Annual Report
For the year ended 31 December 2022
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 33
Report of the Directors 36
Directors’ Remuneration Report 39
Statement of Directors’ Responsibilities 43
Corporate Governance Report 44
Audit Committee Report 50
Independent Auditor’s Report 54
Financial Statements 62
Notes to the Financial Statements 68
Company Information 98
Supplementary Information 99
EU SFDR Disclosures 100
Defined Terms 117
Alternative Performance Measures 120
Cautionary Statement 121
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 117 to 119 unless separately defined.
Summary
Highlights
• The Group’s investments generated 4,362GWh of renewable electricity.
• Net cash generation (Group and wind farm SPVs) was £560.1 million.
• Acquisition of Twentyshilling and a net 12.5 per cent stake in Hornsea 1 increased the portfolio to 45 operating
wind farm investments and net generating capacity to 1,610MW as at 31 December 2022.
• The Company declared total dividends of 7.72 pence per share with respect to the year and is targeting a
dividend of 8.76 pence per share for 2023 (increased in line with December 2022 RPI).
• Aggregate Group Debt of £1,780 million as at 31 December 2022, equivalent to 31 per cent of GAV.
Key Metrics
As at As at
31 December 2022 31 December 2021
Market capitalisation £3,523.5 million £3,257.8 million
Share price 152.0 pence 140.6 pence
Dividends with respect to the year £178.9 million £148.0 million
Dividends with respect to the year per share 7.72 pence 7.18 pence
GAV* £5,652.7 million £4,043.7 million
NAV* £3,873.2 million £3,093.7 million
NAV per share* 167.1 pence 133.5 pence
NAV movement per share (adjusting for dividends)* 33.5 pence 11.3 pence
Total return (NAV)* 31.3 per cent 15.4 per cent
TSR* 13.5 per cent 10.7 per cent
CO
2
emissions avoided per annum* 2.0 million tonnes 1.7 million tonnes
Homes powered per annum* 1.8 million homes 1.5 million homes
Funds invested in community projects in the year £4.0 million £3.0 million
* Alternative Performance Measures as defined on page 120.
Defining Characteristics
Greencoat UK Wind PLC was designed for investors from first principles to be simple, transparent and low risk.
• The Group is invested solely in UK wind farms.
• Wind is the most mature and largest scale renewable technology.
• The UK has a long established regulatory regime, high wind resource and £100 billion worth of wind farms
in operation.
• The Group is wholly independent and thus avoids conflicts of interests in its investment decisions.
• The independent Board is actively involved in key investment decisions and in monitoring the efficient
operation of the assets, and works in conjunction with the most experienced investment management team
in the sector.
• Low gearing is important to ensure a high level of cash flow stability and higher tolerance to downside
sensitivities.
• The Group invests in sterling assets and thus does not incur material currency risk.
G R E E N C O A T
U K W I N D
01
I am pleased to present the Annual Report of
Greencoat UK Wind PLC for the year ended
31 December 2022.
Performance
2022 was another significant year for the Company
with £1,184 million invested and 4,362GWh of
renewable electricity generated.
During the year, portfolio generation was 5 per cent
below budget as a result of lower wind in the second
half of the year but power prices were well above
budget, primarily reflecting high gas prices. Net cash
generated by the Group and wind farm SPVs was
£560.1 million, providing cover of 3.2x on
£175.8 million of dividends paid in the year. The
Company has reinvested over £340 million of excess
cash generation during the year.
By the end of 2022, the portfolio was generating
sufficient electricity to power 1.8 million homes and
avoiding CO
2
emissions of approximately 2.0 million
tonnes per annum through the displacement of
thermal generation.
Dividends and Returns
Declared dividends for the year total 7.72 pence per
share, with the fourth and final quarterly dividend of
1.93 pence per share to be paid on 24 February 2023.
With our continuing strong cash flow and dividend
cover we can confidently target a dividend of
8.76 pence per share with respect to 2023, increased
in line with December’s RPI of 13.4 per cent.
The Total Shareholder Return for the year was
13.5 per cent.
NAV per share increased from 131.7 pence per share
(ex dividend) on 31 December 2021 to 165.2 pence per
share (ex dividend) on 31 December 2022, an increase
of 33.5 pence (25.4 per cent) during the year.
Approximately half of the increase in NAV per share is
attributable to strong cash generation in the year and
half is attributable to an increase in the portfolio
valuation, reflecting higher power prices and higher
inflation, offset by an increase in the discount rate. Since
listing, NAV per share has increased by significantly
more than RPI, as can be seen on the chart on page 16.
Given the increase in interest rates, the Company
increased its discount rate twice during the year to a
level that is similar to that which applied at listing a
decade ago. As at 31 December 2022, the blended
portfolio discount rate was 8.0 per cent. This is an
unlevered discount rate and is therefore different to the
discount rates quoted by peers. The equivalent levered
discount rate (assuming 30 per cent gearing) is
approximately 10 per cent, which delivers a net return
to investors of approximately 9 per cent. Consequently,
given this greater return, the Company has been and is
able to grow NAV per share significantly more than its
peers in addition to generating a similar dividend yield.
Investment
In June, we completed our £51.2 million acquisition of
Twentyshilling. This followed our acquisition of Windy
Rig in December 2021. Both wind farms were acquired
from Statkraft once they were operational, following
commitments made in 2019. Given current and forecast
high power prices, we expect these investments in fully
merchant wind farms to continue to perform well.
In August, we acquired a net 12.5 per cent stake in
Hornsea 1, a 1,200MW offshore wind farm. Hornsea 1
is our largest single investment (£1.1 billion, 19 per
cent of our portfolio) and provides great stability to our
cash flows through its index linked CFD revenues.
During the year, we also provided a further
£27.4 million of construction finance to the Kype Muir
Extension wind farm project.
We look forward to adding both Kype Muir Extension
and South Kyle to our portfolio in Q2 2023.
Gearing
As at 31 December 2022, Aggregate Group Debt was
£1,780 million, equating to 31 per cent of GAV (limit
40 per cent). Debt outstanding comprised £900 million
of fixed rate term debt at Company level, £200 million
drawn under the Company’s revolving credit facility
and £680 million being the Group’s share of limited
recourse debt in Hornsea 1.
Chairman’s Statement
Greencoat UK Wind PLC Annual Report for the year ended 31 December 2022
02
03
G R E E N C O A T
U K W I N D
Outlook and Strategy
Wind continues to be the most mature and widely
deployed renewable energy technology in the UK (27
per cent of GB electricity generation in 2022) with an
offshore wind target of 50GW for 2030 being an
important Government target in the delivery of 2050
net zero emissions targets. At the same time, the
Government has tried to reduce the effect of very high
gas and power prices that resulted from Russia’s
invasion of Ukraine that have exacerbated the “cost of
living crisis” by introducing a levy on electricity
generators at 45 per cent above an index linked
£75/MWh from 1 January 2023. It is likely that the
Group will pay more tax over the next few years which
will help to lower the cost to consumers.
Throughout 2022, we discounted forecast power
prices significantly given their volatility and also given
the risk of Government intervention. As the details of
the Electricity Generator Levy are now known and
forecast future power prices are now lower, the
discount that we are applying has been reduced
appropriately. This approach has enabled us not just to
maintain NAV from Q3 to Q4, as our peers have mostly
managed, but to increase it as the discount unwinds.
Our Investment Objective has remained unchanged
over the last 10 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 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.
Significantly, during 2022 we invested £1.1 billion into
Hornsea 1, one of the largest offshore wind farms in
the world, increasing the proportion of offshore wind
to 44 per cent of the portfolio and also invested
£79 million into Twentyshilling and Kype Muir
Extension, both subsidy free wind farms. The Group
reinvested £340 million during the year, which is
expected to contribute to further build-out of
renewables capacity in the UK. We expect to continue
to see a range of attractive CFD (largely offshore) 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 dividend cover, coupled
with our disciplined approach, we are confident in our
ability to continue to meet the objectives of dividend
growth in line with RPI and capital preservation in
real terms.
Health and Safety and the Environment
As a responsible investor in operating wind farms, the
Company takes its health and safety responsibilities
very seriously. We work with our Investment Manager
to promote the highest standard of health, safety and
environmental management practices in managing our
portfolio of investments. Detailed key performance
indicators and the results of audits are regularly
reviewed by the Board and action taken where
necessary. We continue to monitor the standards
maintained by the operators of our wind farm
investments, to ensure that these are at least in
line with the wider industry, while seeking continuous
improvement.
Climate Change
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. Detailed disclosures can be found
in the Strategic Report on pages 29 to 32.
Chairman’s Statement continued
Braes of Doune
Chairman’s Statement continued
The Board and Governance
At the AGM, I will retire from the Board and Lucinda
Riches C.B.E. will become the new Chairman, with Nick
Winser C.B.E. also taking over the role as the
Company’s Senior Independent Director.
I am the last of the original Board and have greatly
enjoyed my role in helping build a Company that
started a new sector and has been so influential in
enabling fresh capital to come into that sector, building
out so much new renewable generating capacity as a
consequence of doing so. I leave the Company in very
good hands and will look forward to watching its
progress as an interested observer.
The external evaluation of the Board raised no
significant issues.
The Group’s governance is further described in the
Corporate Governance Report on pages 44 to 49.
Annual General Meeting
Our AGM will take place at 2pm on 28 April 2023 at
the office of the Investment Manager.
Details of the formal business of the meeting are set
out in a separate circular which is sent to shareholders
with the Annual Report.
Shonaid Jemmett-Page
Chairman
22 February 2023
Greencoat UK Wind PLC Annual Report for the year ended 31 December 2022
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.
In April, Schroders plc completed the acquisition of a 75 per cent interest in the Investment Manager.
The Investment Manager continues to operate as an independent business as 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 over £700 billion.
Investment Manager’s Report
Investment Manager’s Report continued
06
Greencoat UK Wind PLC Annual Report for the year ended 31 December 2022
Investment Portfolio
Operating portfolio as at 31 December 2022:
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 Erova 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 EnergyPro Centrica 69.5 100% 69.5
Cotton Farm Senvion EnergyPro 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 BT 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 EnergyPro 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
Hornsea 1 Siemens Orsted CFD 1,200.0 12.5% 150.0
Humber Gateway Vestas RWE RWE 219.0 37.8% 82.8
Kildrummy Enercon EnergyPro 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 2 Enercon SSE SSE 18.8 100% 18.8
Stronelairg Vestas SSE SSE 227.7 35.5% 80.9
Stroupster Enercon EnergyPro 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
Twentyshilling Vestas Statkraft Statkraft 37.8 100% 37.8
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 1,609.8
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 Hornsea 1
22 Humber Gateway
23 Kildrummy
24 Langhope Rig
25 Lindhurst
26 Little Cheyne Court
27 Maerdy
28 Middlemoor
29 North Hoyle
30 North Rhins
31 Red House
32 Red Tile
33 Rhyl Flats
34 Screggagh
35 Sixpenny Wood
36 Slieve Divena
37 Slieve Divena 2
38 Stronelairg
39 Stroupster
40 Tappaghan
41 Tom nan Clach
42 Twentyshilling
43 Walney
44 Windy Rig
45 Yelvertoft
25
28
8
5
12
18
26
2
15
19
31
32
36
3
23
11
27
7
41
16
30
35
45
39
34
24
4
40
9
13
6
20
38
37
43
22
21
33
29
17
14
1
10
42
44
Investment Manager’s Report continued
08
Greencoat UK Wind PLC Annual Report for the year ended 31 December 2022
Investment Portfolio continued
Breakdown of operating portfolio by value as at 31 December 2022:
Onshore/Offshore Geography
Asset Age Turbine Manufacturer
Assets
Hornsea 1 (19%)
Clyde (8%)
Stronelairg (7%)
Burbo Bank Extension (4%)
Dunmaglass (3%)
Other (31%)
Humber Gateway (10%)
Walney (8%)
Corriegarth (4%)
Brockaghboy (3%)
Tom nan Clach (3%)
Siemens (38%)
Vestas (36%)
Enercon (9%)
Nordex (7%)
Senvion (5%)
GE (5%)
< 5 years (36%)
> 10 years (22%)
5-10 years (42%)
England (48%)
Scotland (39%)
Northern Ireland (9%)
Wales (4%)
Onshore (56%)
Offshore (44%)
09
G R E E N C O A T
U K W I N D
Portfolio Performance
Portfolio generation for the year was 4,362GWh, 5 per cent below budget.
Portfolio generation was slightly above budget for the first half of the year, but fell below budget in the second
half of the year as a result of low wind.
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%
2022 -5% -5%
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).
Investment Manager’s Report continued
Hornsea 1
Investment Manager’s Report continued
10
Greencoat UK Wind PLC Annual Report for the year ended 31 December 2022
Portfolio Performance continued
The following table provides a breakdown of generation by wind farm:
Annual 2022 2022
Budget Budget Actual
Wind Farm (GWh) (GWh) (GWh) Variance
Andershaw 105.5 105.5 107.8
(1)
2%
Bicker Fen 44.3 44.3 41.1 -7%
Bin Mountain 23.4
(5)
23.2 20.4 -12%
Bishopthorpe 50.6 50.6 44.5 -12%
Braes of Doune 167.8 167.8 165.4
(1)
-1%
Brockaghboy 156.0 156.0 143.5 -8%
Burbo Bank Extension 155.0 150.2
(4)
133.2 -11%
Carcant 17.1 17.1 18.0 5%
Church Hill 37.1 37.1 35.8 -4%
Clyde 452.3
(5)
436.6
(4)
427.8
(1)
-2%
Corriegarth 216.2 216.2 192.1
(1)
-11%
Cotton Farm 51.0 51.0 43.0 -16%
Crighshane 59.7 59.7 59.2 -1%
Deeping St. Nicholas 29.6 29.6 29.1 -2%
Douglas West 129.2 129.2 127.4
(1)
-1%
Drone Hill 30.3 30.3 30.1 -1%
Dunmaglass 129.9 129.9 120.9
(1)
-7%
Earl’s Hall Farm 31.9 31.9 25.4 -20%
Glass Moor 28.8 28.8 25.5 -12%
Glen Kyllachy 145.7 145.7 155.5
(1)
7%
Hornsea 1 657.5 241.6
(2)
245.7
(1)
2%
Humber Gateway 320.4 320.4 307.7 -4%
Kildrummy 55.6 55.6 49.6 -11%
Langhope Rig 47.1
(5)
46.7 42.2 -9%
Lindhurst 11.5 11.5 10.6 -8%
Little Cheyne Court 61.0 61.0 53.2 -13%
Maerdy 63.1 63.1 55.2 -12%
Middlemoor 68.3 68.3 65.8 -4%
North Hoyle 185.8 185.8 165.8 -11%
North Rhins 37.8 37.8 36.7
(1)
-3%
Red House 22.4
(5)
21.8 19.8 -9%
Red Tile 42.0 42.0 39.1 -7%
Rhyl Flats 70.3 70.3 67.2 -4%
Screggagh 44.4
(5)
44.3 41.3 -7%
Sixpenny Wood 28.5 28.5 25.7 -10%
Slieve Divena 54.9 54.9 50.3 -8%
Slieve Divena 2 48.7 48.7 47.3 -3%
Stronelairg 302.6 302.6 283.7
(1)
-6%
Stroupster 94.9 94.9 83.3 -12%
Tappaghan 68.6
(5)
68.0 60.7 -11%
Tom nan Clach 121.8 121.8 130.0
(1)
7%
Twentyshilling 125.6 59.7
(3),(4)
56.6
(1)
-5%
Walney 355.6 355.6 327.3 -8%
Windy Rig 138.5 138.5 133.3
(1)
-4%
Yelvertoft 21.7 21.7 18.5 -15%
Total 5,109.8 4,605.5 4,362.0 -5%
(1)
Includes curtailed generation.
(2)
Generation from September to December 2022.
(3)
Generation from July to December 2022.
(4)
2022 budget reduced to reflect scheduled grid outages (Clyde), major component replacements (Burbo Bank Extension) and grid load
management (Twentyshilling).
(5)
Annual budget increased to reflect turbine upgrades (Bin Mountain, Clyde, Langhope Rig, Screggagh and Tappaghan) and reduced
electrical losses (Red House).
Portfolio Performance continued
Notable issues affecting portfolio availability were:
• a blade failure at Windy Rig;
• long duration outages at Corriegarth due to generator issues and a shortage of skilled technicians;
• various stops due to major component replacements and delays in spares procurement at Burbo
Bank Extension;
• various pitch motor exchanges and generator issues at Dunmaglass; and
• work scheduling issues affecting availability of parts and technicians at Cotton Farm, Earl’s Hall Farm
and Yelvertoft.
