalents during the year 663 638
Cash and cash equivalents at the beginning of the year 1,212 574
Cash and cash equivalents at the end of the year 1,875 1,212
Statement of Cash Flows – Company
For the year ended 31 December 2021
The accompanying notes on pages 67 to 95 form an integral part of the financial statements.
67
G R E E N C O A T
U K W I N D
1. Significant 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.
On 31 December 2020, IFRS as adopted by the European Union at that date was brought into the UK law and
became UK adopted international accounting standards, with future changes being subject to endorsement by
the UK Endorsement Board. The Group and the Company transitioned to UK adopted international accounting
standards in its consolidated financial statements on 1 January 2021. There was no impact or changes in
accounting from the transition.
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 22 to 24. 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.
The Group continues to meet day-to-day liquidity needs through its cash resources.
As at 31 December 2021, the Group had net current assets of £1.2 million (2020: £0.1 million), which included
cash balances of £4.8 million (2020: £7.9 million) (excluding cash balances within investee companies), which are
sufficient to meet current obligations as they fall due. The major cash outflows of the Group are the payment of
dividends and costs relating to the acquisition of new assets, both of which are discretionary. The Directors are
confident that the Group has sufficient access to debt, including its revolving credit facility, as well as equity
markets in order to fund commitments to acquisitions and meet the contingent liabilities detailed in note 14 to
the financial statements, should they become payable.
The Company had £950 million (2020: £1,100 million) of outstanding debt as at 31 December 2021, with £350
million available to borrow under its 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.
In the period since 2021 and up to the date of this report, the outbreak of COVID-19 has had a significant impact
on the global economy. The Directors and Investment Manager are actively monitoring this and its potential
effect on the Group and its SPVs. In particular, they have considered the following specific key potential impacts:
• Unavailability of key personnel at the Investment Manager or Administrator;
• Disruptions to maintenance or repair at the investee company level; and
• Allowance for counterparty credit losses.
In considering the above key potential impacts of COVID-19 on the Group and SPV operations, the Directors have
assessed these with reference to the mitigation measures in place. At the Group level, the key personnel at the
Investment Manager and Administrator have successfully implemented business continuity plans to ensure
business disruption is minimised, including remote working, and all staff are continuing to assume their day-to-
day responsibilities.
Notes to the Consolidated Financial Statements
For the year ended 31 December 2021
68
Greencoat UK Wind PLC Annual Report for the year ended 31 December 2021
1. Significant accounting policies continued
Going concern continued
SPV revenues are derived from the sale of electricity, and although approximately 62 per cent of the portfolio’s
revenue in 2021 was exposed to the floating power price, revenue is received through power purchase
agreements in place with large and reputable providers of electricity to the market and also through government
subsidies. In the period since 2021 and up to the date of this report, there has been no significant impact on
revenue and cash flows of the SPVs. The SPVs have contractual operating and maintenance agreements in place
with large and reputable providers. Therefore, the Directors and the Investment Manager do not anticipate a
threat to the Group’s revenue.
Wind farm availability has not been significantly affected: wind farms may be accessed and operated remotely in
some instances; otherwise social distancing has been possible in large part and personal protective equipment
has been used where not possible, for instance where major component changes have been necessary. The
Investment Manager is confident that there are appropriate continuity plans in place at each provider to ensure
that the underlying wind farms are maintained appropriately and that any faults would continue to be addressed
in a timely manner.
Based on the assessment outlined above, including the various risk mitigation measures in place, the Directors
do not consider that the effects of COVID-19 have created a material uncertainty over the assessment of the
Group as a going concern.
The Directors have reviewed Group forecasts and projections which cover a period of at least 12 months from the
date of approval of this report, taking into account foreseeable changes in investment and trading performance,
which show that the Group has sufficient financial resources to continue in operation for at least the next 12
months from the date of approval of this report.
On the basis of this review, 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 for at least up to February
2023. Accordingly, they continue to adopt the going concern basis in preparing the financial statements.
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.
Notes to the Consolidated Financial Statements continued
For the year ended 31 December 2021
69
G R E E N C O A T
U K W I N D
1. Significant accounting policies continued
Accounting for subsidiaries continued
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
There were no new standards or interpretations effective for the first time for periods beginning on or after
1 January 2021 that had a significant effect on the Group’s or Company’s financial statements. However, the
Group has applied the following amendments for the first time for their annual reporting period commencing
1 January 2021:
• Interest Rate Benchmark Reform – Phase 2 – amendments to IFRS 9, IAS 39 and IFRS 7. The reference rate
of the Company’s loans was amended from LIBOR to SONIA with effect from November 2021. There was no
material impact of the introduction of this standard in the year.
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 mandatory for future accounting periods.
Effective for accounting periods beginning on or after 1 January 2022:
• a number of narrow-scope amendments to IFRS 3 “Business combinations”, IAS 16 “Property, plant and
equipment”, IAS 37 “Provisions, contingent liabilities and contingent assets” and annual improvements on
IFRS 1 “First-time Adoption of IFRS”, IFRS 9 “Financial instruments”, IAS 41 “Agriculture” and the Illustrative
Examples accompanying IFRS 16 “Leases”.
Effective for accounting periods beginning on or after 1 January 2023:
• Narrow-scope amendments to IAS 1 “Presentation of Financial Statements”, Practice statement 2 and IAS 8
“Accounting Policies, Changes in Accounting Estimates and Errors”.
• Amendments to IAS 12, ”Income Taxes” – deferred tax related to assets and liabilities arising from a single
transaction.
• Amendments to IFRS 17, “Insurance contracts” – this standard replaces IFRS 4, which currently permits a
wide variety of practices in accounting for insurance contracts.
Effective for accounting periods beginning on or after 1 January 2024:
• Amendments to IAS 1 on classification of liabilities clarify that liabilities are classified as either current or non-
current, depending on the rights that exist at the end of the reporting period.
The impact of these standards is not expected to be material to the reported results and financial position of
the Group.
Notes to the Consolidated Financial Statements continued
For the year ended 31 December 2021
70
Greencoat UK Wind PLC Annual Report for the year ended 31 December 2021
1. Significant accounting policies continued
New and amended standards and interpretations not applied continued
Other accounting standards and interpretations have been published and will be mandatory for the Company’s
accounting periods beginning on or after 1 January 2022 or later periods. 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 2021 and 2020 the carrying amounts of cash and cash equivalents, 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 loans and receivables.
Loans and receivables at amortised cost
Impairment provisions for loans and 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 held 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 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.
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.
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 an unlevered, discounted cash flow basis in accordance
with IFRS 13 and IFRS 9.
Derecognition of financial assets
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.
Notes to the Consolidated Financial Statements continued
For the year ended 31 December 2021
71
G R E E N C O A T
U K W I N D
1. Significant accounting policies continued
Financial instruments continued
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. In the event that an amendment to a loan
agreement leads to a 10 per cent or greater change in the net present value of all future cash flows payable
under that agreement, then this is considered a substantial modification under IFRS 9 and accounted for as an
extinguishment of the original financial liability and the recognition of new financial liability. Any unamortised
costs in relation to the prior loan agreement are expensed through the profit or loss account in the period in
which the substantial modification occurred. 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.
The Group’s other financial liabilities measured at amortised cost include trade and other payables and other
short term monetary liabilities which are initially recognised at fair value and subsequently measured at amortised
cost using the effective interest rate method.
A financial liability (in whole or in part) is derecognised when the Group has extinguished its contractual
obligations, it expires or is cancelled. Any gain or loss on derecognition is taken to the Consolidated Statement
of Comprehensive Income.
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.
Cash and cash equivalents
Cash and cash equivalents comprise cash balances, deposits held on call with banks and other short-term highly
liquid deposits with original maturities of 3 months or less, that are readily convertible to a known amount of
cash and are subject to an insignificant risk of changes in value.