In general, the portfolio performed well and in line with expectations.
During the year, the Investment Manager ran a tender for operational management services at Corriegarth,
Cotton Farm, Earl’s Hall Farm, Kildrummy and Stroupster. As a result, new Operational Management Agreements
were entered into with EnergyPro Asset Management.
Health and Safety and the Environment
Health and safety is of key importance to both the Company and the Investment Manager.
The Investment Manager is an active member of SafetyOn, the UK’s leading health and safety focused
organisation for the onshore wind industry. The Investment Manager also has its own health and safety forum,
chaired by Stephen Lilley, where best practice is discussed and key learnings from incidents from across the
industry are shared.
During the year, routine health and safety audits were conducted across 20 sites by an independent consultant.
In addition, the Investment Manager undertook 90 safety walks. No material areas of concern were identified
from all audits and safety walks performed in the year.
The Company has continued to contribute to local community funds and to invest in a range of local
environmental and social projects. In addition, the Investment Manager explored ways to provide grant funding
to academic research and non-profit projects to develop the industry’s knowledge on wind turbine blade recycling,
and we have launched a £250,000 programme to advance knowledge on blade recycling, repurposing and
recovery, as well as associated skills development in this area.
During the year, the portfolio generated sufficient electricity to power 1.5 million homes and avoided CO
2
emissions of approximately 1.7 million tonnes through the displacement of thermal generation.
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 2022
Investment
During the year, the Investment Manager priced 42 wind farms totalling 2,297MW. Of the 42 wind farms priced,
1 new investment was made by the Group (Hornsea 1), 1 was acquired by another buyer, 6 are no longer being
pursued by the Group, and 34 are subject to continuing discussions. In total, secondary market transactions
comprising 27 UK wind farms were completed in 2022.
The following table lists investments in the year to 31 December 2022:
£m
Kype Muir Extension (construction finance) 27.4
Windy Rig (deferred consideration) 3.1
Twentyshilling 51.2
Hornsea 1 1,101.9
(1)
Total 1,183.6
(1)
Includes £699.4m of limited recourse debt.
During the year, the Group provided a further £27.4 million of construction finance to the Kype Muir Extension
wind farm project (target commissioning in Q2 2023). As at 31 December 2022, the Group’s total investment in
Kype Muir Extension (including accrued interest) was £39.4 million. The Group has entered into arrangements to
acquire a 49.9 per cent stake in Kype Muir Extension once fully commissioned for a headline consideration of
£51.4 million. The construction loan will be repaid in full upon acquisition.
On 24 June 2022, the Group acquired Twentyshilling from Statkraft for a total consideration of £51.2 million
(commitment made in 2019). The Group also paid £3.1 million of deferred consideration in relation to Windy Rig,
acquired from Statkraft in December 2021.
On 26 August 2022, the Group acquired a net 12.5 per cent stake in Hornsea 1 from Global Infrastructure Partners
for a total cash consideration (including cash and working capital) of £402.5 million. The Group’s share of limited
recourse debt was £699.4 million, giving a total enterprise value of £1,101.9 million for the Group’s net 12.5 per
cent stake.
The acquisition of the South Kyle wind farm from Vattenfall for £320 million is expected to complete in Q2 2023
once fully commissioned (commitment made in 2020).
Foundation at Kype Muir Extension
13
G R E E N C O A T
U K W I N D
Gearing
As at 31 December 2022, Aggregate Group Debt was £1,780 million, equating to 31 per cent of GAV (limit 40 per
cent). Debt outstanding comprised £900 million of fixed rate term debt at Company level, £200 million drawn
under the Company’s revolving credit facility and £680 million being the Group’s share of limited recourse debt
in Hornsea 1.
More details in relation to the Company’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 £203.79/MWh (2021: £117.43/MWh). The average price captured by merchant assets
in the portfolio (before PPA discounts) was £181.76/MWh (2021: £103.35/MWh). The capture discount in the
year was thus 11 per cent, which compares with a 30 per cent discount to the forward curve assumed in the
31 December 2022 NAV.
Net cash generated by the Group and wind farm SPVs was £560.1 million, providing cover of 3.2x dividends paid
during the year.
Cash balances (Group and wind farm SPVs) increased by £43.8 million to £160.9 million over the year.
For the year ended
31 December 2022
Group and wind farm SPV cash flows £’000
Net cash generation
(1)
560,077
Dividends paid (175,800)
Acquisitions
(2)
(484,153)
Acquisition costs (4,667)
Equity issuance —
Equity issuance costs (42)
Net drawdown under debt facilities 150,000
Upfront finance costs (1,663)
Movement in cash (Group and wind farm SPVs) 43,752
Opening cash balance (Group and wind farm SPVs) 117,099
Closing cash balance (Group and wind farm SPVs) 160,851
Net cash generation 560,077
Dividends 175,800
Dividend cover 3.2x
(1)
Alternative Performance Measure as defined on page 120.
(2)
Excludes £699,451k of limited recourse debt acquired in Hornsea 1.
Investment Manager’s Report continued
Investment Manager’s Report continued
14
Greencoat UK Wind PLC Annual Report for the year ended 31 December 2022
Financial Performance continued
The following 2 tables provide further detail in relation to net cash generation of £560.1 million:
For the year ended
31 December 2022
Net Cash Generation – Breakdown £’000
Revenue 981,752
Operating expenses (234,439)
Tax (122,910)
SPV level debt interest (9,848)
SPV level debt amortisation (19,947)
Other 21,838
Wind farm cash flow 616,446
Management fee (29,556)
Operating expenses (2,141)
Ongoing finance costs (28,026)
Other 2,507
Group cash flow (57,216)
VAT (Group and wind farm SPVs) 847
Net cash generation 560,077
For the year ended
31 December 2022
Net Cash Generation – Reconciliation to Net Cash Flows from Operating Activities £’000
Net cash flows from operating activities
(1)
545,851
Movement in cash balances of wind farm SPVs
(2)
28,770
Repayment of shareholder loan investment
(1)
13,482
Finance costs
(1)
(29,689)
Upfront finance costs
(3)
1,663
Net cash generation 560,077
(1)
Consolidated Statement of Cash Flows.
(2)
Note 9 to the financial statements.
(3)
£1,163k professional fees plus £500k facility arrangement fees per note 13 to the financial statements.
Little Cheyne Court
15
G R E E N C O A T
U K W I N D
Investment Performance
£m
NAV at 31 December 2021 3,093.7
Investment 1,183.6
Movement in portfolio valuation 383.9
Movement in cash (Group and wind farm SPVs) 43.8
Movement in other relevant liabilities (2.2)
Movement in Aggregate Group Debt (829.5)
NAV at 31 December 2022 3,873.2
The following table provides further detail in relation to the movement in portfolio valuation of £383.9 million:
£m pence per share
Increase in forecast power prices 766.0 33.0
Electricity Generator Levy (176.9) (7.6)
Increase in inflation assumptions 336.4 14.5
Increase in discount rate used in the DCF valuation (241.0) (10.4)
Depreciation and other assumption changes (300.6) (13.0)
Movement in portfolio valuation 383.9 16.6
Total dividends of £175.8 million were paid in 2022. Total dividends of £178.9 million have been paid or declared
with respect to 2022 (7.72 pence per share). The target dividend with respect to 2023 is 8.76 pence per share
(increased in line with December 2022 RPI).
£m
Power
prices
Increased
inflation
assumptions
Electricity
Generator Levy
Increase in
discount
rate
Depreciation
and other
assumption
changes
Movement in
portfolio
valuation
0
100
200
300
400
500
600
700
800
900
1,000
Investment Manager’s Report continued
Investment Performance continued
pence per share per cent
NAV at 31 December 2021 133.5
Less February 2022 dividend (1.8)
NAV at 31 December 2021 (ex dividend) 131.7
NAV at 31 December 2022 167.1
Less February 2023 dividend (1.9)
NAV at 31 December 2022 (ex dividend) 165.2
Movement in NAV (ex dividend) 33.5 25.4
Dividends with respect to the year 7.7 5.9
Total return on NAV 41.2 31.3
The chart below shows NAV per share versus RPI:
NAV vs RPI
The chart below shows TSR versus market peers:
Total Shareholder Return vs Market Peers (Bloomberg)
Greencoat UK Wind
Bluefield Solar
Income Fund
The Renewables
Infrastructure Group
Foresight Solar Fund
John Laing Environmental
Assets Group
Next Energy
Solar Fund
%
Dec
2020
Dec
2013
Dec
2014
Dec
2015
Dec
2016
Dec
2017
Dec
2018
Dec
2019
Dec
2021
90
110
130
150
170
190
210
230
250
270
290
Dec
2022
RPI (rebased to 98)
NAV per share (ex dividend)
Dec
2013
Dec
2014
Dec
2015
Dec
2017
Dec
2016
Pence
Dec
2018
Dec
2019
Dec
2020
Dec
2021
96
100
104
108
112
116
120
124
128
132
136
140
144
148
152
156
160
164
168
172
Dec
2022
Investment Manager’s Report continued
16
Greencoat UK Wind PLC Annual Report for the year ended 31 December 2022
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 2022 31 December 2021
£’000 £’000
Operating portfolio 5,458,334 3,919,545
Construction portfolio 39,414 10,702
Cash (wind farm SPVs) 141,068 112,298
Fair value of investments
(1)
5,638,816 4,042,545
Cash (Group) 19,783 4,801
Other relevant liabilities (5,867) (3,647)
GAV 5,652,732 4,043,699
Aggregate Group Debt
(1)
(1,779,504) (950,000)
NAV 3,873,228 3,093,699
Reconciling items ——
Statutory net assets 3,873,228 3,093,699
Shares in issue 2,318,089,989 2,317,097,822
NAV per share (pence) 167.1 133.5
(1)
Includes £679,504k of limited recourse debt at Hornsea 1, not included in the Consolidated Statement of Financial Position.
Investment Manager’s Report continued
Burbo Bank Extension
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 2022 was 8.0 per cent (31 December
2021: 7.2 per cent), which includes an aggregate 0.8 per cent increase in the underlying discount rate during the
year reflecting higher interest rates.
The DCF valuation is produced by discounting the individual wind farm cash flows on an unlevered basis.
The equivalent levered discount rate (assuming 30 per cent gearing) is approximately 10 per cent.
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. Higher inflation assumptions are used for 2023 (8.0 per cent RPI and 5.0 per cent 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 16 January 2023 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):
£/MWh (real 2023)
0
20
40
60
80
100
120
140
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
2051
2052
2053
2054
2055
2056
2057
2058
2059
2060
Investment Manager’s Report continued
Greencoat UK Wind PLC Annual Report for the year ended 31 December 2022
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 2023, fixed cash flows are forecast to contribute 50 per cent of total cash flows (50 per cent merchant).
Over the life of the portfolio, fixed cash flows are forecast to contribute 55 per cent of the total DCF value
(45 per cent merchant).
The following chart shows the forecast portfolio cash flow split by revenue type:
Portfolio cash flow 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
£m
2023
2024
2025
2026
2027
2028
2029
2030
2031
2032
2033
2034
2025
2036
2037
2038
2039
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2041
2042
2043
2044
2045
2046
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2048
2049
2050
2051
2052
2053
Fixed Merchant
0
100
200
300
400
500
600
700
Outlook
There are currently over 28GW of operating UK wind farms (14GW onshore plus 14GW offshore). In monetary
terms, the secondary market for operating UK wind farms amounts to approximately £100 billion. The Group’s
market share is approximately 6 per cent. As at 31 December 2022, the average age of the portfolio was 7 years
(versus 5 years at listing in March 2013).
Driven by recent security of supply and cost concerns, as well as by net zero climate objectives, the UK is now
targeting 50GW of offshore wind by 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. Over 10GW of total
capacity was awarded in CFD Allocation Round 4, announced on 7 July 2022.
It is anticipated that the Group will continue to invest in ROC, CFD and subsidy free wind farms. 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. The average N2EX Day
Ahead auction price was £203.79/MWh (2021: £117.43/MWh). Forward power prices over the period 2023-2026
remain high. High power prices again drove strong cash generation in 2022 and the Group should continue to
benefit from strong cash generation over the next few years through its balanced exposure to power prices.
High power prices have inevitably been considered by the Government in the context of balancing the country’s
fiscal position. We now have clarity in relation to the Electricity Generator Levy at a rate of 45 per cent of annual
average power revenue above an index linked £75/MWh. CFDs are excluded from the levy and the Group also
benefits from a £10 million annual allowance. The levy applies from 1 January 2023 until 31 March 2028. The levy
has been fully modelled and incorporated into the cash flow forecast that underlies the calculation of NAV. We
believe that the new clarity should lead to a material reduction in the “uncertainty discount” that has affected the
sector during the second half of last year. We continue to apply a conservative discount to future power prices,
albeit at an appropriately reduced level. The net result has been a material increase in NAV per share.
The Government’s Review of Electricity Market Arrangements (“REMA”) continues, with a second round of
consultation expected shortly. The aim of REMA is to accommodate a higher proportion of renewable
generation and storage on the electricity network in line with the UK’s target to decarbonise the electricity
sector by 2035. The ultimate market design is thus expected to be supportive for the Group’s portfolio and for
further investment opportunities.
Two other key macro themes during the year were high inflation and rising interest rates. As noted on page 18,
we have increased the blended portfolio discount rate by an aggregate 0.8 per cent to 8.0 per cent reflecting
higher interest rates. Nonetheless, the effect of the increased discount rate has been more than offset by
increased inflation given the index linked nature of the portfolio cash flows (as noted on page 15, +15 pence in
NAV per share from an increase in inflation assumptions and -10 pence from an increase in the discount rate). We
believe that the index linked nature of portfolio cash flows is an important consideration for investors.
It is also important to note that 8.0 per cent is the unlevered discount rate. The equivalent levered discount rate
(assuming 30 per cent gearing) is approximately 10 per cent. The Company’s ongoing charges ratio is less than
1 per cent (as set out on page 21). Thus the net return to investors should be approximately 9 per cent.
Assuming a dividend yield of 5 per cent, the 9 per cent total return would be delivered through a combination
of dividends (5 per cent) and growth in NAV per share (4 per cent). Given the underlying index linked nature of
the portfolio cash flows, both the dividend yield and growth in NAV per share benefit from a high degree of
inflation protection. 2022 dividend cover was 3.2x and, in line with the Company’s dividend policy, the target
dividend for 2023 has been increased by December’s RPI to 8.76 pence per share.
We believe that a 9 per cent total return, with inflation protection, should be very attractive to investors in the
new higher interest rate environment.
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.
20
Greencoat UK Wind PLC Annual Report for the year ended 31 December 2022
Investment Manager’s Report continued
Introduction
The Directors present their Strategic Report for the
year ended 31 December 2022. Details of the Directors
who held office during the year and as at the date of
this report are given on pages 33 to 35.
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 2022
dividend of 7.72 pence per annum is targeted to
increase in line with December 2022 RPI to 8.76 pence
for 2023. Progress on the objectives is measured by
reference to the key metrics on page 1.
Investment Policy
The Group invests in UK wind farms predominantly
with a capacity of over 10MW.
Low gearing ensures that the annual dividend is
sufficiently protected against lower power prices. This
means that the Group also has the ability to benefit
from higher power prices as it is not required to enter
into long term fixed price contracts.
The Group used debt facilities to make additional
investments in the year and intends to continue to use
short term debt facilities to make further investments.
The Group will look to repay its short term debt
facilities by refinancing them with longer term debt
facilities or in the equity markets in order to refresh its
debt capacity. While debt facilities are drawn, the
Group benefits from an increase in investor returns
because borrowing costs are below the underlying
return on investments.
The Board believes that there is a significant market in
which the Group can continue to grow over the next
few years.
Structure
The Company is a UK registered investment company
with a premium listing on the London Stock Exchange.
The Group comprises the Company and Holdco.
Holdco invests in SPVs which hold the underlying wind
farm assets. The Group employs Schroders Greencoat
LLP as its Investment Manager.
Discount Control
The Articles of Association require a continuation vote
by shareholders if the share price were to trade at an
average discount to NAV of 10 per cent or more over
a 12 month period. 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 0.93 per
cent of the weighted average NAV for the year to
31 December 2022. This is made up as follows and has
been calculated using the AIC recommended
methodology.