Foreign currencies
Transactions in foreign currencies are translated at the foreign exchange rate ruling at the date of the transaction.
Monetary assets and liabilities denominated in foreign currencies at the reporting date are translated at the
foreign exchange rate ruling at that date. Foreign exchange differences arising on translation are recognised in
the Consolidated Statement of Comprehensive Income.
Dividends
Dividends payable are recognised as distributions in the financial statements when the Company’s obligation to
make payment has been established.
Income recognition
Dividend income and interest income on shareholder loan investments are recognised when the Group’s
entitlement to receive payment is established.
Other income is accounted for on an accruals basis using the effective interest rate method.
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.
Notes to the Consolidated Financial Statements continued
For the year ended 31 December 2021
72
Greencoat UK Wind PLC Annual Report for the year ended 31 December 2021
1. Significant accounting policies continued
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.
Payment received or receivable from the Group or Group-owned SPVs for losses surrendered are recognised in
the financial statements and form part of the tax credit. In some situations, it might not be appropriate to
recognise the tax credit until the Group’s and Group-owned SPVs’ tax affairs have been finalised and the losses
elections have been made.
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.
Deferred tax is the tax expected to be payable or recoverable on temporary differences between the carrying
amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the
computation of taxable profit. Deferred tax liabilities are generally recognised for all taxable temporary differences
and deferred tax assets are recognised to the extent that it is probable that taxable profits will be available against
which deductible temporary differences can be utilised.
Deferred tax assets and liabilities are not recognised if the temporary differences arise from goodwill or from the
initial recognition of other assets and liabilities in a transaction that affects neither the tax profit or the accounting
profit. Deferred tax liabilities are recognised for taxable temporary differences arising on investments, except
where the Group is able to control the timing of the reversal of the difference and it is probable that the temporary
difference will not reverse in the foreseeable future. Deferred tax is calculated at the tax rates that are expected
to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited to
the Consolidated Statement of Comprehensive Income except when it relates to items charged or credited
directly to equity, in which case the deferred tax is also dealt with in equity.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off tax assets against
tax liabilities and when they relate to income taxes levied by the same taxation authority and the Group intends
to settle its current tax assets and liabilities on a net basis. Deferred tax assets and liabilities are not discounted.
Segmental reporting
Operating segments are reported in a manner consistent with the internal reporting provided to the chief
operating decision-maker. The chief operating decision-maker, who is responsible for allocating resources and
assessing performance of the operating segments, has been identified as the Board, as a whole. The key measure
of performance used by the Board to assess the Group’s performance and to allocate resources is the total return
on the Group’s net assets, as calculated under IFRS, and therefore no reconciliation is required between the
measure of profit or loss used by the Board and that contained in the financial statements.
For management purposes, the Group is organised into one main operating segment, which invests in wind
farm assets.
All of the Group’s income is generated within the UK.
All of the Group’s non-current assets are located in the UK.
Notes to the Consolidated Financial Statements continued
For the year ended 31 December 2021
73
G R E E N C O A T
U K W I N D
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.
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 79.
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 annually 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 which take the form of specialist consultancy reports, which reflect 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 crystalise as a
result of these guarantees or counter-indemnities.
Notes to the Consolidated Financial Statements continued
For the year ended 31 December 2021
74
Greencoat UK Wind PLC Annual Report for the year ended 31 December 2021
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; and
• on that part of the then most recently announced NAV over £1,000 million, an amount equal to 0.2 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.
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 For the year ended
31 December 2021 31 December 2020
£’000 £’000
Cash Fee 21,906 16,900
Equity Element 1,500 1,500
23,406 18,400
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.
4. Return on investments
For the year ended For the year ended
31 December 2021 31 December 2020
£’000 £’000
Dividends received (note 19) 226,328 123,748
Unrealised movement in fair value of investments (note 9) 155,551 9,763
Interest on shareholder loan investment received (note 19) 39,804 20,793
421,683 154,304
Notes to the Consolidated Financial Statements continued
For the year ended 31 December 2021
75
G R E E N C O A T
U K W I N D
5. Operating expenses
For the year ended For the year ended
31 December 2021 31 December 2020
£’000 £’000
Management fees (note 3) 23,406 18,400
Group and SPV administration fees 857 811
Non-executive Directors’ fees 320 308
Other expenses 1,521 1,357
Fees to the Company’s Auditor:
for audit of the statutory financial statements 150 110
for other audit related services 44
26,258 20,990
The fees to the Company’s Auditor for the year ended 31 December 2021 include £3,900 (2020: £3,800) payable
in relation to a limited review of the half year report. In addition to the above, during the year ended 31 December
2021 BDO LLP was paid £36,000 (2020: £23,000) in relation to capital raises of the Company which was included
in share issue costs. Total fees payable to BDO LLP for non-audit services during the year were £39,900
(2020: £26,800).
6. Taxation
For the year ended For the year ended
31 December 2021 31 December 2020
£’000 £’000
UK Corporation Tax charge — 612
— 612
The tax charge for the year shown in the Statement of Comprehensive Income is lower than the standard rate of
corporation tax of 19 per cent (2020: 19 per cent). The differences are explained below.
For the year ended For the year ended
31 December 2021 31 December 2020
£’000 £’000
Profit for the year before taxation 363,219 105,007
Profit for the year multiplied by the standard rate of
corporation tax of 19 per cent (2020: 19 per cent) 69,012 19,951
Fair value movements (not subject to taxation) (30,389) (1,855)
Dividends received (not subject to taxation) (43,002) (23,512)
Expenditure not deductible for tax purposes 628 1,525
Surrendering of tax losses to unconsolidated subsidiaries
for nil consideration 3,994 3,891
Other net tax deductions (243) —
Payments for prior year losses surrendered — 612
Total tax credit — 612
On 3 March 2021 as part of the Spring Budget announcement, the UK Government announced that the
corporation tax rate will increase from 19 per cent to 25 per cent (for companies with profits over £250,000),
from 1 April 2023.
Notes to the Consolidated Financial Statements continued
For the year ended 31 December 2021
76
Greencoat UK Wind PLC Annual Report for the year ended 31 December 2021
7. Earnings per share
For the year ended For the year ended
31 December 2021 31 December 2020
Profit attributable to equity holders of the Company – £’000 363,219 104,395
Weighted average number of ordinary shares in issue 1,984,849,617 1,594,127,083
Basic and diluted earnings from continuing operations
in the year (pence) 18.30 6.55
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.
8. Dividends declared with respect to the year
Dividend Total
per share dividend
Interim dividends paid during the year ended 31 December 2021 pence £’000
With respect to the quarter ended 31 December 2020 1.775 32,384
With respect to the quarter ended 31 March 2021 1.795 35,462
With respect to the quarter ended 30 June 2021 1.795 35,467
With respect to the quarter ended 30 September 2021 1.795 35,473
7.160 138,786
Dividend Total
per share dividend
Interim dividends declared after 31 December 2021 and not accrued in the year pence £’000
With respect to the quarter ended 31 December 2021 1.795 41,596
1.795 41,596
On 24 January 2022, the Company announced a dividend of 1.795 pence per share with respect to the quarter
ended 31 December 2021, bringing the total dividend declared with respect to the year to 31 December 2021
to £148.0 million, equivalent to 7.18 pence per share. The record date for the dividend is 11 February 2022 and
the payment date is 25 February 2022.
The following table shows dividends paid in the prior year.
Dividend Total
per share dividend
Interim dividends paid during the year ended 31 December 2020 pence £’000
With respect to the quarter ended 31 December 2019 1.735 26,335
With respect to the quarter ended 31 March 2020 1.775 26,947
With respect to the quarter ended 30 June 2020 1.775 26,953
With respect to the quarter ended 30 September 2020 1.775 32,378
7.060 112,613
Notes to the Consolidated Financial Statements continued
For the year ended 31 December 2021
77
G R E E N C O A T
U K W I N D
9. Investments at fair value through profit or loss
Loans Equity interest Total
Group – for the year ended 31 December 2021 £’000 £’000 £’000
Opening balance 607,956 2,721,812 3,329,768
Additions 328,906 237,051 565,957
Repayment of shareholder loan investments (8,731) — (8,731)
Unrealised movement in fair value of investments (note 4) (3,383) 158,934 155,551
924,748 3,117,797 4,042,545
Loans Equity interest Total
Group – for the year ended 31 December 2020 £’000 £’000 £’000
Opening balance 360,698 2,062,508 2,423,206
Additions 208,952 705,154 914,106
Repayment of shareholder loan investments (17,307) — (17,307)
Restructure of shareholder loan investments
(1)
50,500 (50,500) —
Unrealised movement in fair value of investments (note 4) 5,113 4,650 9,763
607,956 2,721,812 3,329,768
(1)
The Group’s investment in Corriegarth was restructured during the prior year. The Group’s equity interest decreased by £50,499,818 and
its shareholder loan balance increased by an equivalent amount.
The unrealised movement in fair value of investments of the Group during the year and the prior year was made
up as follows:
For the year ended For the year ended
31 December 2021 31 December 2020
£’000 £’000
Increase/(decrease) in portfolio valuation 116,628 (31,935)
Repayment of shareholder loan investments (note 19) 8,731 17,307
Movement in cash balances of SPVs 26,366 24,391
Windy Rig capital expenditure and Glen Kyllachy working capital 3,826 —
155,551 9,763
The movement in investments of the Company during the year and the prior year was made up as follows:
Loans Equity interest Total
Company – for the year ended 31 December 2021 £’000 £’000 £’000
Opening balance 2,134,956 1,197,474 3,332,430
Loan advanced to Holdco (note 19) 499,800 — 499,800
Repayment of loan to Holdco (note 19) (203,990) — (203,990)
Unrealised movement in fair value of investments — 418,125 418,125
2,430,766 1,615,599 4,046,365
Loans Equity interest Total
Company – for the year ended 31 December 2020 £’000 £’000 £’000
Opening balance 1,392,818 1,052,632 2,445,450
Loan advanced to Holdco (note 19) 893,046 — 893,046
Repayment of loan to Holdco (note 19) (150,908) — (150,908)
Unrealised movement in fair value of investments — 144,842 144,842
2,134,956 1,197,474 3,332,430
Notes to the Consolidated Financial Statements continued
For the year ended 31 December 2021
78
Greencoat UK Wind PLC Annual Report for the year ended 31 December 2021
9. Investments at fair value through profit or loss continued
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 2021.
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.
The DCF valuation of the Group’s investments represents the largest component of GAV and the key sensitivities
are considered to be the discount rate used in the DCF valuation and assumptions in relation to inflation, energy
yield, power price and asset life.
The base case discount rate is a blend of a lower discount rate for fixed cash flows and a higher discount rate for
merchant cash flows. The blended portfolio discount rate as at 31 December 2021 was 7.2 per cent (31 December
2020: 6.9 per cent), reflecting a greater proportion of merchant cash flows.
As there is no debt at wind farm level, the DCF valuation is produced by discounting the individual wind farm cash
flows on an unlevered basis. The equivalent levered discount rate would be approximately 2 per cent higher than
the unlevered discount rate.
Base case long term inflation assumptions are 3.5 per cent to 2030 and 2.5 per cent thereafter for RPI and 2.5 per
cent (all years) for CPI.
Notes to the Consolidated Financial Statements continued
For the year ended 31 December 2021
79
G R E E N C O A T
U K W I N D
9. Investments at fair value through profit or loss continued
Fair value measurements continued
Base case energy yield assumptions are P50 (50 per cent probability of exceedance) forecasts based on long
term wind data and operational history. The P90 (90 per cent probability of exceedance over a 10 year period)
and P10 (10 per cent probability of exceedance over a 10 year period) sensitivities reflect the future variability of
wind and the uncertainty associated with the long term data source being representative of the long term mean.
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 4 January 2022 with an appropriate discount
applied reflecting the higher volatility associated with short term prices.
The power price sensitivity below assumes a 10 per cent increase or decrease in power prices relative to the base
case for every year of the asset life.
The base case asset life is 30 years.
Sensitivity analysis
The fair value of the Group’s investments is £4,042,545,081 (2020: £3,329,768,023). 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.
Change in Change in
fair value NAV
Change of investments per share
Input Base case in input £’000 pence
Discount rate 7.2 per cent + 0.5 per cent (107,603) (4.6)
– 0.5 per cent 113,763 4.9
Long term inflation rate RPI: 3.5 per cent to 2030, – 0.5 per cent (108,045) (4.7)
2.5 per cent thereafter + 0.5 per cent 113,573 4.9
CPI: 2.5 per cent
Energy yield P50 10 year P90 (234,246) (10.1)
10 year P10 234,142 10.1
Power price Forecast by leading – 10 per cent (218,684) (9.4)
consultant + 10 per cent 218,014 9.4
Asset life 30 years – 5 years (158,356) (6.8)
+ 5 years 108,087 4.7
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 pages 31 to 32.
Notes to the Consolidated Financial Statements continued
For the year ended 31 December 2021
80
Greencoat UK Wind PLC Annual Report for the year ended 31 December 2021
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 2021 31 December 2020
Andershaw Scotland
(10)
100% —
Bin Mountain Northern Ireland
(9)
100% 100%
Bishopthorpe England
(10)
100% 100%
Braes of Doune Scotland
(11)
100% 50%
Breeze Bidco
(1)
Scotland
(10)
100% 100%
Brockaghboy Northern Ireland
(9)
100% 100%
Carcant Scotland
(11)
100% 100%
Church Hill Northern Ireland
(9)
100% 100%
Corriegarth Scotland
(11)
100% 100%
Cotton Farm England
(10)
100% 100%
Crighshane Northern Ireland
(9)
100% 100%
Douglas West Scotland
(11)
100% 100%
Earl's Hall Farm England
(10)
100% 100%
Glen Kyllachy Scotland
(9)
100% —
Kildrummy Scotland
(10)
100% 100%
Langhope Rig Scotland
(10)
100% 100%
Maerdy Wales
(10)
100% 100%
North Hoyle Wales
(10)
100% 100%
Screggagh Northern Ireland
(9)
100% 100%
Slieve Divena Northern Ireland
(9)
100% 100%
Slieve Divena II Northern Ireland
(9)
100% 100%
Stroupster Scotland
(10)
100% 100%
Tappaghan Northern Ireland
(9)
100% 100%
Walney Holdco
(2)
England
(10)
100% 100%
Windy Rig Scotland
(10)
100% —
Bicker Fen England
(10)
80% 80%
Fenlands
(3)
England
(10)
80% 80%
Nanclach Scotland
(10)
75% 75%
Humber Holdco
(4)
England
(10)
77.2% 77.2%
Dunmaglass Holdco
(5)
Scotland
(10)
71.2% 71.2%
Stronelairg Holdco
(6)
Scotland
(10)
71.2% 71.2%
Hoylake
(7)
England
(10)
63% —
Drone Hill Scotland
(11)
51.6% 51.6%
North Rhins Scotland
(10)
51.6% 51.6%
Sixpenny Wood England
(10)
51.6% 51.6%
Yelvertoft England
(10)
51.6% 51.6%
SYND Holdco
(8)
UK
(10)
51.6% 51.6%
(1)
The Group’s investment in Nanclach is held through Breeze Bidco. The investment was previously held through Nanclach Holdco, which
was held through Nanclach Midco, which was held through Breeze Bidco until 19 December 2019, at which point the investment was
restructured. Nanclach Holdco and Nanclach Midco were dissolved in September 2020.
(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’s investment in Burbo Bank Extension is held through Hoylake.
(8)
The Group’s investments in Drone Hill, North Rhins, Sixpenny Wood and Yelvertoft are held through SYND Holdco.