31 December 2022 31 December 2021
£’000 % £’000 %
Total management fee 31,348 0.87% 23,406 0.92%
Directors’ fees 338 0.01% 270 0.01%
Other ongoing expenses
(1)
1,970 0.05% 1,359 0.05%
Total 33,656 0.93% 25,035 0.98%
Weighted average NAV 3,622,216 2,550,739
(1)
Other ongoing expenses do not include £1,383k of management
and administration fees relating to the wind farm SPVs that is
recharged to them, £54k of Board effectiveness review fees and
£253k of broken deal costs.
Assuming no further changes in NAV, the 2023
ongoing charges ratio is expected to be 0.91 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 33 to 35.
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.
G R E E N C O A T
U K W I N D
Strategic Report
21
Principal Risks and Uncertainties continued
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.
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.
Financing Risk
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.
Investment Returns Become Unattractive
Higher interest rates 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 or both. Both would increase the investment
return and thus would provide a high 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.
Strategic Report continued
22
Greencoat UK Wind PLC Annual Report for the year ended 31 December 2022
23
G R E E N C O A T
U K W I N D
Strategic Report continued
Risks Affecting Investee Companies continued
Wind Resource
The investee companies’ revenues are dependent
upon wind conditions, which will vary across seasons
and years within statistical parameters. The standard
deviation of energy production is 10 per cent over a
12 month period (less than 2 per cent over 30 years).
Since long term variability is low, there is no significant
diversification benefit to be gained from geographical
diversification across weather systems.
The Group does not have any control over the wind
resource but has designed its dividend policy such that
it can withstand significant short term variability in
production relating to wind. Before investment, the
Group carries out extensive due diligence and relevant
historical wind data is available over a substantial
period of time. The other component of wind energy
generation, a wind farm’s ability to turn wind into
electricity, is mitigated by purchasing wind farms,
where possible, with a proven operating track record.
When acquiring wind farms that have only recently
entered into operation, only limited operational data is
available. In these instances, the acquisition
agreements with the vendors of these wind farms will
include a ‘‘wind energy true-up’’ or an appropriate
discount to the purchase price.
Asset Life
In the event that the wind turbines do not operate for
the period of time assumed by the Group or require
higher than expected maintenance expenditure to
do so, it could have a material adverse effect on
investment returns.
The Group performs regular reviews and ensures that
maintenance is performed on all wind turbines across
the wind farm portfolio. Regular maintenance ensures
the wind turbines are in good working order, consistent
with their expected life-spans.
Health and Safety and the Environment
The physical location, operation and maintenance of
wind farms may, if inadequately assessed and
managed, pose health and safety risks to those
involved. Inappropriate wind farm operation and
maintenance may result in bodily injury, particularly if
an individual were to fall from height, fall or be crushed
in transit from a vessel to an offshore installation or be
electrocuted. If an accident were to occur in relation to
one or more of the Group’s investments and if the
Group were deemed to be at fault, the Group could be
liable for damages or compensation to the extent such
loss is not covered by insurance policies. In addition,
adverse publicity or reputational damage could follow.
The Board reviews health and safety at each of its
scheduled Board meetings and Martin McAdam serves
as the appointed Health and Safety Director. 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 68, the Directors have a reasonable
expectation that the Company and the Group have
adequate resources to continue in operational
existence from the date of approval of this report to at
least February 2024. Accordingly, they continue to
adopt the going concern basis in preparing the
financial statements.
Deeping St. Nicholas
Longer Term Viability
As further disclosed on page 44, 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 21 to
23, 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 30, 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.
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 7.72 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
2022. The Board is confident that with the Group’s
continuing strong cash flow and dividend cover, the
Company can target a dividend of 8.76 pence per
share for 2023, 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.
Investments
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 did not issue any further
shares through equity raisings.
Board Composition
During the year, Nick Winser C.B.E. was appointed as
a non-executive Director of the Company with effect
from 1 January 2022 and Lucinda Riches C.B.E.
succeeded William Rickett C.B. as Senior Independent
Director, with effect from 28 April 2022, following his
retirement from the Board.
As disclosed on page 45, the Board engaged Condign
Board Consulting to perform a full external review of
the effectiveness of the Board during the year. The
independent review included a review of the Board’s
culture and concluded that the Board and its
committees were committed and appropriately
composed to promote the success of the Company.
Greencoat UK Wind PLC Annual Report for the year ended 31 December 2022
24
Strategic Report continued
G R E E N C O A T
U K W I N D
25
Strategic Report continued
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 1.6GW of installed capacity
across 45 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 18.8TWh of clean energy, saving
7.4 million tonnes of CO
2
.
During the year, the Group’s wind farms generated
4,362GWh of renewable electricity. By the end of 2022,
the portfolio was generating sufficient electricity to
power 1.8 million homes and avoiding approximately
2.0 million tonnes of CO
2
emissions 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 and applies as
investments are being made and continuously during
the life of each wind farm. The Investment Manager
assesses how ESG should be managed and the
Company has developed its ESG policy in accordance
with the Investment Manager’s ESG 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 under management;
• engage with and support the local communities;
• perform due diligence on third parties; and
• ensure business integrity with a focus on avoiding
money laundering, negligent or corrupt practices.
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 continues to face a serious climate
challenge, and the UK is taking an active role as a
global leader in greenhouse gas emissions reduction.
The Company supports the UK Government’s strategy
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;
Strategic Report continued
26
Greencoat UK Wind PLC Annual Report for the year ended 31 December 2022
CASE STUDY
Peatland Management
Healthy peatlands provide food and shelter to wildlife
and are valuable biodiversity resources. They are also
critical to mitigating climate change. Peatlands store
large quantities of carbon which can be easily
disturbed and released through overgrazing, burning,
cutting and drainage, activities that may occur during
the construction of a wind farm. Unless properly
managed, the carbon released during construction
can adversely affect the carbon payback period of a
project, undermining one of the core objectives of
renewable energy generation, which is to reduce net
greenhouse gas emissions. The Group proactively
manages peat restoration works on all sites.
At Dunmaglass, monitoring surveys were completed
during the year and the next phase of peatland
restoration, covering 10-12 hectares, began.
At Tappaghan, the main focus is on managing grazing and improving drainage. Grazing on peatlands is a
delicate balance. Too many livestock can lead to overgrazing and peat erosion and too little or no grazing
can lead to a build-up of leaf litter and old, woody vegetation, which makes it difficult for low-growing
peatland plants to compete. When tall grass or shrubs dominate the overall species of the area, diversity
declines and the risk of wildfires can also increase. Fencing an area of peatland on site helped to maintain
low stocking densities during the summer period and prevented grazing over winter. To raise water levels,
strip pile dams were installed along a drainage channel within the surrounding area, which promotes the
growth of a variety of bog mosses, which are key species in building blanket bog habitat.
Dunmaglass peatland
27
Strategic Report continued
G R E E N C O A T
U K W I N D
Environmental, Social and Governance continued
Environment continued
• 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.
During the year, the Investment Manager also set up its
first grant-making programme in partnership with
BizGive, an online platform that connects organisations
to external impact partners, such as universities,
charities and community groups. In addition to regular
community funding, a £250,000 impact programme was
launched to fund and support academic research and
non-profit projects that advance the industry’s
knowledge around wind turbine blade recycling,
repurposing and recovery. The programme attracted
applications relating to a wide range of unique projects,
with successful applicants due to be announced shortly.
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
Worker safety is a top priority for the Group. The
Group also recognises the need for people to be paid
fairly for the work they do and to have appropriate
working conditions. 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:
• complying with all applicable laws relating to
employment, occupational health and safety,
human rights, prevention of human trafficking and
modern slavery, public safety and security and
community matters, including the Wind Turbine
Safety Rules;
• implementing health and safety best practices
through wind farm specific health and safety
policies, project management, contractual
arrangements, staff training and stakeholder
education;
• assessing and monitoring health and safety
practices through wind farm specific risk
identification and prevention activities. 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 90 wind farms;
independent health and safety audits by an
accredited professional at 20 wind farms; and 10
lifting operations and equipment audits; and
• reporting on key health and safety data regularly,
with escalation and rapid response procedures in
place in case of emergency.
CASE STUDY
Clyde and the green skills training centre in South
Lanarkshire
Providing communities that once depended on the
fossil fuel industry with new training and employment
opportunities is one of the ways the Group can
support the transition to the net zero economy.
During the year, Clyde provided funding of £149,367
for the development of a state-of-the-art training
centre in South Lanarkshire, Scotland that is providing
former mining communities with the skills required in
the green economy. As well as accreditations in home
insulation, each student has a designated employment
coach to ensure that every successful graduate will
secure a green job from a local employer. The project
aims to provide 250 jobs over the course of 3 years to
the South Lanarkshire community.
Green skills initiative
28
Greencoat UK Wind PLC Annual Report for the year ended 31 December 2022
Strategic Report continued
Environmental, Social and Governance continued
Social continued
Supporting worker safety and fair employment on
our sites continued
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 provides financial support to local groups through
community benefit schemes that fund local projects.
These funds help deliver a range of services, from
improving local amenities and infrastructure to aiding
educational projects for local schools.
Diversity
The Board has a policy to base appointments on merit
and against objective criteria, with due regard for the
benefits of diversity, including both gender and ethnic
diversity. Its objective is to attract and maintain a Board
that, as a whole, comprises an appropriate balance of
skills and experience.
The Board consists of individuals from relevant and
complementary backgrounds offering experience in
the investment management of listed funds, as well as
in the energy sector from both a public policy and a
commercial perspective. As at the date of this report,
the Board comprised 2 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. Currently, the Chairman, Audit Committee
Chairman and Senior Independent Director positions
are all held by women who represent 60 per cent of
Directors on the Board. The Board is cognisant that it
does not currently have ethnic representation, contrary
to the new FCA diversity guidelines, and this will be a
key focus during future succession planning.
Andershaw
29
Strategic Report continued
G R E E N C O A T
U K W I N D
Environmental, Social and Governance continued
Social continued
Diversity continued
The Board recognises the importance of an inclusive
and diverse Board in facilitating a collaborative culture
and enhancing the delivery of the Company’s strategic
objectives. The Board will continue to monitor and
actively work on ensuring that it maintains and nurtures
a Board that is as diverse as possible.
The Investment Manager operates an equal
opportunities policy and its partners and employees
comprise 72 men and 32 women.
Governance
Detailed disclosure on the Company’s governance
structure and activities can be found in the Corporate
Governance Report on pages 44 to 49.
Task Force on Climate Related Financial Disclosures
(TCFD)
The Company strives to maintain the highest standards
of corporate governance and effective risk identification
and management at both Group and wind farm level.
The Company supports the recommendations of the
TCFD and refers to them for guidance on addressing
climate related risks and opportunities across the Group
and enhancing our disclosure.
These disclosures are categorised between the
4 thematic areas as recommended by the TCFD.
Governance
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. In addition,
companies are increasingly required to demonstrate
their adherence to reducing their carbon footprints
and this may increase demand for corporate PPAs and
could provide the Group with an option to fix power
prices, should it decide to do so, and mitigate volatility.
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
take advantage of weather systems. 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.
Climate related risks can be classified into two broad
categories: (i) risks associated with the transition to a
decarbonised economy; and (ii) risks associated with
the physical impacts of climate change.
30
Greencoat UK Wind PLC Annual Report for the year ended 31 December 2022
Strategic Report continued
Task Force on Climate Related Financial Disclosures
(TCFD) continued
Strategy continued
High Transition Risk Scenario
The Board and the Investment Manager continue to
believe that the key factor that could impact the
Company in the transition to a lower carbon economy
is the variability of long term prices for wholesale
electricity. In a lower carbon economy, where
considerable build-out of renewable generation
capacity will be required, there is a risk that the power
price received by the Group’s portfolio could be
negatively impacted, depending on how successful the
Government is in implementing its plan and depending
on future electricity market design including the
REMA consultation.
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 and
the REMA consultation does not conclude in
significantly different market design. In this scenario,
the long term power price is lower than the base case
used to calculate the Company’s NAV. The lower long
term power price, provided by a leading market
consultant, reflects the wider deployment of low
marginal cost renewable generation capacity, partially
offset by the expected deployment of electrolysers as
part of a growing hydrogen economy, increased
electrification of transport and heat and the build-out
of data centres. Modelling the lower long term power
price would equate to approximately an 18 pence
reduction in NAV per share.
The base case long term power price assumes
significant renewable generation and other measures
to reduce carbon emissions and represents the
independent consultant’s best estimate of likely
outturn. The High Transition Risk Scenario assumes
further measures. The precise effect on power price of
any measures (in the base case and in the High
Transition Risk Scenario) is highly uncertain and is
highly dependent on future electricity market design.
The High Transition Risk Scenario also assumes no
other offsetting factors.
High Physical Risk Scenario
Physical risks may consist of acute physical risk, which
can refer to event driven perils including increased
severity and frequency of extreme weather events, and
chronic physical risk, which can refer to longer term
shifts in climate patterns that cause sea level rises, heat
waves, droughts and desertification.
The Board and the Investment Manager continue to
believe that a scenario where global temperature
increases are significantly higher than 2°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
systems 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.
During the year, the Investment Manager, with the
assistance of an independent consultant, completed a
risk modelling exercise for a representative sample of
the Group’s SPV investments reflecting climate related
hazard exposure over a future period of time.
31
Strategic Report continued
G R E E N C O A T
U K W I N D
Task Force on Climate Related Financial Disclosures
(TCFD) continued
Metrics and Targets
The world continues to face a serious climate
challenge, and the UK is taking an active role as a
global leader in greenhouse gas emissions reduction.
The Government’s net zero strategy includes:
• complete decarbonisation of the electricity sector
by 2035;
• 50GW of offshore wind capacity by 2030;
• 70GW of solar PV capacity by 2035;
• 10GW of low carbon hydrogen production
capacity by 2030;
• 24GW of nuclear capacity by 2050;
• 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 CO
2
emissions on
a net basis at a rate of approximately 0.4t CO
2
per
MWh. Given the size of the Group’s investment portfolio
on 31 December 2022, the portfolio’s contribution to
reducing CO
2
emissions is approximately 2.0 million
tonnes per annum. The portfolio is also generating
sufficient electricity to power 1.8 million homes per
annum, at 2.9MWh per home.
Humber Gateway
32
Greencoat UK Wind PLC Annual Report for the year ended 31 December 2022
Strategic Report continued
Rhyl Flats generator exchange
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 2022
Scope 1 – direct emissions
(tonnes CO
2
) 149
Scope 2 – indirect emissions
(tonnes CO
2
) 1,422
Scope 3 – indirect emissions
(tonnes CO
2
)
(1)
136,161
Total Scope 1, 2 and 3 emissions
(tonnes CO
2
) 137,732
(1)
Scope 3 emissions are the result of activities from assets not
owned or controlled by the Group, but that the Group indirectly
impacts in its value chain. Scope 3 emissions include all sources
not within the Group’s Scope 1 and 2 boundary and include, inter
alia, emissions arising from the construction of each wind farm
acquired in the year, including those emissions associated with
the manufacturing and transport of all equipment and material,
before the wind farm was commissioned, as well as the expected
spare part provision throughout its lifetime.
It is the Investment Manager’s view that Scope 3
emissions are less meaningful given the Company’s
strategy of investing in UK wind farms for the duration
of their asset lives. Furthermore, recognising a wind
farm’s construction and whole life operating emissions
in the year the Group acquires it is potentially
misleading as it both overestimates carbon emissions
in the year of acquisition and underestimates carbon
emissions generated in every other year.
The carbon payback of a wind turbine, essentially how
quickly it offsets the emissions generated during its
manufacture, transportation and on-site construction,
is an indicator of its contribution to accelerating energy
transition. At current rates, carbon payback is typically
around 5-6 months for onshore and 8 months for
offshore wind farms, which is approximately 3 per cent
of the assumed asset life. Carbon footprint indicators
are measured in line with the industry standard
Greenhouse Gas Protocol based on an equity control
approach, meaning emissions from the Group’s
operations are weighted according to the Group’s
proportionate ownership of its SPV investments.
EU Sustainable Financial Disclosure Regulation
(SFDR)
The Company became Article 9 qualified under EU
SFDR during the year and makes sustainability related
disclosures in the financial services sector. Through its
Investment Policy of investing in UK wind farms
predominately with a capacity over 10MW, the
Company contributes to the environmental objective
of climate change mitigation that helps to facilitate the
transition to a low carbon economy.