(9)
The registered office address is The Legacy Building, Northern Ireland Science Park, Belfast, BT3 9DT.
(10)
The registered office address is 27-28 Eastcastle Street, London, England, W1W 8DH.
(11)
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.
Notes to the Consolidated Financial Statements continued
For the year ended 31 December 2021
81
G R E E N C O A T
U K W I N D
10. Unconsolidated subsidiaries, associates and joint ventures continued
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”:
Ownership Ownership
Interest as at Interest as at
Investment Place of Business 31 December 2021 31 December 2020
ML Wind
(1)
England
(2)
49% 49%
Little Cheyne Court England
(2)
41% 41%
Clyde Scotland
(3)
28.2% 28.2%
Rhyl Flats Wales
(2)
24.95% 24.95%
(1)
The Group’s investments in Middlemoor and Lindhurst are 49 per cent (2020: 49 per cent). These are held through ML Wind.
(2)
The registered office address is Windmill Hill Business Park, Whitehill Way, Swindon, Wiltshire, SN5 6PB.
(3)
The registered office address is Inveralmond House, 200 Dunkeld Road, Perth, PH1 3AQ.
Loans advanced by Holdco to the investments are disclosed in note 19.
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
Holdco Kype Muir Extension Nordex Guarantee Turbine supply 42,032
The Company Douglas West Vestas Guarantee Turbine supply 27,022
Holdco Clyde SSE Counter- Grid, radar, 21,771
indemnity decommissioning
The Company North Hoyle The Crown Estate Guarantee Decommissioning, rent 18,263
The Company Glen Kyllachy RWE Counter- Decommissioning, grid 12,238
indemnity
The Company Burbo Bank Extension Orsted Guarantee Rent, radar 11,000
The Company Humber Gateway RWE Guarantee Radar 4,900
The Company Andershaw Statkraft Counter- Decommissioning 3,500
indemnity
The Company Rhyl Flats The Crown Estate Guarantee Decommissioning 3,156
The Company Braes of Doune Land owner Guarantee Decommissioning 2,000
The Company Windy Rig Santander Counter- Access rights, 1,409
indemnity decommissioning, grid
The Company Tom nan Clach RBS Counter- Decommissioning 1,348
indemnity
The Company Douglas West Land owner Guarantee Decommissioning 1,200
The Company Windy Rig NATS Guarantee Radar 1,028
The Company Burbo Bank Extension Santander Counter- OFTO 970
indemnity
The Company Stroupster RBS Counter- Decommissioning 366
indemnity
Holdco Stronelairg SSE Guarantee Grid 301
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 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
153,183
The fair value of these guarantees and counter-indemnities provided by the Group are considered to be £nil
(2020: £nil) as disclosed in note 2.
Notes to the Consolidated Financial Statements continued
For the year ended 31 December 2021
82
Greencoat UK Wind PLC Annual Report for the year ended 31 December 2021
11. Receivables
31 December 2021 31 December 2020
Group £’000 £’000
Amounts due from SPVs (note 19) 1,798 —
VAT receivable 407 480
Prepayments 107 90
Other receivables 320 64
2,632 634
31 December 2021 31 December 2020
Company £’000 £’000
Prepayments 107 90
Other receivables — 53
107 143
12. Payables
31 December 2021 31 December 2020
Group £’000 £’000
Loan interest payable 2,788 3,045
Commitment fee payable 344 328
Other finance costs payable — 43
Acquisition costs payable 1,595 4,538
Investment management fee payable 1,072 —
Share issue costs payable 10 —
Other payables 470 463
6,279 8,417
31 December 2021 31 December 2020
Company £’000 £’000
Loan interest payable 2,788 3,045
Commitment fee payable 344 328
Other finance costs payable — 43
Investment management fee payable 1,072 —
VAT payable — 48
Share issue costs payable 10 —
Other payables 434 448
4,648 3,912
13. Loans and borrowings
31 December 2021 31 December 2020
Group and Company £’000 £’000
Opening balance 1,100,000 600,000
Revolving credit facility
Drawdowns 110,000 780,000
Repayments (260,000) (380,000)
Term debt facilities
Drawdowns — 100,000
Closing balance 950,000 1,100,000
Notes to the Consolidated Financial Statements continued
For the year ended 31 December 2021
83
G R E E N C O A T
U K W I N D
13. Loans and borrowings continued
For the year ended For the year ended
31 December 2021 31 December 2020
Group and Company £’000 £’000
Loan interest 23,113 18,399
Facility arrangement fees 6,375 1,100
Commitment fees 921 1,638
Other facility fees 142 140
Professional fees 138 91
Finance expense 30,689 21,368
The loan balance as at 31 December 2021 has not been adjusted to reflect amortised cost, as the amounts are
not materially different from the outstanding balances.
In relation to non-current loans and borrowings, the Board is of the view that the current market interest rate is
not significantly different to the respective instrument’s contractual interest rates therefore the fair value of the
non-current loans and borrowings at the end of the reporting periods is not significantly different from their
carrying amounts.
On 29 October 2021, the Company renewed its revolving credit facility with RBS International, RBC, Barclays and
Santander with a refreshed tenor and increased the facility by £200 million to £600 million. The terms of the
amended 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.
As at 31 December 2021 the company has a total revolving credit facility of £600 million (2020: £400 million),
accrued interest was £12,554 (2020: £410,767) and the outstanding commitment fee payable was £343,699
(2020: £327,671).
During the year, the Company refinanced £150 million of term debt, replacing loans with NAB and CBA previously
maturing in 2022 with maturities in 2024 and 2027 respectively. In parallel, the Company also amended and
restated all term debt facilities to accommodate the discontinuation of LIBOR from 1 January 2022 and its
replacement as a reference rate with SONIA. The renewal of the Company’s revolving credit facility and
amendment and restatement of the Company’s respective term debt facilities met the definition of a substantial
modification under IFRS 9. 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 fixed rate Loan principal 31 December 2021
Provider Maturity date %%£’000 £’000
NAB 1 November 2023 1.20 1.42800 75,000 319
NAB 1 November 2023 1.20 0.77250 25,000 80
CBA 7 December 2023 1.00 0.11300 50,000 88
NAB 4 November 2024 1.15 1.06100 50,000 64
CBA 14 November 2024 1.35 0.80750 50,000 175
CBA 6 March 2025 1.55 1.52650 50,000 253
CIBC 3 November 2025 1.50 1.51030 100,000 445
NAB 1 November 2026 1.50 1.59800 75,000 376
NAB 1 November 2026 1.50 0.84250 25,000 95
CIBC 14 November 2026 1.40 0.81325 100,000 327
CBA 4 November 2027 1.60 1.36800 100,000 554
700,000 2,776
These loans contain swaps that are contractually linked. Accordingly, they have been treated as single fixed rate
loan agreements which effectively set interest payable at fixed rates.
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.
Notes to the Consolidated Financial Statements continued
For the year ended 31 December 2021
84
Greencoat UK Wind PLC Annual Report for the year ended 31 December 2021
14. Contingencies and commitments
In December 2019, the Group announced that it had agreed to acquire the Twentyshilling wind farm for a headline
consideration of £51.4 million. The Investment is scheduled to complete in March 2022 once the wind farm is
fully operational.
In April 2020, the Group announced that it had agreed to acquire the South Kyle wind farm project for a headline
consideration of £320 million. The investment is scheduled to complete in Q1 2023 once the wind farm is
fully operational.
In December 2020, the Group entered into an agreement to acquire 49.9 per cent of the Kype Muir Extension
wind farm project for a headline consideration of £51.4 million, to be paid once the wind farm is fully operational
(target Q4 2022). The Group also agreed to provide construction finance of up to £47 million, of which
£10.6 million had been utilised as at 31 December 2021.