Detailed Annex V disclosures and the Company’s
principal adverse impacts statement can be found on
pages 100 to 116.
On behalf of the Board
Shonaid Jemmett-Page
Chairman
22 February 2023
33
Board of Directors
G R E E N C O A T
U K W I N D
As at the date of this report, the Board comprises 5 individuals from relevant and complementary backgrounds.
During the year and with effect from the conclusion of the 2022 AGM on 28 April 2022, William Rickett C.B.
retired from the Board and Lucinda Riches C.B.E. was appointed as Senior Independent Director.
The Directors are of the opinion that the Board as a whole comprises an appropriate balance of skills, experience
and diversity.
Shonaid Jemmett-Page, Chairman (appointed 5 December 2012)
Shonaid Jemmett-Page, (Chairman) FCA (Director), aged 62, is an experienced
non-executive director in the energy and financial sectors. Shonaid spent the
first 20 years of her career at KPMG in London and Tokyo, rising to the position
of Partner, Financial Services. In 2001, she moved to Unilever, where she was
Senior Vice President, Finance and Information for Asia, based in Singapore,
before returning to the UK as Finance Director for Unilever’s global non-food
business. In 2009, Shonaid joined CDC Group as Chief Operating Officer, a
position she held until 2012.
Since then, Shonaid has focused on non-executive appointments and is
currently Chairman of Cordiant Digital Infrastructure Limited as well as
Chairman of its nominations and management engagement committees,
Senior Independent Director of ClearBank Ltd and Chairman of its audit and remuneration committees and a
member of its nomination and risk committees, non-executive Director of Aviva plc as well as Chairman of its
customer and sustainability committee and a member of its nomination and governance, risk and audit
committees, and non-executive Director of QinetiQ Group plc and Chairman of its audit committee and a member
of its risk and security, remuneration and nomination committees. Until April 2018 she was non-executive Director
of GKN plc where she served as Chairman of its audit committee and was a member of its remuneration and
nominations committees. Until November 2019 she was non-executive Director of MS Amlin plc where she served
as Chairman and was also the Chairman of its remuneration and nominations committees and a member of its risk
and solvency committee. Until March 2020 she served as non-executive Chairman and then non-executive Director
of MS Amlin Insurance SE (a Belgian subsidiary of MS Amlin plc), and until May 2022 she was a non-executive
Director of Caledonia Investments plc where she served as Chairman of its remuneration committee and a
member of its governance, nomination and audit committees. She is also the examiner of the UK branch of an
Indian children’s cancer charity.
Caoimhe Giblin, Chairman of the Audit Committee (appointed 1 September 2019)
Caoimhe Giblin (Director and Audit Committee Chairman), aged 46, 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.
Lucinda Riches C.B.E., Senior Independent Director (appointed 1 May 2019)
Lucinda Riches C.B.E. (Senior Independent Director), aged 61, brings
significant capital markets experience, having advised public companies on
strategy, fundraising and investor relations for many years. She also brings
extensive experience as a public company non-executive director across a
variety of businesses, including two FTSE 100 companies.
Lucinda worked at UBS and its predecessor firms for 21 years until 2007 where
she was a managing director, global head of Equity Capital Markets and a
member of the board of the investment bank. She is Chairman of Peel Hunt
Limited and a non-executive Director of Ashtead Group plc. Previously she was
a non-executive Director of UK Financial Investments, a non-executive Director
of The Diverse Income Trust plc, Senior Independent Director of The British Standards Institution and until 2021
she was a non-executive Director of CRH plc and Senior Independent Director of ICG Enterprise Trust plc. She
was awarded a C.B.E. in 2017 for her services to financial services, British industry and to charity.
Martin McAdam (appointed 1 March 2015)
Martin McAdam (Director), aged 61, 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.
Nick Winser C.B.E. (appointed 1 January 2022)
Nick Winser C.B.E. (Director), aged 62, 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 Chairman. Nick has been the Chairman of Energy Systems Catapult
since 2015 and was appointed Chairman of the Advisory Board for the Energy
Revolution ISCF programme in 2018 and served on the Advisory Panel for the
Cost of Energy Review in 2017.
Nick is a member of the Institute of Engineering and Technology, 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 former
Chairman of the MS Society and a former member of the Board of the
Kier Group.
34
Greencoat UK Wind PLC Annual Report for the year ended 31 December 2022
Board of Directors continued
35
G R E E N C O A T
U K W I N D
Board of Directors continued
William Rickett C.B., (appointed 4 December 2012 and retired 28 April 2022)
William Rickett C.B., aged 70, 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 5 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.
William retired from the Board with effect from 28 April 2022.
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
QinetiQ Group plc
Cordiant Digital Infrastructure Limited
Aviva plc
Lucinda Riches C.B.E.
Ashtead Group plc
Peel Hunt Limited
With the exception of Shonaid Jemmett-Page, the Directors have all offered themselves for re-election and
resolutions concerning this will be proposed at the 2023 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.
The Directors present their Annual Report, together
with the consolidated financial statements of
Greencoat UK Wind PLC for the year to 31 December
2022. The Corporate Governance Report on pages 44
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 33
to 35.
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 2023
AGM. Special resolution 14 will be proposed at the
forthcoming AGM seeking renewal of such authority
until the next AGM (or 30 June 2024, 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 14.
The Directors also recommend shareholders to vote in
favour of resolutions 11, 12 and 13, 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 10 February 2023 are
detailed below.
Ordinary
shares held %
10 February
Shareholder 2023
BlackRock Investment Management 8.00
Newton Investment Management 6.67
Rathbone Investment Management 5.72
Investec Wealth & Investment 4.69
Schroder Investment Management 3.71
Evelyn Partners 3.23
Significant shareholdings as at 31 December 2022 are
detailed below.
Ordinary
shares held %
31 December
Shareholder 2022
BlackRock Investment Management 8.00
Newton Investment Management 6.59
Rathbone Investment Management 5.77
Investec Wealth & Investment 4.69
Schroder Investment Management 3.38
Evelyn Partners 3.29
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;
• there exist no agreements to which the Company
is party that may affect its control following a
takeover bid;
Report of the Directors
36
Greencoat UK Wind PLC Annual Report for the year ended 31 December 2022
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G R E E N C O A T
U K W I N D
Companies Act 2006 Disclosures continued
• 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 pages 28 to 29.
Directors’ Indemnity
Directors’ and Officers’ liability insurance cover is in
place in respect of the Directors. The Company’s
Articles of Association provide, subject to the
provisions of UK legislation, an indemnity for Directors
in respect of costs which they may incur relating to the
defence of any proceedings brought against them
arising out of their positions as Directors, in which they
are acquitted or judgement is given in their favour by
the Court.
Except for such indemnity provisions in the Company’s
Articles of Association and in the Directors’ letters of
appointment, there are no qualifying third party
indemnity provisions in force.
Streamlined Energy Carbon Reporting
As the Group has outsourced operations to third
parties, there are no significant greenhouse gas
emissions to report from the operations of the Group.
The Group qualifies as a low energy user and is
therefore exempt from disclosures on greenhouse gas
emissions and energy consumption.
The underlying assets of the Group’s investee
companies are renewable energy generators which
avoid CO
2
emissions on a net basis (at a rate of
approximately 0.4t CO
2
per MWh and approximately
2.0 million tonnes per annum given the size of the
Group’s investment portfolio as at 31 December 2022).
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 32.
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
During the year, the Company conducted a formal and
competitive audit tender process in line with the
requirements of the Statutory Auditors and Third
Country Auditors Regulations (SATCAR) for Public
Interest Entities (PIEs) to conduct an external audit
tender every 10 years. The Directors consider it to be
in the best interests of the Company and its
Shareholders to 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 2023 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 2022 are
received and adopted by the shareholders and a
resolution concerning this will be proposed at the
2023 AGM.
Dividend
The Board recommended an interim dividend of
£44.7 million, equivalent to 1.93 pence per share with
respect to the 3 month period ended 31 December
2022, bringing total dividends with respect to the year
to £178.9 million, equivalent to 7.72 pence per share as
disclosed in note 8 to the financial statements.
Report of the Directors continued
Subsequent Events
Significant subsequent events have been disclosed in
note 21 to the financial statements.
Strategic Report
A review of the business and future outlook, going
concern statement and the principal risks and
uncertainties of the Group have not been included in
this report as they are disclosed in the Strategic Report
on pages 21 to 32.
On behalf of the Board
Shonaid Jemmett-Page
Chairman
22 February 2023
Report of the Directors continued
Burbo Bank Extension
38
Greencoat UK Wind PLC Annual Report for the year ended 31 December 2022
39
G R E E N C O A T
U K W I N D
This report has been prepared by the Directors in accordance with the requirements of the Companies Act 2006
and the Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008. A resolution
to approve the Directors’ Remuneration Report will be proposed at the 2023 AGM. At the AGM on 28 April
2022, shareholders voted 99.93 per cent in favour to approve the Directors’ Remuneration Report for the year
ended 31 December 2021.
The Company’s Auditor is required to give their opinion on the information provided on Directors’ remuneration
on pages 39 to 41 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 33 to 35, consists solely of non-executive Directors and is considered to be
independent. The Board considers at least annually the level of the Board’s fees, in accordance with the AIC Code.
Remuneration Policy
As at the date of this report, the Board comprised 5 Directors, all of whom are non-executive. The Board does
not have a separate Remuneration Committee as, being wholly comprised of non-executive Directors, the whole
Board considers these matters.
At the AGM on 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. No changes are expected for 2023 and this policy will next be put
to a vote by Shareholders at the 2023 AGM.
Each Director receives a fixed fee per annum based on their roles and responsibility within the Company and the
time commitment required. It is not considered appropriate that Directors’ remuneration should be performance
related and none of the Directors are eligible for pension benefits, share options, long term incentive schemes
or other benefits in respect of their services as non-executive Directors of the Company.
The Company’s Articles of Association empower the Board to award a discretionary bonus where any Director has
been engaged in exceptional work on a time spent basis to compensate for the additional time spent over their
expected time commitment.
The Articles of Association provide that Directors retire and offer themselves for re-election at the first AGM after
their appointment and at least every 3 years thereafter. However, in accordance with AIC Code, the Directors are
required to be re-elected annually. All of the Directors have been provided with letters of appointment for an initial
term of 3 years and for each 3 year term thereafter, which are subject to annual re-election in accordance with
the AIC Code. The following table outlines the effective date and expiry date of each of the Directors’ current
letters of appointment:
Effective date of current Expiry date of current
appointment letter appointment letter
Shonaid Jemmett-Page 1 May 2020 28 April 2023
Martin McAdam 1 March 2021 29 February 2024
Lucinda Riches C.B.E. 1 May 2022 30 April 2025
Caoimhe Giblin 1 September 2022 31 August 2025
Nick Winser C.B.E. 1 January 2022 31 December 2024
A Director’s appointment may at any time be terminated by and at the discretion of either the Director or the
Company upon 6 months’ written notice. A Director’s appointment will automatically end without any right to
compensation whatsoever if they are not re-elected by the shareholders. A Director’s appointment may also be
terminated with immediate effect and without compensation in certain other circumstances. Being non-executive
Directors, none of the Directors have a service contract with the Company.
The terms and conditions of appointment of non-executive Directors are available for inspection from the
Company’s registered office.
Directors’ Remuneration Report
Annual Report on Remuneration
During the year, the basic fee for non-executive Directors increased by £10,000 per annum to £55,000, with effect
from 1 January 2022, with the Senior Independent Director and the Audit Committee Chairman receiving an
additional £5,000 and £10,000 per annum respectively. The Chairman’s basic fee was also increased by £10,000
to £85,000 per annum.
The level of fees for Directors were benchmarked in 2021 by independent consultants, Nurole, 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 £5.7 billion through acquisitions and equity raisings and, in the last 3 years, the Board and its committees
have held 68 meetings.
The Board takes the view that making discretionary payments to Directors for extra work is better for shareholders
than a permanent increase in the level of Directors’ base fees, however, no discretionary payments were made
during the year.
The table below (audited information) shows the total remuneration earned by each individual Director during the
current year:
Fixed Discretionary Total
Paid in the year to 31 December 2022 remuneration remuneration
(1)
remuneration
Shonaid Jemmett-Page (Chairman) £85,000 — £85,000
Caoimhe Giblin (Audit Committee Chairman) £65,000 — £65,000
Lucinda Riches C.B.E. (Senior Independent Director)
(2)
£58,397 — £58,397
Martin McAdam £55,000 — £55,000
Nick Winser C.B.E. £55,000 — £55,000
William Rickett C.B.
(3)
£19,397 — £19,397
Total £337,794 — £337,794
(1)
The Directors received no additional discretionary payment during the year.
(2)
Appointed as Senior Independent Director with effect from 28 April 2022.
(3)
Retired with effect from 28 April 2022.
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 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.
Directors’ Remuneration Report continued
40
Greencoat UK Wind PLC Annual Report for the year ended 31 December 2022
41
G R E E N C O A T
U K W I N D
Annual Report on Remuneration continued
2022 2021 2020
% change from % change from % change from
Paid in the year to 31 December 2022 prior year
(1)
prior year prior year
Shonaid Jemmett-Page (Chairman) 0% 16% 22%
Caoimhe Giblin (Audit Committee Chairman) 0% 15% 42%
Lucinda Riches C.B.E. (Senior Independent Director)
(2)
6% 10% 11%
Martin McAdam 0% 10% 0%
Nick Winser C.B.E
(3)
100% n/a n/a
William Rickett C.B. 0% 9% 0%
Tim Ingram
(4)
n/a -100% -13%
Dan Badger
(5)
n/a n/a -100%
(1)
Movement in individual Director’s salary based on annualised total figures, including £10k of additional discretionary payments made in
the prior year in connection with share placings.
(2)
Appointed as Senior Independent Director with effect from 28 April 2022.
(3)
Appointed to the Board with effect from 1 January 2022.
(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 2022 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 2022 31 December 2021
Shonaid Jemmett-Page
(1)
131,602 131,602
Martin McAdam 103,689 103,689
Lucinda Riches C.B.E. 120,000 120,000
Caoimhe Giblin 40,000 40,000
(1)
includes 59,570 ordinary shares legally and beneficially owned by her spouse.
Relative Importance of Spend on Pay
The remuneration of the Directors with respect to the year totalled £337,794 (2021: £320,000) in comparison to
dividends paid or declared to shareholders with respect to the year of £178,945,737 (2021: £147,998,434), as
disclosed in note 8 to the financial statements on page 76.
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 following graph shows the TSR
of the Company compared to the FTSE 250 index and the Bloomberg Barclays Sterling Corporate Bond Index:
Directors’ Remuneration Report continued
Total Shareholder Return vs Equity and Bond Indices
On behalf of the Board
Shonaid Jemmett-Page
Chairman
22 February 2023
%
Greencoat UK Wind PLC
Bloomberg Barclays Sterling
Corporate Bond Index
(rebased to 100)
FTSE 250
(rebased to 100)
90
110
130
150
170
190
210
230
250
270
290
Dec
2013
Dec
2014
Dec
2016
Dec
2017
Dec
2018
Dec
2015
Dec
2019
Dec
2020
Dec
2021
Dec
2022
Directors’ Remuneration Report continued
42
Greencoat UK Wind PLC Annual Report for the year ended 31 December 2022
Clyde
43
G R E E N C O A T
U K W I N D
Statement of Directors’ Responsibilities
The Directors are responsible for preparing the Annual
Report and the financial statements in accordance with
applicable law and regulations.
Company law requires the Directors to prepare
financial statements for each financial year. Under that
law the Directors are required to prepare the Group’s
financial statements, and have elected to prepare the
Company’s financial statements, in accordance with UK
adopted international accounting standards and with
the requirements of the Companies Act 2006 as
applicable to companies reporting under those
standards. Under company law the Directors must not
approve the financial statements unless they are
satisfied that they give a true and fair view of the state
of affairs of the Group and Company and of the profit
or loss for the Group for that period.
In preparing these financial statements, the Directors
are required to:
• select suitable accounting policies and then apply
them consistently;
• 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
22 February 2023
This Corporate Governance Report forms part of the
Report of the Directors as further disclosed on
pages 36 to 38. 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 5 non-
executive Directors and represents a range of
investment, financial and business skills and experience.
The Chairman of the Board is Shonaid Jemmett-Page,
however she has confirmed her intention to retire with
effect from the conclusion of the 2023 AGM and will
therefore not seek re-election. 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, whilst having
served more than 9 years on the Board, Shonaid remains
independent as a non-executive Director with a clear
division of responsibilities from the Investment Manager.
The Senior Independent Director is Lucinda Riches
C.B.E.. Following a rigorous, externally supported
selection process, Ms Riches has been selected to
succeed Shonaid as Chairman of the Board and Nick
Winser C.B.E. will be appointed as Senior Independent
Director following the conclusion of the 2023 AGM.
The Board has determined that Ms Riches and
Mr Winser are independent Directors, in accordance
with the provisions of the AIC Code. 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 Shonaid
Jemmett-Page, shall offer themselves for re-election at
the forthcoming AGM. Having considered their
effectiveness, demonstration of commitment to the role,
length of service, attendance at meetings and
contribution to the Board’s deliberations, the Board
approves the nomination for re-election of the Directors.
Corporate Governance Report
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Corporate Governance Report continued
The Board continued
The Company’s view is that the continuity and
experience of its Directors are important and that a
suitable balance needs to be struck with the need for
independence and the refreshing of the skills and
expertise of the Board. The Company believes that
some limited flexibility in its approach to Director
rotation and Chair tenure will enable it to manage
succession planning more effectively, as set out below.
During the year, the Board also commenced a Director
recruitment process with the assistance of an external
recruitment consultant.
The terms and conditions of appointment of non-
executive Directors are available for inspection from
the Company’s registered office.
Chair Tenure Policy
The Company’s policy on Chair tenure is available on
the Company website. Mrs Jemmett-Page joined the
Company in December 2012, bringing her beyond
9 years of tenure but was appointed as Chairman of
the Board in April 2020. The Company’s policy on Chair
tenure is that the Chairman should normally serve no
longer than 9 years as a Director and Chairman but,
where it is in the best interests of the Company, its
shareholders and stakeholders, the Chairman may
serve for a limited time beyond that to help the
Company manage succession planning whilst at the
same time still address the need for regular
refreshment and diversity. In such circumstances the
independence of the other Directors will ensure that
the Board as a whole remains independent.
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. During the year, this formal review was
conducted by Condign Board Consulting, who were
independent from the Board and each of its Directors.
This independent review, which included a review of the
Board’s culture, concluded that the Board and its
committees were committed and appropriately
composed to promote the success of the Company.
A number of recommendations were made, all of which
were embraced by the Board, and certain governance
changes were implemented as a result of this review.
Other recommendations related to the non-executive
Director recruitment process and Chairman succession
planning were considered and adopted during the year.
An internal evaluation of the Board, the Audit
Committee and individual Directors will be conducted
during 2023 in the form of annual performance
appraisals, questionnaires and discussions to determine
effectiveness and performance in various areas, as well
as the Directors’ continued independence and tenure.
This process will be facilitated by the Company
Secretary and the results of this review will be reported
in the next Annual Report.
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.
The Management Engagement Committee met once
during the year and following consultation with
shareholders, the Company agreed certain amendments
to the Investment Management Agreement with the
Investment Manager, as outlined in note 3 to the financial
statements.
Terms of reference for the Management Engagement
Committee have been approved by the Board and are
available on the Company’s website.
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.
The Nominations Committee met 4 times during the
year to consider Director remuneration and Board
succession planning, as well as to commence a Director
recruitment process with the assistance of an external
recruitment consultant, Heidrick & Struggles.
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 Management Agreement was
amended during the year, which applied a refreshed
initial term of 4 years from 1 April 2022 and the
Investment Manager’s appointment is terminable by
the Investment Manager or the Company on not less
than 12 months’ notice thereafter. This is subject to a
reduction to one year’s notice if the shares trade below
NAV for 6 months or more, on average, during the
initial term and a revision to the change of control
clause to limit the remaining term for these purposes
to a maximum of 2 years.
Corporate Governance Report continued
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Corporate Governance Report continued
The Investment Manager continued
The Investment Management Agreement may be
terminated with immediate effect and without
compensation, by either the Investment Manager or
the Company if the other party has gone into
liquidation, administration or receivership or has
committed a material breach of the Investment
Management Agreement.
The Board as a whole reviewed the Company’s
compliance with the UK Corporate Governance Code,
the Listing Rules, the Disclosure Guidance and
Transparency Rules and the AIC Code. In accordance
with the Listing Rules, the Directors confirm that the
continued appointment of the Investment Manager
under the current terms of the Investment
Management Agreement is in the interests of
shareholders. The Board also reviewed the
performance of other service providers and examined
the effectiveness of the Company’s internal control
systems during the year.
Board Meetings, Committee Meetings and
Directors’ Attendance
The number of meetings of the full Board attended in
the year to 31 December 2022 by each Director is set
out below:
Scheduled Additional
Board Meetings Board Meetings
(Total of 5) (Total of 2)
Shonaid Jemmett-Page 5 2
Martin McAdam 5 2
Lucinda Riches C.B.E. 5 2
Caoimhe Giblin 5 2
Nick Winser C.B.E. 5 2
William Rickett C.B.
(1)
30
(1)
Resigned with effect from 28 April 2022, at which point
3 scheduled Board meetings and no additional Board meetings
had taken place.
The number of meetings of the committees of the
Board attended in the year to 31 December 2022 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 4)
Shonaid Jemmett-Page n/a 1 4
Martin McAdam 4 1 4
Lucinda Riches C.B.E.
(1)
4 1 3
Caoimhe Giblin 4 1 4
Nick Winser C.B.E. 4 1 4
William Rickett C.B.
(2)
20 1
(1)
Did not attend a Nomination Committee meeting which related to
her own potential appointment as Chairman of the Board.
(2)
Resigned with effect from 28 April 2022, at which point 2 Audit
Committee meetings, no Management Engagement Committee
meetings and 1 Nomination Committee meeting had taken place.
Internal Control
The Board is responsible for the Company’s system of
internal control and for reviewing its effectiveness. The
Board confirms that it has an ongoing process for
identifying, evaluating and managing the significant
risks faced by the Company. This process has been in
place throughout the year and has continued since the
year end.
The Company’s principal risks and uncertainties are
detailed on pages 21 to 23 of this report. As further
explained in the Audit Committee Report, the risks of
the Company are outlined in a risk matrix which was
reviewed and updated during the year. The Board
continually reviews its policy setting and updates the risk
matrix at least annually to ensure that procedures are in
place with the intention of identifying, mitigating and
minimising the impact of risks should they crystallise.
The Board has a process in place to identify emerging
risks, such as climate related risks, and to determine
whether any actions are required. The Board relies on
reports periodically provided by the Investment
Manager and the Administrator regarding risks that the
Company faces. When required, experts are employed
to gather information, including tax and legal advisers.
The Board also regularly monitors the investment
environment and the management of the Company’s
portfolio, and applies the principles detailed in the
internal control guidance issued by the FRC.
Corporate Governance Report continued
Internal Control continued
The Board holds an annual risk and strategy discussion,
which enables the Directors to consider risk outside the
scheduled quarterly Board meetings. This enables
emerging risks to be identified and discussions on
horizon scanning to occur, so the Board can consider
how to manage and potentially mitigate any relevant
emerging risks.
The principal features of the internal controls systems
which the Investment Manager and Administrator have
in place in respect of the Group’s financial reporting
are focused around the 3 lines of defence model
and include:
• internal 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 also provides 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
drew £200 million of new term debt with AXA, as
disclosed in note 13 to the financial statements.
The Investment Manager conducts presentations with
analysts and investors to coincide with the
announcement of the Company’s full and half year
results, providing an opportunity for discussions and
queries on the Company’s activities, performance and
key metrics. In addition to these semi-annual
presentations, the Investment Manager meets
regularly with analysts and investors to provide further
updates with how the Company and the investment
portfolio are performing.
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.
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Corporate Governance Report continued
Engagement with Stakeholders continued
Relations with Other Stakeholders continued
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 24.
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
22 February 2023
North Rhins
50
Greencoat UK Wind PLC Annual Report for the year ended 31 December 2022
At the date of this report, the Audit Committee
comprised Caoimhe Giblin (Chairman), Martin
McAdam, Lucinda Riches C.B.E. and Nick Winser
C.B.E.. 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 33 to 35
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, 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;
• 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
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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.
BDO LLP attended 2 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.
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.
Greencoat UK Wind PLC Annual Report for the year ended 31 December 2022
52
Internal Control continued
The Audit Committee considers risk and strategy
regularly, and formally reviewed the updated risk
matrix in Q1 2023 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 2022 to determine
that these were unchanged from those disclosed in the
Company’s 2021 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.
Independence
The Audit Committee is required to consider the
independence of the external Auditor. In fulfilling this
requirement, the Audit Committee has considered a
report from BDO LLP describing its arrangements to
identify, report and manage any conflict of interest and
the extent of non-audit services provided by them.
The Audit Committee has concluded that it considers
BDO LLP to be independent of the Company and that
the provision of the non-audit services described
above is not a threat to the objectivity and
independence of the conduct of the audit.
Audit Committee Report continued
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Audit Committee Report continued
External Auditor continued
Re-appointment
BDO LLP has been the Company’s Auditor from its
incorporation on 4 December 2012. The Auditor is
required to rotate the audit partner responsible for the
Group audit every 5 years. A new lead partner was
appointed in 2020 and therefore the lead partner will
be required to rotate after the completion of the 2024
year end audit.
The external audit contract is required to be put to
tender at least every 10 years. During the year, the
Audit Committee conducted a formal and competitive
external audit tender process ahead of the audit for
the year ending 31 December 2022. The process
commenced in early 2022 and a shortlist of suitable
audit firms comprising Big 4 and other firms were
approached and invited to submit a proposal for
consideration. A further shortlist of firms met with the
Audit Committee Chairman and their suitability for the
engagement was evaluated against comprehensive
criteria reflecting experience, independence, audit
approach and ESG considerations. Following a
comprehensive assessment process and discussions
with the Investment Manager, the Board resolved to
reappoint BDO LLP as the Company’s Auditor.
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 2023
AGM of the Company.
Caoimhe Giblin
Chairman of the Audit Committee
22 February 2023
Glen Kyllachy
Greencoat UK Wind PLC Annual Report for the year ended 31 December 2022
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 and of the Parent Company’s
affairs as at 31 December 2022 and of the Group’s profit for the year then ended;
• the Group financial statements have been properly prepared in accordance with UK adopted international
accounting standards;
• the Parent Company financial statements have been properly prepared in accordance with UK adopted
international accounting standards and as applied in accordance with the provisions of the Companies Act
2006; and
• the financial statements have been prepared in accordance with the requirements of the Companies
Act 2006.
We have audited the financial statements of Greencoat UK Wind PLC (the ‘Parent Company’) and its subsidiaries
(the ‘Group’) for the year ended 31 December 2022 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 notes to the financial statements, including a summary of significant
accounting policies. The financial reporting framework that has been applied in their preparation is applicable law
and UK adopted international accounting standards and as regards the Parent Company financial statements, as
applied in accordance with the 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 appointed by the Board of Directors in the
year of incorporation to audit the financial statements for the year ended 31 December 2013 and subsequent
financial periods. The period of total uninterrupted engagement including retenders and reappointments is 10
years, covering the years ending 31 December 2013 to 31 December 2022. We remain independent of the Group
and the Parent Company in accordance with the ethical requirements that are relevant to our audit of the financial
statements in the UK, including the FRC’s Ethical Standard as applied to listed public interest entities, and we have
fulfilled our other ethical responsibilities in accordance with these requirements. The non-audit services prohibited
by that standard were not provided to the Group or the Parent Company.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the Directors’ use of the going concern basis of
accounting in the preparation of the financial statements is appropriate. Our evaluation of the Directors’
assessment of the Group and the Parent Company’s ability to continue to adopt the going concern basis of
accounting included:
• To test the future cash flow forecast prepared by the Directors we agreed the key inputs and assumptions
relating to the long term life of the assets and forecasted power prices used within the valuation models to
supporting documentation and our own understanding as a part of our work over Investment valuation which
has been covered in the Key Audit matter table below;
• 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;
Independent Auditor’s Report
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U K W I N D
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Conclusions relating to going concern continued
• We have reviewed the loan agreements and checked the repayment dates of each one 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; and
• We have challenged the Directors as to how the Group will be able to meet their commitments in respect of
agreed acquisitions and also their plans for repayment of £150 million loan facilities with National Australia
Bank and Commonwealth Bank of Australia due for repayment in November 2023. We note that the Group
has a strong history of raising debt and equity. Based on the assessment performed by us we note that cash
that is forecasted to be generated by the portfolio companies, Group cash available as at 31 December 2022
of £161 million and available balance on the existing RCF facility would be sufficient to meet all the
commitments as they fall due for at least the next 12 months.
Based on the work we have performed, we have not identified any material uncertainties relating to events or
conditions that, individually or collectively, may cast significant doubt on the Group and the Parent Company’s
ability to continue as a going concern for a period of at least twelve months from when the financial statements
are authorised for issue.
In relation to the Parent Company’s reporting on how it has applied the UK Corporate Governance Code, we have
nothing material to add or draw attention to in relation to the Directors’ statement in the financial statements
about whether the Directors considered it appropriate to adopt the going concern basis of accounting.
Our responsibilities and the responsibilities of the Directors with respect to going concern are described in the
relevant sections of this report.
Overview
Coverage 100% (2021: 100%) of Group profit before tax
100% (2021: 100%) of Group revenue
100% (2021: 100%) of Group total assets
Key audit matters 2022 2021
Valuation of investments Yes Yes
Materiality Group financial statements as a whole
£58.1m (2021:£46.4m) based on 1.5% (2021: 1.5%) of net assets.
Specific Materiality
Materiality for items impacting on the realised return was £25.5m (2021: £10.4m) based
on 5% (2021: 5%) of profit before tax, excluding the unrealised valuation movements.
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. There were no other components in the Group.
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit
of the financial statements of the current period and include the most significant assessed risks of material
misstatement (whether or not due to fraud) that we identified, including those which had the greatest effect on:
the overall audit strategy, the allocation of resources in the audit, and directing the efforts of the engagement
team. 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
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Greencoat UK Wind PLC Annual Report for the year ended 31 December 2022
Key audit matters continued
Key audit matter How the scope of our audit addressed the key audit matter
Valuation of
investments
(See note 1 and
note 9 on pages
70 to 71 and
77 to 79)
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 Group.
These estimates include
judgements including future
power prices, wind
generation, discount rates,
asset lives, tax (including
windfall tax), and inflation.
For these reasons we
considered the valuation of
investments to be a key audit
matter.
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 tracked 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.
• 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
prices applied by benchmarking to available industry data
and consulting with our internal valuations specialists.
• 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.
• 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. This includes considering the
accuracy of the modelling of the electricity generator levy.
• Agreed cash and other net current assets to bank
statements and investee company management accounts
as appropriate.
• Considered the accuracy of forecasting by comparing
previous forecasts to actual results.
• For loan investments we vouched to loan agreements and
verified the necessary terms and recalculated the closing
value of the loan and also tested the movement in the loan
balance during the year.
• 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.
Key observations
Based on our procedures performed we found the valuation
estimates and Judgements were within an acceptable range.
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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
2022 2021 2022 2021
£m £m £m £m
Materiality
Basis for determining materiality
Performance materiality
Specific materiality
We also determined that for 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% (2021:5%) of profit before tax, excluding unrealised valuation
movements. We further applied a performance materiality level of 75% (2021:75%) 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% of Group materiality
dependent on our assessment of the risk of material misstatement of each component. In addition to the parent
company the other significant component in the group is Greencoat UK Wind Holdco Limited for which the
Materiality is set at £55.2m (2021:£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
£1,275k (2021:£928k). 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
43.6 34.8 41.4 33.1
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
Parent to 95%.
1.5% net assets 1.5% net assets 95% of Group
materiality
95% of Group
materiality
58.1 46.4 55.2 44.1
Independent Auditor’s Report continued
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Greencoat UK Wind PLC Annual Report for the year ended 31 December 2022
Other information
The Directors are responsible for the other information. The other information comprises the information included
in the annual report other than the financial statements and our auditor’s report thereon. Our opinion on the
financial statements does not cover the other information and, except to the extent otherwise explicitly stated
in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other
information and, in doing so, consider whether the other information is materially inconsistent with the financial
statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated.
If we identify such material inconsistencies or apparent material misstatements, we are required to determine
whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work
we have performed, we conclude that there is a material misstatement of this other information, we are required
to report that fact.
We have nothing to report in this regard.