15. Share capital – ordinary shares of £0.01
Number of Share Share
shares capital premium Total
Date Issued and fully paid issued £’000 £’000 £’000
1 January 2021 1,824,129,348 18,241 1,834,477 1,852,718
Shares issued to the Investment Manager
5 February 2021 True-up of 2020 and
Q1 2021 Equity Element 308,798 3 372 375
7 May 2021 Q2 2021 Equity Element 306,862 3 372 375
6 August 2021 Q3 2021 Equity Element 299,438 3 372 375
5 November 2021 Q4 2021 Equity Element 290,685 3 372 375
1,205,783 12 1,488 1,500
Other
19 February 2021 Capital raise 150,853,600 1,509 196,109 197,618
19 February 2021 Less share issue costs ——(2,933) (2,933)
29 November 2021 Capital raise 340,909,091 3,409 446,591 450,000
29 November 2021 Less share issue costs ——(6,792) (6,792)
31 December 2021 2,317,097,822 23,171 2,468,940 2,492,111
Number of Share Share
shares capital premium Total
Date Issued and fully paid issued £’000 £’000 £’000
1 January 2020 1,517,537,310 15,175 1,442,218 1,457,393
Shares issued to the Investment Manager
7 February 2020 True-up of 2019 and
Q1 2020 Equity Element 316,145 3 372 375
20 April 2020 Q2 2020 Equity Element 309,434 3 372 375
7 August 2020 Q3 2020 Equity Element 312,344 3 372 375
5 November 2020 Q4 2020 Equity Element 310,604 3 372 375
1,248,527 12 1,488 1,500
Other
1 October 2020 Capital raise 305,343,511 3,054 396,946 400,000
1 October 2020 Less share issue costs ——(6,175) (6,175)
31 December 2020 1,824,129,348 18,241 1,834,477 1,852,718
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 to the financial statements.
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 2021.
Notes to the Consolidated Financial Statements continued
For the year ended 31 December 2021
85
G R E E N C O A T
U K W I N D
16. Net assets per share
Group and Company 31 December 2021 31 December 2020
Net assets – £’000 3,093,699 2,229,873
Number of ordinary shares issued 2,317,097,822 1,824,129,348
Total net assets – pence 133.5 122.2
17. Reconciliation of operating profit for the year to net cash from operating activities
For the year ended For the year ended
31 December 2021 31 December 2020
Group £’000 £’000
Operating profit for the year 393,908 126,375
Adjustments for:
Movement in fair value of investments (notes 4 & 9) (155,551) (9,763)
Investment acquisition costs 3,305 8,025
Increase in receivables (1,995) (30)
Increase/(decrease) in payables 1,094 (2,412)
Equity Element of Investment Manager’s fee (note 3) 1,500 1,500
Consideration for investee company taxable losses — (612)
Net cash flows from operating activities 242,261 123,083
For the year ended For the year ended
31 December 2021 31 December 2020
Company £’000 £’000
Operating profit for the year 393,908 125,763
Adjustments for:
Movement in fair value of investments (note 9) (418,125) (144,842)
Non cash settlement of loans to Group companies — 16,914
Decrease/(increase) in receivables 39 (61)
Decrease in payables 1,010 (12)
Equity Element of Investment Manager's fee (note 3) 1,500 1,500
Net cash flows from operating activities (21,668) (738)
Reconciliation of cash flows and non-cash flow changes in liabilities arising from financing activities
Loans and
borrowings Other liabilities
Group and Company £’000 £’000
As at 1 January 2021 1,100,000 3,369
Cash flows (net) (150,000) (30,976)
Movements in Statement of Comprehensive Income (note 13) — 30,689
As at 31 December 2021 950,000 3,082
Loans and
borrowings Other liabilities
Group and Company £’000 £’000
As at 1 January 2020 600,000 2,785
Cash flows (net) 500,000 (20,784)
Movements in Statement of Comprehensive Income (note 13) — 21,368
As at 31 December 2020 1,100,000 3,369
Notes to the Consolidated Financial Statements continued
For the year ended 31 December 2021
86
Greencoat UK Wind PLC Annual Report for the year ended 31 December 2021
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 an unlevered, 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 discount rates 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 cash. The Group’s
only other exposure to interest rate risk is due to floating interest rates required to service external borrowings
through the revolving credit facility. An increase of 1 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 (2020: increase
by 1 per cent in the Libor rate), the annual interest due on the facility would increase by £2,500,000 (2020:
£4,000,000) on the basis that the revolving credit facility is £250 million drawn (2020: £400 million). 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 CBA, CIBC and NAB term debt facilities
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.
The Group’s interest and non-interest bearing assets and liabilities as at 31 December 2021 are summarised below:
Interest bearing
Non-interest
Fixed rate Floating rate bearing Total
Group £’000 £’000 £’000 £’000
Assets
Cash at bank ——4,801 4,801
Other receivables (note 11) ——727 727
Investments (note 9) 924,748 — 3,117,797 4,042,545
924,748 — 3,123,325 4,048,073
Liabilities
Other payables (note 12) ——(6,279) (6,279)
Loans and borrowings (note 13) (700,000) (250,000) — (950,000)
(700,000) (250,000) (6,279) (956,279)
Notes to the Consolidated Financial Statements continued
For the year ended 31 December 2021
87
G R E E N C O A T
U K W I N D
18. Financial risk management continued
Interest rate risk continued
The Group’s interest and non-interest bearing assets and liabilities as at 31 December 2020 are summarised
below:
Interest bearing
Non-interest
Fixed rate Floating rate bearing Total
Group £’000 £’000 £’000 £’000
Assets
Cash at bank ——7,888 7,888
Other receivables (note 11) ——544 544
Investments (note 9) 607,956 — 2,721,812 3,329,768
607,956 — 2,730,244 3,338,200
Liabilities
Other payables (note 12) ——(8,417) (8,417)
Loans and borrowings (note 13) (700,000) (400,000) — (1,100,000)
(700,000) (400,000) (8,417) (1,108,417)
The Company’s interest and non-interest bearing assets and liabilities as at 31 December 2021 are summarised
below:
Interest bearing
Non-interest
Fixed rate Floating rate bearing Total
Company £’000 £’000 £’000 £’000
Assets
Cash at bank ——1,875 1,875
Other receivables (note 11) ————
Investments (note 9) ——4,046,365 4,046,365
——4,048,240 4,048,240
Liabilities
Other payables (note 12) ——(4,648) (4,648)
Loans and borrowings (note 13) (700,000) (250,000) — (950,000)
(700,000) (250,000) (4,648) (954,648)
The Company’s interest and non-interest bearing assets and liabilities as at 31 December 2020 are summarised
below:
Interest bearing
Non-interest
Fixed rate Floating rate bearing Total
Company £’000 £’000 £’000 £’000
Assets
Cash at bank ——1,212 1,212
Other receivables (note 11) ——53 53
Investments (note 9) ——3,332,430 3,332,430
——3,333,695 3,333,695
Liabilities
Other payables (note 12) ——(3,912) (3,912)
Loans and borrowings (note 13) (700,000) (400,000) — (1,100,000)
(700,000) (400,000) (3,912) (1,103,912)
Notes to the Consolidated Financial Statements continued
For the year ended 31 December 2021
88
Greencoat UK Wind PLC Annual Report for the year ended 31 December 2021
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 and loan investments. 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, and having at least one common board director of Holdco
and the respective wind farm SPVs in which the loan investments have been made.
The table below details the Group’s maximum exposure to credit risk:
31 December 2021 31 December 2020
Group £’000 £’000
Other receivables (note 11) 727 544
Cash at bank 4,801 7,888
Loan investments (note 9) 924,748 607,956
930,276 616,388
The table below details the Company’s maximum exposure to credit risk:
31 December 2021 31 December 2020
Company £’000 £’000
Other receivables (note 11) — 53
Cash at bank 1,875 1,212
Loan investments (note 9) 2,430,766 2,134,956
2,432,641 2,136,221
The table below shows the cash balances of the Group and the credit rating for each counterparty:
31 December 2021 31 December 2020
Group Rating £’000 £’000
RBS International BBB+ 3,099 6,753
The Crown Estate n/a 1,702 1,135
4,801 7,888
The table below shows the cash balances of the Company and the credit rating for each counterparty:
31 December 2021 31 December 2020
Company Rating £’000 £’000
The Crown Estate n/a 1,702 1,135
RBS International BBB+ 173 77
1,875 1,212
Notes to the Consolidated Financial Statements continued
For the year ended 31 December 2021
89
G R E E N C O A T
U K W I N D
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, repayment of the
Company’s outstanding debt or further investing activities.
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:
Less than 1 year 1 – 5 years 5+ years Total
Group – 31 December 2021 £’000 £’000 £’000 £’000
Assets
Other receivables (note 11) 727 ——727
Dividends receivable ————
Cash at bank 4,801 ——4,801
Loan investments (note 9) ——924,748 924,748
Liabilities
Other payables (note 12) (6,279) ——(6,279)
Loans and borrowings (24,694) (912,688) (102,529) (1,039,911)
(25,445) (912,688) 822,219 (115,914)
Less than 1 year 1 – 5 years 5+ years Total
Group – 31 December 2020 £’000 £’000 £’000 £’000
Assets
Other receivables (note 11) 544 ——544
Cash at bank 7,888 ——7,888
Loan investments (note 9) ——607,956 607,956
Liabilities
Other payables (note 12) (8,417) ——(8,417)
Loans and borrowings (24,701) (948,496) (204,359) (1,177,556)
(24,686) (948,496) 403,597 (569,585)
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:
Less than 1 year 1 – 5 years 5+ years Total
Company – 31 December 2021 £’000 £’000 £’000 £’000
Assets
Cash at bank 1,875 ——1,875
Loan investments (note 9) ——2,430,766 2,430,766
Liabilities
Other payables (note 12) (4,648) ——(4,648)
Loans and borrowings (24,694) (912,688) (102,529) (1,039,911)
(27,467) (912,688) 2,328,237 1,388,082
Notes to the Consolidated Financial Statements continued
For the year ended 31 December 2021
90
Greencoat UK Wind PLC Annual Report for the year ended 31 December 2021
18. Financial risk management continued
Less than 1 year 1 – 5 years 5+ years Total
Company – 31 December 2020 £’000 £’000 £’000 £’000
Assets
Other receivables (note 11) 53 ——53
Cash at bank 1,212 ——1,212
Loan investments (note 9) ——2,134,956 2,134,956
Liabilities
Other payables (note 12) (3,912) ——(3,912)
Loans and borrowings (24,701) (948,496) (204,359) (1,177,556)
(27,348) (948,496) 1,930,597 954,753
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
40 to 43. £38,060 (2020: £35,221) 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 £499,800,000 (2020: £893,045,995) and Holdco
settled amounts of £203,989,872 (2020: £150,908,753). The amount outstanding at the year end was
£2,430,765,820 (31 December 2020: £2,134,955,692).
During the year, Holdco received £2,420,077 (2020: £2,937,063) in relation to renewables obligation proceeds on
behalf of Bin Mountain, Carcant and Tappaghan. Amounts due to these investee companies as at 31 December
2021 were £nil (2020: £nil).
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 (2020: £800,000) was paid from
Holdco to the Company under this agreement and amounts due to the Company at the year end were £nil
(2020: £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.
As at 31 December 2021, £490,236 (2020: £nil) was due from Bicker Fen and £1,292,390 (2020: £nil) was due from
Fenlands in respect of quarterly corporation tax payments made by Holdco.
As at 31 December 2021, under the terms of Management Services Agreements with the SPVs, Holdco was due
to receive £15,171 from Andershaw.
Notes to the Consolidated Financial Statements continued
For the year ended 31 December 2021
91
G R E E N C O A T
U K W I N D
19. Related party transactions continued
For the year ended 31 December 2021
Expenses paid
to the Expenses paid
Income Investment to the
received Manager Administrator
£££
Andershaw
(1)
, Bishopthorpe, Brockaghboy, Church Hill,
Corriegarth, Crighshane, Langhope Rig, North Hoyle, Screggagh,
Slieve Divena, Slieve Divena II, Stroupster, Tom Nan Clach:
£48,445 income receivable per wind farm per annum 593,984 296,992 296,992
£24,223 expenses payable to the Investment Manager per wind farm
per annum
£24,223 expenses payable to the Administrator per wind farm per annum
Bin Mountain, Braes of Doune, Carcant, Cotton Farm, Drone Hill,
Earl’s Hall Farm, Kildrummy, Maerdy, North Rhins, Sixpenny Wood,
Tappaghan, Yelvertoft:
£36,334 income receivable per wind farm per annum 436,007 145,336 290,671
£12,111 expenses payable to the Investment Manager per wind farm
per annum
£24,223 expenses payable to the Administrator per wind farm per annum
Douglas West:
Q1-3:
£26,582 income receivable per annum
£18,167 expenses payable to the Investment Manager per annum
£8,415 expenses payable to the Administrator per annum
38,694 24,223 14,471
Q4:
£12,111 income receivable per annum
£6,056 expenses payable to the Investment Manager per annum
£6,056 expenses payable to the Administrator per annum
Dunmaglass Holdco, Stronelairg Holdco:
£14,595 income receivable per wind farm per annum 14,595 — 14,595
£nil expenses payable to the Investment Manager per wind farm per annum
£14,595 expenses payable to the Administrator per wind farm per annum
Bicker Fen, Fenlands:
£5,573 income receivable per wind farm per annum
£5,573 expenses payable to the Investment Manager per wind farm
5,574 5,574 —
per annum
£nil expenses payable to the Administrator per wind farm per annum
Walney Holdco:
£19,790 income receivable per annum 19,790 9,895 9,895
£9,895 expenses payable to the Investment Manager per annum
£9,895 expenses payable to the Administrator per annum
Humber Holdco
(2)
:
£7,969 income receivable per wind farm per annum 7,969 — 7,969
£nil expenses payable to the Investment Manager per wind farm per annum
£7,969 expenses payable to the Administrator per wind farm per annum
Total 1,116,613 482,020 634,593
(1)
Acquired in September 2021. £12,642 income received and £6,321 paid to the Investment Manager during the year.
(2)
Acquired in December 2020. £7,969 income received and £nil paid to the Investment Manager during the year.
Notes to the Consolidated Financial Statements continued
For the year ended 31 December 2021
92
Greencoat UK Wind PLC Annual Report for the year ended 31 December 2021
19. Related party transactions continued
For the year ended 31 December 2020
Expenses paid
to the Expenses paid
Income Investment to the
received Manager Administrator
£££
Bishopthorpe, Brockaghboy, Church Hill, Corriegarth,
Crighshane, Langhope Rig, North Hoyle, Screggagh,
Slieve Divena, Slieve Divena II
(1)
, Stroupster, Tom Nan Clach:
£47,495 income receivable per wind farm per annum 558,066 279,033 279,033
£23,748 expenses payable to the Investment Manager per wind farm
per annum
£23,748 expenses payable to the Administrator per wind farm
per annum
Bin Mountain, Braes of Doune, Carcant, Cotton Farm, Drone Hill,
Earl’s Hall Farm, Kildrummy, Maerdy, North Rhins,
Sixpenny Wood, Tappaghan, Yelvertoft:
£35,622 income receivable per wind farm per annum 427,464 142,488 284,976
£11,874 expenses payable to the Investment Manager per wind farm
per annum
£23,748 expenses payable to the Administrator per wind farm
per annum
Douglas West:
£32,313 income receivable per annum 32,313 23,748 8,565
£23,748 expenses payable to the Investment Manager per annum
£8,565 expenses payable to the Administrator per annum
Dunmaglass Holdco, Stronelairg Holdco:
£7,154 income receivable per wind farm per annum
£nil expenses payable to the Investment Manager per wind farm
14,308 — 14,308
per annum
£7,154 expenses payable to the Administrator per wind farm per annum
Bicker Fen, Fenlands:
£2,732 income receivable per wind farm per annum
£2,732 expenses payable to the Investment Manager per wind farm
5,464 5,464 —
per annum
£nil expenses payable to the Administrator per wind farm per annum
Walney Holdco
(2)
:
£18,000 income receivable per annum 4,500 2,250 2,250
£9,000 expenses payable to the Investment Manager per annum
£9,000 expenses payable to the Administrator per annum
Total 1,042,115 452,983 589,132
(1)
Acquired in March 2020. £35,620 income received and £17,805 paid to the Investment Manager and Administrator during the year.