Corporate governance statement
The Listing Rules require us to review the Directors’ statement in relation to going concern, longer-term viability
and that part of the Corporate Governance Statement relating to the parent company’s compliance with the
provisions of the UK Corporate Governance Code specified for our review.
Based on the work undertaken as part of our audit, we have concluded that each of the following elements of
the Corporate Governance Statement is materially consistent with the financial statements or our knowledge
obtained during the audit.
• The Directors’ statement with regards to the appropriateness of adopting
the going concern basis of accounting and any material uncertainties
identified set out on pages 23 and 24; and
• The Directors’ explanation as to their assessment of the Group’s prospects,
the period this assessment covers and why the period is appropriate set out
on pages 23 and 24.
• Directors’ statement on fair, balanced and understandable set out on
page 37;
• Board’s confirmation that it has carried out a robust assessment of the
emerging and principal risks set out on page 47;
• The section of the annual report that describes the review of effectiveness of
risk management and internal control systems set out on pages 47 and 48;
and
• The section describing the work of the Audit Committee set out on page 50.
Other Code provisions
Going concern and longer-
term viability
Independent Auditor’s Report continued
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G R E E N C O A T
U K W I N D
Other Companies Act 2006 reporting
Based on the responsibilities described below and our work performed during the course of the audit, we are
required by the Companies Act 2006 and ISAs (UK) to report on certain opinions and matters as described below.
In our opinion, based on the work undertaken in the course of the audit:
• the information given in the Strategic report and the Directors’ report for
the financial year for which the financial statements are prepared is consistent
with the financial statements; and
• the Strategic report and the Directors’ report have been prepared in
accordance with applicable legal requirements.
In the light of the knowledge and understanding of the Group and Parent Company
and its environment obtained in the course of the audit, we have not identified
material misstatements in the strategic report or the Directors’ report.
In our opinion, the part of the Directors’ remuneration report to be audited has
been properly prepared in accordance with the Companies Act 2006.
We have nothing to report in respect of the following matters in relation to which
the Companies Act 2006 requires us to report to you if, in our opinion:
• adequate accounting records have not been kept by the Parent Company, or
returns adequate for our audit have not been received from branches not
visited by us; or
• the Parent Company financial statements and the part of the Directors’
remuneration report to be audited are not in agreement with the accounting
records and returns; or
• certain disclosures of Directors’ remuneration specified by law are not made;
or
• we have not received all the information and explanations we require for
our audit.
Responsibilities of Directors
As explained more fully in the Directors’ responsibilities statement, the Directors are responsible for the
preparation of the financial statements and for being satisfied that they give a true and fair view, and for such
internal control as the Directors determine is necessary to enable the preparation of financial statements that are
free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the Directors are responsible for assessing the Group’s and the Parent
Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern
and using the going concern basis of accounting unless the Directors either intend to liquidate the Group or the
Parent Company or to cease operations, or have no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from
material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion.
Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance
with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or
error and are considered material if, individually or in the aggregate, they could reasonably be expected to
influence the economic decisions of users taken on the basis of these financial statements.
Matters on which we are
required to report by
exception
Directors’ remuneration
Strategic Report and
Directors’ Report
Independent Auditor’s Report continued
60
Greencoat UK Wind PLC Annual Report for the year ended 31 December 2022
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:
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.
Independent Auditor’s Report continued
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G R E E N C O A T
U K W I N D
Use of our report
This report is made solely to the Parent Company’s members, as a body, in accordance with Chapter 3 of Part 16
of the Companies Act 2006. Our audit work has been undertaken so that we might state to the Parent Company’s
members those matters we are required to state to them in an auditor’s report and for no other purpose. To the
fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Parent
Company and the Parent Company’s members as a body, for our audit work, for this report, or for the opinions
we have formed.
Peter Smith (Senior Statutory Auditor)
For and on behalf of BDO LLP, Statutory Auditor
London, United Kingdom
22 February 2023
BDO LLP is a limited liability partnership registered in England and Wales (with registered number OC305127).
Independent Auditor’s Report continued
62
Greencoat UK Wind PLC Annual Report for the year ended 31 December 2022
For the year ended For the year ended
31 December 2022 31 December 2021
Note £’000 £’000
Investment income 4 577,156 266,132
Unrealised movement in fair value of investments 9 446,096 155,551
Other income 1,878 1,788
Total income and gains 1,025,130 423,471
Operating expenses 5 (35,346 ) (26,258 )
Investment acquisition costs (3,146 ) (3,305 )
Operating profit 986,638 393,908
Finance expense 13 (32,775 ) (30,689 )
Profit for the year before tax 953,863 363,219
Tax 6— —
Profit for the year after tax 953,863 363,219
Profit and total comprehensive income attributable to:
Equity holders of the Company 953,863 363,219
Earnings per share
Basic and diluted earnings from continuing operations
in the year (pence) 7 41.16 18.30
Consolidated Statement of Comprehensive Income
For the year ended 31 December 2022
The accompanying notes on pages 68 to 97 form an integral part of the financial statements.
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G R E E N C O A T
U K W I N D
31 December 2022 31 December 2021
Note £’000 £’000
Non current assets
Investments at fair value through profit or loss 9 4,959,312 4,042,545
Current assets
Receivables 11 2,487 2,632
Cash and cash equivalents 19,783 4,801
Current liabilities
Loans and borrowings 13 (150,000 ) —
Payables 12 (8,354 ) (6,279 )
Net current (liabilities)/assets (136,084 ) 1,154
Non current liabilities
Loans and borrowings 13 (950,000 ) (950,000 )
Net assets 3,873,228 3,093,699
Capital and reserves
Called up share capital 15 23,181 23,171
Share premium account 15 2,470,396 2,468,940
Retained earnings 1,379,651 601,588
Total shareholders’ funds 3,873,228 3,093,699
Net assets per share (pence) 16 167.1 133.5
Consolidated Statement of Financial Position
As at 31 December 2022
The accompanying notes on pages 68 to 97 form an integral part of the financial statements.
31 December 2022 31 December 2021
Note £’000 £’000
Non current assets
Investments at fair value through profit or loss 9 4,978,816 4,046,365
4,978,816 4,046,365
Current assets
Receivables 11 125 107
Cash and cash equivalents 2,446 1,875
2,571 1,982
Current liabilities
Loans and borrowings 13 (150,000) —
Payables 12 (8,159) (4,648)
Net current liabilities (155,588) (2,666)
Non current liabilities
Loans and borrowings 13 (950,000) (950,000)
Net assets 3,873,228 3,093,699
Capital and reserves
Called up share capital 15 23,181 23,171
Share premium account 15 2,470,396 2,468,940
Retained earnings 1,379,651 601,588
Total shareholders’ funds 3,873,228 3,093,699
Net assets per share (pence) 16 167.1 133.5
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 £953,863,000 (2021: £363,219,000).
Authorised for issue by the Board on 22 February 2023 and signed on its behalf by:
Shonaid Jemmett-Page Caoimhe Giblin
Chairman Director
Statement of Financial Position – Company
As at 31 December 2022
The accompanying notes on pages 68 to 97 form an integral part of the financial statements.
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Greencoat UK Wind PLC Annual Report for the year ended 31 December 2022
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G R E E N C O A T
U K W I N D
Share Share Retained
capital premium earnings Total
For the year ended 31 December 2022 Note £’000 £’000 £’000 £’000
Opening net assets attributable to
shareholders (1 January 2022) 23,171 2,468,940 601,588 3,093,699
Issue of share capital 15 10 1,490 — 1,500
Share issue costs 15 — (34 ) — (34 )
Profit and total comprehensive income for the year — — 953,863 953,863
Interim dividends paid in the year 8— — (175,800 ) (175,800 )
Closing net assets attributable to shareholders 23,181 2,470,396 1,379,651 3,873,228
After taking account of cumulative unrealised gains of £713,442,660 , the total reserves distributable by way of a
dividend as at 31 December 2022 were £666,208,331 .
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 .
Consolidated and Company Statement of Changes in Equity
For the year ended 31 December 2022
The accompanying notes on pages 68 to 97 form an integral part of the financial statements.
For the year ended For the year ended
31 December 2022 31 December 2021
Note £’000 £’000
Net cash flows from operating activities 17 545,851 242,261
Cash flows from investing activities
Acquisition of investments 9 (484,153 ) (565,957 )
Investment acquisition costs (4,667 ) (6,263 )
Repayment of shareholder loan investments 9 13,482 8,731
Net cash flows from investing activities (475,338 ) (563,489 )
Cash flows from financing activities
Issue of share capital 15 — 647,618
Payment of issue costs (42 ) (9,715 )
Amounts drawn down on loan facilities 13 460,000 110,000
Amounts repaid on loan facilities 13 (310,000 ) (260,000 )
Finance costs (29,689 ) (30,976 )
Dividends paid 8 (175,800 ) (138,786 )
Net cash flows from financing activities (55,531 ) 318,141
Net increase/(decrease) in cash and cash equivalents during the year 14,982 (3,087 )
Cash and cash equivalents at the beginning of the year 4,801 7,888
Cash and cash equivalents at the end of the year 19,783 4,801
Consolidated Statement of Cash Flows
For the year ended 31 December 2022
The accompanying notes on pages 68 to 97 form an integral part of the financial statements.
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Greencoat UK Wind PLC Annual Report for the year ended 31 December 2022
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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 2022 31 December 2021
Note £’000 £’000
Net cash flows from operating activities 17 (30,949) (21,668)
Cash flows from investing activities
Loans advanced to Group companies 9 (260,811) (499,800)
Repayment of loans to Group companies 9 347,862 203,990
Net cash flows from investing activities 87,051 (295,810)
Cash flows from financing activities
Issue of share capital 15 — 647,618
Payment of issue costs (42) (9,715)
Amounts drawn down on loan facilities 13 460,000 110,000
Amounts repaid on loan facilities 13 (310,000) (260,000)
Finance costs (29,689) (30,976)
Dividends paid 8 (175,800) (138,786)
Net cash flows from financing activities (55,531) 318,141
Net increase in cash and cash equivalents during the year 571 663
Cash and cash equivalents at the beginning of the year 1,875 1,212
Cash and cash equivalents at the end of the year 2,446 1,875
Statement of Cash Flows – Company
For the year ended 31 December 2022
The accompanying notes on pages 68 to 97 form an integral part of the financial statements.
Notes to the Consolidated Financial Statements
For the year ended 31 December 2022
68
Greencoat UK Wind PLC Annual Report for the year ended 31 December 2022
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Notes to the Consolidated Financial Statements continued
For the year ended 31 December 2022
Notes to the Consolidated Financial Statements continued
For the year ended 31 December 2022
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Notes to the Consolidated Financial Statements continued
For the year ended 31 December 2022
Notes to the Consolidated Financial Statements continued
For the year ended 31 December 2022
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Notes to the Consolidated Financial Statements continued
For the year ended 31 December 2022
Notes to the Consolidated Financial Statements continued
For the year ended 31 December 2022
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Greencoat UK Wind PLC Annual Report for the year ended 31 December 2022
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G R E E N C O A T
U K W I N D
Notes to the Consolidated Financial Statements continued
For the year ended 31 December 2022
Notes to the Consolidated Financial Statements continued
For the year ended 31 December 2022
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G R E E N C O A T
U K W I N D
Notes to the Consolidated Financial Statements continued
For the year ended 31 December 2022
Notes to the Consolidated Financial Statements continued
For the year ended 31 December 2022
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G R E E N C O A T
U K W I N D
Notes to the Consolidated Financial Statements continued
For the year ended 31 December 2022
Notes to the Consolidated Financial Statements continued
For the year ended 31 December 2022
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U K W I N D
Notes to the Consolidated Financial Statements continued
For the year ended 31 December 2022
Notes to the Consolidated Financial Statements continued
For the year ended 31 December 2022
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U K W I N D
Notes to the Consolidated Financial Statements continued
For the year ended 31 December 2022
Notes to the Consolidated Financial Statements continued
For the year ended 31 December 2022
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U K W I N D
Notes to the Consolidated Financial Statements continued
For the year ended 31 December 2022
Notes to the Consolidated Financial Statements continued
For the year ended 31 December 2022
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Greencoat UK Wind PLC Annual Report for the year ended 31 December 2022
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U K W I N D
Notes to the Consolidated Financial Statements continued
For the year ended 31 December 2022
Notes to the Consolidated Financial Statements continued
For the year ended 31 December 2022
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U K W I N D
Notes to the Consolidated Financial Statements continued
For the year ended 31 December 2022
Notes to the Consolidated Financial Statements continued
For the year ended 31 December 2022
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U K W I N D
Notes to the Consolidated Financial Statements continued
For the year ended 31 December 2022
Notes to the Consolidated Financial Statements continued
For the year ended 31 December 2022
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U K W I N D
Notes to the Consolidated Financial Statements continued
For the year ended 31 December 2022
Notes to the Consolidated Financial Statements continued
For the year ended 31 December 2022
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Greencoat UK Wind PLC Annual Report for the year ended 31 December 2022
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U K W I N D
Notes to the Consolidated Financial Statements continued
For the year ended 31 December 2022
Notes to the Consolidated Financial Statements continued
For the year ended 31 December 2022
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Notes to the Consolidated Financial Statements continued
For the year ended 31 December 2022
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Greencoat UK Wind PLC Annual Report for the year ended 31 December 2022
Directors (all non-executive)
Shonaid Jemmett-Page (Chairman)
Martin McAdam
Lucinda Riches C.B.E.
Caoimhe Giblin
Nick Winser C.B.E.
William Rickett C.B.
(1)
Investment Manager
Schroders Greencoat LLP
4th Floor, The Peak
5 Wilton Road
London
SW1V 1AN
Administrator and Company Secretary
Ocorian Administration (UK) Limited
Unit 4, The Legacy Building
Northern Ireland Science Park
Queen’s Road
Belfast
BT3 9DT
Depositary
Ocorian Depositary (UK) Limited
Unit 4, The Legacy Building
Northern Ireland Science Park
Queen’s Road
Belfast
BT3 9DT
Registrar
Computershare Limited
The Pavilions
Bridgwater Road
Bristol
BS99 6ZZ
Registered Company Number
08318092
Registered Office
Registered Auditor
BDO LLP
55 Baker Street
London
W1U 7EU
Joint Broker
RBC Capital Markets
100 Bishopsgate
London
EC2N 4AA
Joint Broker
Jefferies International Limited
100 Bishopsgate
London
EC2N 4JL
Company Information
(1)
Retired from the Board with effect from 28 April 2022.
99
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 104 staff for the financial year
ending 31 December 2022 was £31.5 million,
consisting of £16.0 million fixed and £15.5 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 £2.1 million.
Supplementary Information (unaudited)
Annex V
Template periodic disclosure for the financial products referred to in
Article 9, paragraphs 1 to 4a, of Regulation (EU) 2019/2088 and Article 5,
first paragraph, of Regulation (EU) 2020/852
Product name: Greencoat UK Wind PLC (the “Company”)
Legal entity identifier: 213800ZPBBK8H51RX165
Sustainable investment objective
Did this financial product have a sustainable investment objective? (tick and fill in
as relevant, the percentage figure represents th e minimum commitment t o
sustainable investments)
GG GG
YES
GG GG
NO
It
promoted Environmental/Social
(E/S) characteristics and while it did
not have as its objective a sustainable
investment, it had a proportion of
___% of sustainable investments
with an environmental objective in
economic activities that qualify as
environmentally sustainable under
the EU Taxonomy
with an environmental objective
in economic activities that do
not qualify as environmentally
sustainable under the EU Taxonomy
with a social objective
It promoted E/S characteristics, but did
not make any sustainable investments
To what extent was the sustainable investment objective of this financial product met?
The Company invests in operating UK wind farms, supporting the transition to net zero.
The Company’s aim is to provide investors with an annual dividend per Ordinary Share
that increases in line with RPI inflation while preserving the capital value of its investment
portfolio on a real basis over the long term, through reinvestment of excess cashflow.
The Company has sustainable investment as its objective within the meaning of Article 9
SFDR. More specifically, the Company is intended to contribute to the environmental
objective of climate change mitigation on the basis of the activities of the assets targeted
by the Company, which are wind power generation assets that help to facilitate the
transition to a low carbon economy.
The Company does not have a carbon reduction objective and has not designated a
reference benchmark for the purpose of attaining the sustainable investment objective.
As at 31 December 2022, the Company’s portfolio comprises interests in 45 operating
wind farms totalling 1,610MW capacity. In addition, the Company has committed to
purchase a further two wind farms under construction, totalling 269MW capacity.