(2)
Acquired in August 2020. £4,500 income received and £2,250 paid to the Investment Manager and Administrator during the year.
Notes to the Consolidated Financial Statements continued
For the year ended 31 December 2021
93
G R E E N C O A T
U K W I N D
19. Related party transactions continued
The table below shows dividends received in the year from the Group’s investments.
For the year ended For the year ended
31 December 2021 31 December 2020
£’000 £’000
Humber Holdco
(1)
31,853 —
Clyde 21,654 17,770
Andershaw 15,150 —
Walney Holdco
(2)
14,441 —
Brockaghboy 14,331 7,518
Corriegarth
(3)
13,778 —
Braes of Doune 11,110 3,862
Stroupster 8,491 3,876
SYND Holdco
(4)
8,303 6,782
North Hoyle 8,193 6,242
Fenlands
(5)
7,993 5,844
Stronelairg Holdco
(6)
7,019 11,454
ML Wind
(7)
6,664 5,978
Rhyl Flats 6,163 5,639
Cotton Farm 4,621 4,468
Tappaghan 4,484 3,691
Maerdy 4,382 3,219
Bishopthorpe 4,208 2,811
Dunmaglass Holdco
(8)
3,801 3,954
Little Cheyne Court 3,649 4,428
Earl’s Hall Farm 3,468 2,794
Kildrummy 3,407 4,488
Slieve Divena 3,295 2,670
Langhope Rig 3,075 3,057
Slieve Divena II 2,714 —
Bicker Fen 2,566 2,841
Screggagh 2,427 1,855
Bin Mountain 1,764 1,256
Carcant 1,601 1,400
Church Hill 903 —
Crighshane 820 —
Corriegarth Holdings
(3)
— 5,851
226,328 123,748
(1)
The Group’s investment in Humber Gateway is held through Humber Holdco.
(2)
The Group’s investment in Walney is held through Walney Holdco.
(3)
The Group’s investment in Corriegarth was previously held through Corriegarth Holdings, until 27 April 2020, at which point the investment
was restructured. Corriegarth Holdings was dissolved in September 2020.
(4)
The Group’s investments in Drone Hill, North Rhins, Sixpenny Wood and Yelvertoft are held through SYND Holdco.
(5)
The Group’s investments in Deeping St. Nicholas, Glass Moor, Red House and Red Tile are held through Fenlands.
(6)
The Group’s investment in Stronelairg is held through Stronelairg Holdco.
(7)
The Group’s investments in Middlemoor and Lindhurst are held through ML Wind.
(8)
The Group’s investment in Dunmaglass is held through Dunmaglass Holdco.
Notes to the Consolidated Financial Statements continued
For the year ended 31 December 2021
94
Greencoat UK Wind PLC Annual Report for the year ended 31 December 2021
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 2021 31 December 2020
£’000 £’000
Walney Holdco 13,051 —
Stronelairg 5,194 5,201
Clyde 4,394 4,290
Dunmaglass 3,410 3,414
Corriegarth 3,410 478
Douglas West 2,505 —
Tom nan Clach 2,996 5,118
Crighshane 1,906 1,040
Slieve Divena II 1,714 544
Church Hill 1,042 708
Andershaw 182 —
39,804 20,793
The table below shows the Group’s shareholder loans with the wind farm investments.
Accrued
Loans at Loans Loan Loans at interest at
1 January advanced repayments 31 December 31 December
2021
(1)
in the year in the year 2021 2021 Total
Windfarm £’000 £’000 £’000 £’000 £’000 £’000
Andershaw — 32,641 — 32,641 333 32,974
Church Hill 15,075 — (373) 14,702 118 14,820
Clyde 71,503 — — 71,503 954 72,457
Corriegarth 42,553 — — 42,553 427 42,980
Crighshane 24,665 — (2,401) 22,264 66 22,330
Douglas West 19,217 25,168 (737) 43,648 352 44,000
Dunmaglass 56,864 — — 56,864 860 57,724
Glen Kyllachy — 51,470 — 51,470 93 51,563
Hoylake
(2)
— 172,279 — 172,279 1,007 173,286
Kype Muir — 10,606 — 10,606 96 10,702
Slieve Divena II 22,182 — — 22,182 91 22,273
Stronelairg 86,619 — — 86,619 1,310 87,929
Tom nan Clach 85,874 — (5,220) 80,654 568 81,222
Walney 172,727 — — 172,727 880 173,607
Windy Rig — 36,772 — 36,772 109 36,881
597,279 328,936 (8,731) 917,484 7,264 924,748
(1)
Excludes accrued interest at 31 December 2020 of £10,675,825.
(2)
The Group’s investment in Burbo Bank Extension is held through Hoylake.
Notes to the Consolidated Financial Statements continued
For the year ended 31 December 2021
95
G R E E N C O A T
U K W I N D
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 24 January 2022, the Company announced a dividend of £41.6 million, equivalent to 1.795 pence per share
with respect to the quarter ended 31 December 2021, bringing the total dividend declared with respect to the
year to 31 December 2021 to 7.18 pence per share. The record date for the dividend was 11 February 2022 and
the payment date is 25 February 2022.
On 31 January 2022, the Company utilised £200 million under its 8 year term debt facility with AXA and repaid
the Company’s revolving credit facility, leaving £50 million drawn as at the date of this report.
Notes to the Consolidated Financial Statements continued
For the year ended 31 December 2021
96
Greencoat UK Wind PLC Annual Report for the year ended 31 December 2021
Directors (all non-executive)
Shonaid Jemmett-Page (Chairman)
William Rickett C.B.
Martin McAdam
Lucinda Riches C.B.E
Caoimhe Giblin
Nicholas Winser
Investment Manager
Greencoat Capital LLP
4th Floor, The Peak
5 Wilton Road
London
SW1V 1AN
Administrator and Company Secretary
Ocorian Administration (UK) Limited
Unit 4, The Legacy Building
Northern Ireland Science Park
Queen’s Road
Belfast
BT3 9DT
Depositary
Ocorian Depositary (UK) Limited
Unit 4, The Legacy Building
Northern Ireland Science Park
Queen’s Road
Belfast
BT3 9DT
Registrar
Computershare Limited
The Pavilions
Bridgwater Road
Bristol
BS99 6ZZ
Registered Company Number
08318092
Registered Office
Registered Auditor
BDO LLP
55 Baker Street
London
W1U 7EU
Joint Broker
RBC Capital Markets
Riverbank House
2 Swan Lane
London
EC4R 3BF
Joint Broker
Jefferies International Limited
100 Bishopsgate
London
EC2N 4JL
Company Information
97
G R E E N C O A T
U K W I N D
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 88 staff for the financial year
ending 31 December 2021 was £16.5 million,
consisting of £11.4 million fixed and £5.1 million
variable remuneration. The aggregate amount of
remuneration for the 5 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 £1.1 million.
Supplementary Information (unaudited)
98
Greencoat UK Wind PLC Annual Report for the year ended 31 December 2021
Aggregate Group Debt means the Group’s
proportionate share of outstanding third party
borrowings
AGM means Annual General Meeting of the Company
AIC means the Association of Investment Companies
AIC Code means the AIC’s Code of Corporate
Governance
AIF means an Alternative Investment Fund as defined
under the AIFMD
AIFM means an Alternative Investment Fund Manager
as defined under the AIFMD
AIFMD means the Alternative Investment Fund
Managers Directive
Alternative Performance Measure means a financial
measure other than those defined or specified in the
applicable financial reporting framework
Andershaw means Andershaw Wind Power Limited
AXA means funds managed by AXA Investment
Managers UK Limited
Balancing Mechanism means the system by which
electricity demand and supply is balanced by National
Grid in close to real time
Barclays means Barclays Bank PLC
BDO LLP means the Company’s Auditor as at the
reporting date
Bicker Fen means Bicker Fen Windfarm Limited
Bin Mountain means Bin Mountain Wind Farm (NI)
Limited
Bishopthorpe means Bishopthorpe Wind Farm
Limited
Board means the Directors of the Company
Braes of Doune means Braes of Doune Wind Farm
(Scotland) Limited
Breeze Bidco means Breeze Bidco (TNC) Limited
Brockaghboy means Brockaghboy Windfarm Limited
Burbo Bank Extension means Hoylake Wind Limited,
Greencoat Burbo Extension Holding (UK) Limited,
Burbo Extension Holding Limited and Burbo Extension
Limited
Carcant means Carcant Wind Farm (Scotland) Limited
Cash Fee means the cash fee that the Investment
Manager is entitled to under the Investment
Management Agreement
CBA means Commonwealth Bank of Australia
CFD means Contract For Difference between an
electricity generator and Low Carbon Contracts
Company
Church Hill means Church Hill Wind Farm Limited
CIBC means Canadian Imperial Bank of Commerce
Clyde means Clyde Wind Farm (Scotland) Limited
Company means Greencoat UK Wind PLC
COP26 means the 2021 United Nations Climate
Change Conference
Corriegarth means Corriegarth Wind Energy Limited
Corriegarth Holdings means Corriegarth Wind Energy
Holdings Limited
Cotton Farm means Cotton Farm Wind Farm Limited
COVID-19 means an infectious disease discovered in
late 2019 and caused by the corona virus.
CPI means the Consumer Price Index
Crighshane means Crighshane Wind Farm Limited
DCF means Discounted Cash Flow
Deeping St. Nicholas means Deeping St. Nicholas
wind farm
Douglas West means Douglas West Wind Farm
Limited
Drone Hill means Drone Hill Wind Farm Limited
DTR means the Disclosure Guidance and Transparency
Rules sourcebook issued by the Financial Conduct
Authority
Dunmaglass means Dunmaglass Holdco and
Dunmaglass Wind Farm
Dunmaglass Holdco means Greencoat Dunmaglass
Holdco Limited
Dunmaglass Wind Farm means Dunmaglass Wind
Farm Limited
Earl’s Hall Farm means Earl’s Hall Farm Wind Farm
Limited
Defined Terms
99
G R E E N C O A T
U K W I N D
Equity Element means the ordinary shares issued to
the Investment Manager under the Investment
Management Agreement
ESG means Environmental, Social and Governance
EU means the European Union
Fenlands means Fenland Windfarms Limited
FRC means the Financial Reporting Council
GAV means Gross Asset Value
Glass Moor means Glass Moor wind farm
Glen Kyllachy means Glen Kyllachy Wind Farm Limited
Group means Greencoat UK Wind PLC and Greencoat
UK Wind Holdco Limited
HMP means Habitat Management Plan
Holdco means Greencoat UK Wind Holdco Limited
Hoylake means Hoylake Wind Limited
Humber Gateway means Humber Holdco and
Humber Wind Farm
Humber Holdco means Greencoat Humber Limited
Humber Wind Farm means RWE Renewables UK
Humber Wind Limited
IAS means International Accounting Standards
IFRS means International Financial Reporting
Standards
Investment Management Agreement means the
agreement between the Company and the Investment
Manager
Investment Manager means Greencoat Capital LLP
IPEV Valuation Guidelines means the International
Private Equity and Venture Capital Valuation Guidelines
IRR means Internal Rate of Return
Kildrummy means Kildrummy Wind Farm Limited
KPI means Key Performance Indicator
Langhope Rig means Langhope Rig Wind Farm
Limited
LIBOR means the London Inter Bank Offered Rate
Lindhurst means Lindhurst Wind Farm
Listing Rules means the listing rules made by the UK
Listing Authority under Section 73A of the Financial
Services and Markets Act 2000
Little Cheyne Court means Little Cheyne Court Wind
Farm Limited
Maerdy means Maerdy Wind Farm Limited
Middlemoor means Middlemoor Wind Farm
ML Wind means ML Wind LLP
NAB means National Australia Bank
Nanclach means Nanclach Limited
NAV means Net Asset Value
North Hoyle means North Hoyle Wind Farm Limited
North Rhins means North Rhins Wind Farm Limited
PPA means Power Purchase Agreement entered into
by the Group’s wind farms
RBC means the Royal Bank of Canada
RBS International means the Royal Bank of Scotland
International Limited
Red House means Red House wind farm
Red Tile means Red Tile wind farm
Review Section means the front end review section of
this report (including but not limited to the Chairman’s
Statement, Strategic Report, Investment Manager’s
Report and Report of the Directors)
Rhyl Flats means Rhyl Flats Wind Farm Limited
ROC means Renewable Obligation Certificate
RPI means the Retail Price Index
Santander means Santander Global Banking and
Markets
Screggagh means Screggagh Wind Farm Limited
Sixpenny Wood means Sixpenny Wood Wind Farm
Limited
Slieve Divena means Slieve Divena Wind Farm Limited
Slieve Divena II means Slieve Divena Wind Farm No. 2
Limited
SONIA means the Sterling Overnight Index Average
Defined Terms continued
100
Greencoat UK Wind PLC Annual Report for the year ended 31 December 2021
SPVs means the Special Purpose Vehicles which hold
the Group’s investment portfolio of underlying wind
farms
Stronelairg means Stronelairg Holdco and Stronelairg
Wind Farm
Stronelairg Holdco means Greencoat Stronelairg
Holdco Limited
Stronelairg Wind Farm means Stronelairg Wind Farm
Limited
Stroupster means Stroupster Caithness Wind Farm
Limited
SYND Holdco means SYND Holdco Limited
Tappaghan means Tappaghan Wind Farm (NI) Limited
TCFD means Task Force on Climate-Related Financial
Disclosures
Tom nan Clach means Breeze Bidco and Nanclach
TSR means Total Shareholder Return
UK means the United Kingdom of Great Britain and
Northern Ireland
UK Code means the UK Corporate Governance Code
issued by the FRC
Walney means Walney Holdco and Walney Wind Farm
Walney Holdco means Greencoat Walney Holdco
Limited
Walney Wind Farm means Walney (UK) Offshore
Windfarms Limited
Wind Rig means Windy Rig Wind Farm Limited
Yelvertoft means Yelvertoft Wind Farm Limited
Defined Terms continued
101
G R E E N C O A T
U K W I N D
Performance Measure Definition
CO
2
emissions reduced 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.
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.
Movement in the ex-dividend Net Asset Value per ordinary share
during the year.
NAV per share The Net Asset Value per ordinary share.
Net cash generation The operating cash flow of the Group and wind farm SPVs.
Premium to NAV The percentage difference between the published NAV per ordinary
share and the quoted price of each ordinary share as at the relevant
reporting date.
Total return (NAV) The movement in the ex-dividend NAV per ordinary share, plus
dividend per ordinary share declared or paid to shareholders with
respect to the year.
Total Shareholder Return The movement in share price, combined with dividends paid during
the year, on the assumption that these dividends have been
reinvested.
NAV movement per share (adjusting
for dividends)
Alternative Performance Measures
102
Greencoat UK Wind PLC Annual Report for the year ended 31 December 2021
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.