It made sustainable investments with
a social objective: ___%
It made sustainable investments with
an environmental objective: 100%
in economic activities that qualify
as environmentally sustainable
under the EU Taxonomy
in economic activities that do
not qualify as environmentally
sustainable under the EU Taxonomy
EU SFDR Disclosures (unaudited)
100
Greencoat UK Wind PLC Annual Report for the year ended 31 December 2022
Sustainable investment
means an investment in
an economic activity
that contributes to an
environmental or social
objective, provided that
the investment does
not significantly harm
any environmental or
social objective and
that the investee
companies follow good
governance practices.
Sustainability indicators
measure how the
sustainable objectives
of this financial product
are attained.
The EU Taxonomy is a
classification system laid
down in Regulation (EU)
2020/852 establishing a
list of environmentally
sustainable economic
activities. That
Regulation does not lay
down a list of socially
sustainable economic
activities. Sustainable
investments with an
environmental objective
might be aligned with
the Taxonomy or not.
101
G R E E N C O A T
U K W I N D
These sustainable investments contribute to the Company’s sustainable investment
objective as the electricity generated from wind farms can be used in place of non
renewable energy sources, thereby helping to stabilise greenhouse gas concentrations in
the atmosphere and contributing to climate change mitigation. These investments are
considered environmentally sustainable in accordance with the technical screening criteria
of the EU Taxonomy relating to the environmental objective of climate change mitigation
and electricity generation from wind power.
GG
How
did the sustainability indicators perform?
The sustainability indicators used to measure attainment of the sustainable investment
objective of the Company performed as follows in the reporting period:
• Renewable energy generated: 4,362GWh
• Greenhouse gas emissions
(1)
avoided:
— Scope 1: 149 tonnes CO
2
— Scope 2: 1,422 tonnes CO
2
— Scope 3: 136,161 tonnes CO
2
• Equivalent number of homes powered: 1.5 million
Carbon footprint indicators are measured in line with the industry standard
Greenhouse Gas Protocol based on an equity control approach, meaning emissions
from the Group’s operations are weighted according to the Group’s proportionate
ownership in its SPV investments.
Scope emissions calculations are verified by third party consultants.
Scope 3 emissions are the result of activities from assets not owned or controlled by
the Group, but that the Group indirectly impacts in its value chain. Scope 3 emissions
include all sources not within the Group’s Scope 1 and 2 boundary and include, inter
alia, emissions arising from the construction of each wind farm acquired in 2022,
including those emissions associated with the manufacturing and transport of all
equipment and material, before the wind farm was commissioned as well as the
expected spare part provision throughout its lifetime.
GG
…a
nd compared to previous periods?
Not applicable as this is the Company’s first reporting period.
GG
Ho
w did the sustainable investments not cause significant harm to any
sustainable investment objective?
The Investment Manager has sought to ensure that the Company’s sustainable
investments cause no significant harm to any sustainable investment objective by
predominately investing in operating wind farms and by actively engaging and
managing sustainability risks and opportunities for the Company and its investments
prior to investment and on an ongoing basis once an investment has been made.
Prior to each investment, the Investment Manager’s Investment Committee,
responsible for the Company, considered the Company’s investment policy,
investment restrictions and the Company’s ESG Policy (a copy of which can be found
on the Company’s website, as well as the sustainability risks and opportunities
identified during due diligence (including by means of an ESG checklist).
Each investment made is held through SPVs and the Investment Manager has
appointed directors to each of the boards of those SPVs to oversee all major strategic
and operational decisions.
EU SFDR Disclosures (unaudited) continued
(1)
The units for greenhouse gas emissions had been incorrectly stated in the pre-investment disclosures and
Annex 3 RTS on the Company’s website in ktes CO
2
e. The Company intends to report such emissions based
on tonnes of CO
2
.
Principal adverse
impacts are the most
significant negative
impacts of investment
decisions on
sustainability factors
relating to
environmental, social
and employee matters,
respect for human
rights, anti‐corruption
and anti‐bribery matters.
Sustainability risks and opportunities have been fully embedded into the risk
management framework at both Company and asset SPV level. A risk matrix has been
set up for each new SPV, which includes sustainability risks and assesses risks (in
respect of the likelihood of its occurrence and the impact of its occurrence) on a
numerical scale.
Ongoing sustainability risks for the portfolio were monitored, managed and reported
on by the Investment Manager to the Company’s Board of Directors which has overall
responsibility for the activities of the Company and its investments. During 2022, there
were no material sustainability related incidents across the portfolio. Specifically with
regards to health and safety, there were 6 lost time incidents.
In addition, the Company complied with the principles of good governance contained
in the AIC Code, which ensures the Company is in accordance with the requirements
of the UK Corporate Governance Code and provides a framework of best practice
for listed investment companies.
How were the indicators for adverse impacts on sustainability factors taken into account?
The Investment Manager considers the Principal Adverse Impacts (“PAIs”) of its
investment decisions relating to the Company on sustainability factors and this informs
its approach to long term investment stewardship and stakeholder engagement.
As the Company predominantly targets investments in operating UK wind farms, the
PAIs that are most relevant to the Company include (but are not limited to):
• Greenhouse gas emissions (Table 1 RTS: PAIs 1-6); and
• Number of workdays lost to injuries, accidents, or illness (Table 3 RTS: PAI 3)
The Investment Manager sought to mitigate the impact of the PAIs and other
indicators considered in relation to the Company firstly by implementing the
Company’s ESG Policy, which has been developed in line with the Investment
Manager’s own ESG Policy. This sets guidance and principles for integrating
sustainability across the Company’s business and looks to establish best practice in
climate related risk management, reporting and transparency. It outlines areas of focus
for wind power generation assets including environment, workplace standards, health
and safety practices, governance (including compliance with applicable laws and
regulations) and local community engagements. It also includes a list of key
performance indicators that are monitored and reported on (as appropriate).
Sustainability factors were considered prior to investment as part of early stage
screening, detailed due diligence and the Investment Committee’s decision making,
and are managed post acquisition in accordance with the Investment Manager’s wider
asset management practices.
A statement on principal adverse impacts on sustainability factors (the “PAI
Statement”), including the list of PAI indicators and associated metrics considered in
relation to the Company, can be found on the Company’s website.
The Investment Manager considers the impacts reported within the PAI Statement
do not constitute significant harm to any sustainable investment objective, as further
described in the PAI Statement.
Were sustainable investments aligned with the OECD Guidelines for Multinational
Enterprises and the UN Guiding Principles on Business and Human Rights? Details:
Yes – the Investment Manager believes that the Company’s sustainable investments
were aligned with the OECD Guidelines for Multinational Enterprises and the UN
Guiding Principles on Business and Human Rights (the “Minimum Safeguards”).
EU SFDR Disclosures (unaudited) continued
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Greencoat UK Wind PLC Annual Report for the year ended 31 December 2022
103
G R E E N C O A T
U K W I N D
During 2022, the Investment Manager conducted initial due diligence (for new
investments) and ongoing monitoring (for existing investments) of the SPVs in which
the underlying wind assets are held to ensure their alignment with the Minimum
Safeguards.
Further, the Investment Manager ensured that the key service providers involved in the
operations, maintenance and management of the SPVs acquired in 2022 comply with
all applicable laws, rules, regulations and overarching principles in the countries where
they operate. This covers anti bribery and corruption, financial crime, data protection
and employment and health and safety laws (including those relating to human rights,
human trafficking, modern slavery, and public safety). This was achieved, where
possible, through the application of the Investment Manager’s ‘Code of Conduct’
Side Letter or otherwise provided for in the key service provider contracts, and
monitoring by the Investment Manager’s risk function.
There has been no material change to any existing service providers, or any reports
by the SPVs of any misalignment to the Minimum Safeguards.
For more information on how the sustainable investment objective of this financial
product was met, please refer to the Company’s ESG Report which can be found on
the Company’s website.
How did this financial product consider principal adverse impacts on sustainability
factors?
See the response to the question above “How were the indicators for adverse impacts on
sustainability factors taken into account."
What were the top investments of this financial product?
Largest investments Sector % Assets Country
Hornsea 1 Wind 19% UK
Humber Gateway Wind 10% UK
Clyde Wind 8% UK
Walney Wind 8% UK
Stronelairg Wind 7% UK
Corriegarth Wind 4% UK
Burbo Bank Extension Wind 4% UK
Brockaghboy Wind 3% UK
Dunmaglass Wind 3% UK
Tom nan Clach Wind 2% UK
What was the proportion of sustainability-related investments?
GG
Wh
at was the asset allocation?
Investments
#1 Sustainable
100%
Environmental
100%
Taxonomy-
aligned (100%)
#2 Not
sustainable 0%
#1 Sustainable
covers sustainable
investments with
environmental or
social objectives.
#2 Not sustainable
includes investments
which do not qualify
as sustainable
investments.
EU SFDR Disclosures (unaudited) continued
The list includes the
investments constituting
the greatest proportion
of investments of the
financial product during
the reference period:
Asset allocation
describes the share of
investments in specific
assets.
GG
In
which economic sectors were the investments made?
All of the Company’s investments are in the economic sector “electricity generation
from wind power” (activity 4.3 of the Climate Change Mitigation Technical Screening
Criteria).
To what extent were sustainable investments with an environmental objective aligned
with the EU Taxonomy?
GG
Di
d the financial product invest in fossil gas and/or nuclear energy related
activities complying with the EU Taxonomy
1
?
The Company did not make any investments in fossil gas or nuclear energy activities.
In line with its Investment Policy, the Company will only invest in UK wind farms.
The graphs below show in green the percentage of investments that were aligned
with the EU Taxonomy. As there is no appropriate methodology to determine the
taxonomy alignment of sovereign bonds*, the first graph shows the Taxonomy
alignment in relation to all the investments of the financial product including
sovereign bonds, while the second graph shows the Taxonomy alignment only in
relation to the investments of the financial product other than sovereign bonds.
1. Taxonomy-alignment of investments 2. Taxonomy-alignment of investments
including sovereign bonds* excluding sovereign bonds*
* For the purpose of these graphs, ‘sovereign bonds’ consist of all sovereign exposures
GG
Wh
at was the share of investments made in transitional and enabling activities?
All activities of the Company are low-carbon activities so the share of investments in
transitional and enabling activities is zero.
GG
How
did the percentage of investments aligned with the EU Taxonomy compare
with previous reference periods?
Not applicable as this is the Company’s first report produced with respect to the EU
Taxonomy alignment of the Company’s investments.
What was the share of sustainable investments with an environmental objective that
were not aligned with the EU Taxonomy
There was no share of sustainable investments with an environmental objective that were
not aligned with the EU Taxonomy. 100 per cent of the Company’s sustainable investments
are in wind generation assets which are considered aligned with the EU Taxonomy in
accordance with the relevant Technical Screening Criteria for climate change mitigation
(activity 4.3).
Turnover
CapEx
OpEx
Taxonomy aligned investments
Other investments
0% 20% 40% 60% 80% 100%
100%
100%
100%
Turnover
CapEx
OpEx
Taxonomy aligned investments
Other investments
0% 20% 40% 60% 80% 100%
100%
100%
100%
EU SFDR Disclosures (unaudited) continued
104
Greencoat UK Wind PLC Annual Report for the year ended 31 December 2022
Taxonomy-aligned
activities are expressed
as a share of:
• turnover reflecting
the share of revenue
from green activities
of investee companies
• capital expenditure
(CapEx) showing the
green investments
made by investee
companies, e.g. for a
transition to a green
economy.
• operational
expenditure (OpEx)
reflecting green
operational activities
of investee
companies.
1
Fossil gas and/or nuclear related activities will only comply with the EU Taxonomy where they contribute to
limiting climate change (“climate change mitigation”) and do no significant harm to any EU Taxonomy
objective – see explanatory note in the left hand margin. The full criteria for fossil gas and nuclear energy
economic activities that comply with the EU Taxonomy are laid down in the Commission Delegated Regulation
(EU) 2022/1214
105
G R E E N C O A T
U K W I N D
What was the share of socially sustainable investments?
0 per cent of the Company’s investments are socially sustainable investments. The
Company does not target sustainable investments with a social objective.
What investments were included under “not sustainable”, what was their purpose
and were there any minimum environmental or social safeguards?
The were no investments included under “#2 Not sustainable”.
What actions have been taken to attain the sustainable investment objective during
the reference period?
The Investment Manager sought to attain the Company’s sustainable investment objective
by implementing the binding elements described in the Company’s pre contractual
disclosures (Annex 3 RTS) on a continuous basis, and by integrating sustainability risks in
its investment decision making as described above: “How did the sustainable investments
not cause significant harm to any sustainable investment objective?”.
Work is underway to enhance the Investment Manager’s processes to measure and monitor
the application of the binding elements. For example, the Investment Manager’s ESG
Policy, upon which the Company’s ESG Policy has been developed, was updated in Q4
2022 to incorporate a list of investment exclusions with the effect of avoiding investment
in activities which the Investment Manager believes to be incompatible with the
Company’s sustainable investment objective. Similarly, new investments are being assessed
against the Technical Screening Criteria as part of normal course pre-investment screening
and recorded as having been assessed in the Investment Committee papers, to determine
the extent of EU Taxonomy alignment of the Company’s sustainable investments.
Further, the Investment Manager continued to engage with stakeholders relevant to the
Group’s portfolio to ensure its renewable investments positively impact the communities
in which they operate. Sustainability-related risks and challenges were regularly discussed
within the Investment Manager’s asset management teams which were also reported to
and discussed with the Board through regular meetings and specific risk register review
discussions. Key sustainability factors such as those relating to health and safety,
compliance with environmental standards and stakeholder relations were regularly
discussed and documented.
For more information on how the sustainable investment objective of this financial product
was met, please refer to the Company’s 2022 ESG Report which can be found on the
Company’s website.
How did this financial product perform compared to the reference sustainable
benchmark?
Not applicable (N/A) as the Company does not have a carbon reduction objective and is
not managed against a reference benchmark
GG
Ho
w did the reference benchmark differ from a broad market index?
N/A
GG
Ho
w did this financial product perform with regard to the sustainability indicators
to determine the alignment of the reference benchmark with the sustainable
investment objective?
N/A
GG
How
did this financial product perform compared with the reference benchmark?
N/A
GG
How
did this financial product perform compared with the broad market index?
N/A
EU SFDR Disclosures (unaudited) continued
Statement on principal adverse impacts “PAIs” of investment decisions
on sustainability factors
Financial Product:
Greencoat UK Wind PLC (LEI: 213800ZPBBK8H51RX165) (the “Company”), managed by Schroders Greencoat
LLP (the “Investment Manager”)
1. Summary
The Investment Manager considers PAIs of its investment decisions on sustainability factors in relation to the
Company. The present statement is the consolidated statement on PAIs on sustainability factors of the Company.
This statement on principal adverse impacts on sustainability factors of the Company covers the reference period
from 1 January to 31 December 2022.
The adverse sustainability indicators applicable to investee companies considered by the Investment Manager are
summarised in the table below (including the relevant table and number associated with the adverse sustainability
indicators listed in Annex I of the RTS
(1)
).
RTS RTS
Annex I Annex I
Theme Adverse Sustainability Indicator Table Number
Greenhouse gas (“GHG”) emissions 11
Carbon footprint 12
GHG intensity of investee companies 13
Exposure to companies active in the fossil fuel sector 14
Share of non renewable energy consumption and production 15
Energy consumption intensity per high impact climate sector 16
Emissions to water 18
Hazardous waste and radioactive waste ratio 19
Natural species and protected areas 2 14
Violations of UN Global Compact principles and Organisation for
Economic Cooperation and Development (OECD) Guidelines for
Multinational Enterprises 1 10
Lack of processes and compliance mechanisms to monitor
compliance with UN Global Compact principles and OECD
Guidelines for Multinational Enterprises 1 11
Exposure to controversial weapons (anti-personnel mines,
cluster munitions, chemical weapons and biological weapons) 1 14
Number of days lost to injuries, accidents or illness 33
Lack of a supplier code of conduct 34
Lack of anti corruption and anti bribery policies 3 15
Social and
employee, respect
for human rights,
anti corruption and
anti bribery matters
Climate and other
environment-related
indicators
EU SFDR Disclosures (unaudited) continued
106
Greencoat UK Wind PLC Annual Report for the year ended 31 December 2022
(1)
The Regulatory Technical Standards accompanying the EU Sustainable Finance Disclosure Regulation.
107
G R E E N C O A T
U K W I N D
Actions taken,
and actions planned
Impact Impact and targets set for the
Adverse sustainability indicator Metric 2022 2021 Explanation next reference period
Climate and Other Environment-Related Indicators
1. GHG emissions Scope 1 GHG emissions 149 tonnes of CO
2
N/A
Scope 2 GHG emissions 1,422 tonnes of CO
2
N/A
Scope 3 GHG emissions 136,161 tonnes of CO
2
N/A
Total GHG emissions 137,732 tonnes of CO
2
N/A
2. Carbon footprint Carbon footprint 137,732 tonnes of CO
2
N/A
3. GHG intensity GHG intensity of 148 tonnes of CO
2
/ N/A
of investee investee companies € million revenue
companies
4. Exposure to Share of investments in 0% N/A
companies active companies active in the
in the fossil fossil fuel sector
fuel sector
5. Share of non Share of non renewable Production share: N/A
renewable energy energy consumption 0% non renewable.
consumption and non renewable Consumption share:
and production energy production of 38% non renewable.
investee companies
from non renewable
energy sources compared
to renewable energy
sources, expressed as
a percentage of total
energy sources
6. Energy Energy consumption in 0% N/A
consumption MWh per million EUR
intensity per high of revenue of investee
impact climate companies, per high
sector impact climate sector
At the end of 2022, the
Investment Manager
formalised its investment
exclusion criteria with
the effect of avoiding
investment in activities
that it believes to be
incompatible with a
sustainable investment
objective. The full list of
exclusions can be found
in the Investment
Manager’s ESG Policy on
the Investment
Manager’s website.
The Group’s wind farm
portfolio generates
renewable electricity that
avoids the carbon
emissions and air
pollution that would have
otherwise been
generated using fossil
fuels. These assets
consume electricity in the
generation of renewable
electricty.
The Group does not have
any exposure to the fossil
fuel sector and will only
invest in UK wind farms in
accordance with its
Investment Objective and
Investment Policy.
The Board and the
Investment Manager
expect to take steps to
reduce the Company’s
future Scope 1 and 2
GHG emissions in 2023.
Carbon footprint
indicators are measured
in line with the industry
standard GHG Protocol
based on an equity
control approach,
meaning emissions from
the Group’s operations
are weighted according
to the Group’s SPV
ownership interest.
Scope emissions
calculations are verified
by third party
consultants.
Scope 3 emissions are
the result of activities
from assets not owned or
controlled by the Group,
but that the Group
indirectly impacts in its
value chain. Scope 3
emissions include all
sources not within the
Company’s Scope 1 and
2 boundary and include,
inter alia, emissions
arising from the
construction of each wind
farm acquired in 2022,
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.
Greenhouse
gas
emissions
2. Description of the PAIs on sustainability factors
EU SFDR Disclosures (unaudited) continued
Actions taken,
and actions planned
Impact Impact and targets set for the
Adverse sustainability indicator Metric 2022 2021 Explanation next reference period
Climate and Other Environment-Related Indicators (continued)
Water 8. Emissions to Tonnes of emissions to N/A N/A
water water generated by
investee companies
per million EUR invested,
expressed as a weighted
average
Waste 9. Hazardous waste Tonnes of hazardous N/A N/A
and radioactive waste and radioactive
waste ratio waste generated by
investee companies
per million EUR invested,
expressed as a weighted
average
Indicators for Social and Employee, Respect for Human Rights, Anti-Corruption and Anti-Bribery Matters
10. Violations of Share of investments in N/A N/A
UN Global investee companies that
Compact have been involved in
principles and violations of the UNGC
Organisation principles or OECD
for Economic Guidelines for
Cooperation Multinational Enterprises
and
Development
(OECD)
Guidelines for
Multinational
Enterprises
Social and
employee
matters
The Company invests in
UK wind farms which are
held through special
purpose vehicles
(“SPVs”), which are
standalone legal entities
that typically do not have
any employees. The SPVs
outsource all operations,
maintenance and
management activities to
third parties, through
long term contracts.
In 2023, the Investment
Manager intends to
commission a number of
ethical audits on key
service providers. The
audit is expected to
reflect direct and indirect
workers: legislation, best
practice, policies,
recruitment processes,
right to work, disciplinary
processes, equal
opportunities, welfare
provision, working hours,
rates of pay, bullying and
harassment, modern
slavery, occupational and
mental health and
freedom of association.
The Investment Manager
conducts initial due
diligence and provides
ongoing monitoring of
SPVs to ensure their
alignment with the
Minimum Safeguards.
Where possible, the
Investment Manager
imposed obligations on
the key service providers
involved in the
operations and
management of the
SPVs to ensure their
ongoing compliance. In
most instances, this was
achieved by the
Investment Manager’s
‘Code of Conduct Side
Letter’ (or an equivalent
standard) which requires
key service providers to
comply with all
applicable laws, rules,
regulations and
overarching principles in
the countries where they
operate (which includes
the Minimum
Safeguards). This covers
anti bribery and
corruption, financial
crime, data protection
and employment and
health and safety laws
(including those relating
to human rights, human
trafficking, modern
slavery, and public
safety).
The Investment Manager
aims to develop a
standard methodology
to assess the alignment
of the key service
providers with the
OECD Guidelines for
Multinational Enterprises
and the UN Guiding
Principles on Business
and Human Rights.
EU SFDR Disclosures (unaudited) continued
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Actions taken,
and actions planned
Impact Impact and targets set for the
Adverse sustainability indicator Metric 2022 2021 Explanation next reference period
Indicators for Social and Employee, Respect for Human Rights, Anti-Corruption and Anti-Bribery Matters (continued)
11. Lack of processes Share of investments N/A N/A
and compliance in investee companies
mechanisms without policies to
to monitor monitor compliance with
compliance with the UNGC principles or
UN Global OECD Guidelines for
Compact Multinational Enterprises
principles or grievance/complaints
and OECD handling mechanisms to
Guidelines for address violations of the
Multinational UNGC principles or
Enterprises OECD Guidelines for
Multinational Enterprises
14. Exposure to Share of investments 0% N/A
controversial in investee companies
weapons involved in the
(anti-personnel manufacture or selling of
mines, cluster controversial weapons
munitions,
chemical
weapons and
biological
weapons)
Table 2 Additional Climate and Other Environment Related Indicators
Actions taken,
and actions planned
Impact Impact and targets set for the
Adverse sustainability indicator Metric 2022 2021 Explanation next reference period
Other Indicators for PAIs on Sustainability Factors
14. Natural species N/A
and protected
areas
Water, waste
and material
emissions
Share of investments in
investee companies
whose operations
affect threatened
species
Share of investments in
investee companies
without a biodiversity
protection policy
covering operational
sites owned, leased,
managed in a
protected area or an
area of high
biodiversity value
outside protected
areas
N/A
Percentage of SPV
investments without
habitat management
plans: 0%
All habitat management
plans are agreed for
relevant sites to ensure
that the environment in
and surrounding each
wind farm is carefully
protected.
Wind farms have the
potential to have a
negative environmental
impact through the
manufacturing and supply
chain process or locally
through the ongoing
management of the
projects. The Company’s
ESG policy helps to
mitigate against these
risks. The policies in place
outline the environmental
standards the Company
aims to meet.
There was and continues
to be a strong
commitment to
continuous improvement
of environmental
management.
Exposure to controversial
weapons is not within the
Company’s Investment
Objective and not
permissible within its
Investment Policy.
At the end of 2022, the
Investment Manager
formalised its investment
exclusion criteria with the
effect of avoiding
investment in activities
that it believes to be
incompatible with a
sustainable investment
objective. The full list of
exclusions can be found
in the ESG Policy on the
Investment Manager’s
website.
Social and
employee
matters
(continued)
The Investment Manager
is enchancing its
processes to monitor the
percentage of
outsourced operations
and maintenance service
providers with policies
addressing the following
issues:
• bribery and corruption;
• data protection and
privacy (including cyber
security);
• governance, business
ethics and integrity;
• Modern Slavery;
• environmental
management;
• workers’ health and
safety; and
• community
engagement.
EU SFDR Disclosures (unaudited) continued
Actions taken,
and actions planned
Impact Impact and targets set for the
Adverse sustainability indicator Metric 2022 2021 Explanation next reference period
Adverse sustainability indicator
3. Number of days Number of workdays Number of workdays N/A
lost to injuries, lost to injuries, lost: 46
accidents, accidents, or illness
or illness in investee companies
Social and
employee
matters
A set of KPIs to
improve health and
safety management
and performance is
monitored
continuously. These are
reported at least on a
monthly basis directly
to the Investment
Manager, the Directors
of the SPVs, and the
Board.
The Investment Manager
has a specific Health,
Safety and
Environmental Plan in
place, which is reviewed
monthly by the
Investment Manager’s
asset management
team. It allows for
efficient planning,
monitoring and tracking
of key management
pillars. The plan includes
policies, safety
statements, audits,
monthly meetings, a
health and safety forum,
incidents and
developing trends
reports, site visits,
onboarding and training.
There is a nominated
Health and Safety
Director for each fully
owned wind farm SPV.
The Board also reviews
health and safety
matters at each of its
scheduled meetings.
There are strong health
and safety policies/
statements in place at
investee company.
These are reviewed
annually, and their
implementation is
audited externally by a
specialist health and
safety consultant.
The portfolio’s site
operators conduct
health and safety audits
on the wind farms.
These independent
audits are undertaken to
support continuous
improvement in health
and safety outcomes on
the wind farm portfolio.
EU SFDR Disclosures (unaudited) continued
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Actions taken,
and actions planned
Impact Impact and targets set for the
Adverse sustainability indicator Metric 2022 2021 Explanation next reference period
Adverse sustainability indicator (continued)
4. Lack of a supplier Share of investments in N/A N/A
code of conduct investee companies
without any supplier
code of conduct
(against unsafe working
conditions, precarious
work, child labour and
forced labour)
Anti 15. Lack of anti Share of investments 0% N/A
corruption corruption and in entities without
and anti anti bribery policies on anti
bribery policies corruption and anti
bribery consistent
with the United
Nations Convention
against Corruption
See ’Social and
employee matters 10 –
14’ above.
The Board and
Investment Manager aim
to develop appropriate
methodology and will
report on accordingly in
2023.
Upon acquisition, all
wholly owned SPV’s are
added to the Group
anti corruption and anti
bribery policies in
place.
See ’Social and
employee matters 10 –
14’ above.
The Board and the
Investment Manager
aims to develop
appropriate
methodology and will
report on accordingly in
2023.
Where possible, the
Investment Manager
imposes obligations on
the key service
providers involved in
the operations and
management of the
portfolio to ensure their
ongoing compliance. In
most instances, this was
achieved by the
Investment Manager’s
‘Code of Conduct Side
Letter’ (or an equivalent
standard) which
requires key service
providers to comply
with all applicable laws,
rules, regulations and
overarching principles
in the countries where
they operate (which
includes the Minimum
Safeguards). This covers
anti bribery and
corruption, financial
crime, data protection
and employment and
health and safety laws
(including those relating
to human rights, human
trafficking, modern
slavery, and public
safety).
See ’Social and
employee matters 10 –
14’ above.
Social and
employee
matters
(continued)
EU SFDR Disclosures (unaudited) continued
3. Description of policies to identify and prioritise PAIs on sustainability factors
The Investment Manager seeks to mitigate the impact of PAIs and other indicators considered in relation to the
Company initially by implementing the Company’s ESG Policy. The Company ESG Policy, which has been
developed in line with the Investment Manager’s ESG Policy (a copy of which can be found on the Investment
Manager’s website), sets guidance and principles for integrating sustainability across the Company’s business
and looks to establish best practice in climate related risk management, reporting and transparency. It outlines
areas of focus for wind farms including environment, workplace standards, health and safety practices, governance
(including compliance with applicable laws and regulations) and local community engagement. It also includes a
list of KPIs that are monitored and reported on as appropriate. Sustainability factors are considered prior to
investment as part of early stage screening, detailed due diligence and the Investment Manager’s Investment
Committee’s decision making, and managed, post acquisition, in accordance with the Investment Manager’s
wider asset management practices.
The Company’s ESG Policy is reviewed at least annually by the Investment Manager’s ESG Committee and
approved by the Board. It was last approved in April 2022.
In implementing its approach to integrating sustainability and the consideration of PAIs on sustainability factors,
the Investment Manager does not rely on a dedicated team, but rather responsibilities are shared on a holistic
basis:
• the investment and asset management team (as the first line of defence) who embed sustainability practices
(including the consideration of PAIs on sustainability factors) into their investment decision making and
ongoing management of the assets;
• a dedicated ESG Committee focused on developing the ESG Policy;
• the Investment Committees; and
• valuation independent of portfolio management and the Investment Manager’s Risk Management Committee
(as overseen by the AIFM).
Sustainability related risks and challenges are regularly discussed within the Investment Manager’s asset
management team and are also reported to and discussed with the Board at quarterly meetings. A specific risk
matrix is also reviewed and approved on an annual basis by the Board. Key sustainability factors such as those
relating to health and safety, compliance with environmental standards and stakeholder relations are regularly
discussed and documented.
The boards of each SPV are responsible for ensuring sustainability factors are considered in the context of the
operational performance, business objectives and broader stakeholder relationships. During the holding period,
representatives of the Investment Manager will take one or more seats on the board of each SPV and will oversee
all major strategic and operational decisions. Given this structure, outside health and safety risks and
organisational (including governance) risks within the SPVs are limited. None of the SPVs have employees or
management teams and therefore any employee related social factors are focused on the third party service
providers.
The Investment Manager’s ESG Committee is responsible for (i) determining the ESG Policy and reviewing it
regularly to ensure it remains relevant to evolving conditions, (ii) developing and evolving sustainability integration
practices for material sustainability factors within the different businesses and assets, (iii) leveraging existing
resources and research capabilities on sustainability related topics for the benefit of the investment management
team, and (iv) promoting education and awareness of sustainability trends and developments and sharing best
practice.
The Investment Manager uses information provided directly from wind farm SPVs in relation to the PAIs. In order
to ensure data quality, the Investment Manager works with specialist external advisers, such as environmental
consultants. These advisers review the Investment Manager’s methodologies for identifying and prioritising PAIs
and advise on industry best practices.
EU SFDR Disclosures (unaudited) continued
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The data collected as described above is processed as follows:
• KPI data is sourced directly from SPVs and supplemented by specialist external advisers such as environmental
consultants, as required;
• operations and maintenance service providers used by the SPVs report to the Investment Manager, on a
monthly basis, on a standard set of KPIs and qualitative factors, such as health and safety, compliance with
relevant laws and regulations, local community engagement and habitat management, where relevant; and
• carbon footprint indicators are measured in line with the industry standard GHG Protocol based on an equity
control approach, meaning emissions from the Company’s operations are weighted according to the
Company or its SPV’s ownership interest. Scope emissions calculations will be verified by third party
consultants.
In some instances, the Company may need to use estimates or proxy data. Where estimated data is used it will
typically represent the minority of data used and will be based upon reasonable assumptions and appropriate
comparators. The Board and the Investment Manager will act reasonably in using estimated or proxy data. As the
use of such data will vary on a case-by-case basis, it is not possible to provide a proportion of estimated data.
Engagement policies
The Company is committed to engaging with all stakeholders relevant to its portfolio to ensure its renewable
investments positively impact the communities in which they operate. The Board and Investment Manager
recognise that engagement is critical to long term sustainable investment and seek to build strong, long term
relationships with high-quality, experienced counterparties to give consistency of service and standards.
References to international standards
The Company proactively engages with the following responsible business codes and/or internationally
recognised standards to promote sustainable investment practices, as discussed in the Company’s ESG report
available on its website:
1. Task Force on Climate Related Financial Disclosures (“TCFD”)
Relevant for Table 1, PAI 1-5 (Greenhouse gas emissions)
The Company aligns with the TCFD recommendations and makes disclosures in the Strategic Report on pages 29
to 32. These disclosures report on climate change related impacts, opportunities and risks to the Company. Given
the Company’s long term investment perspective, the Board and the Investment Manager constantly assess the
risks its portfolio might be exposed to and factors them into decision making and risk monitoring.
EU SFDR Disclosures (unaudited) continued
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EU SFDR Disclosures (unaudited) continued
2. UN Principles of Responsible Investment (“PRI”)
The Investment Manager has been a signatory to the PRI since 2016, committed to adopting the PRI’s 6 principles
of responsible investment.
We have embedded practices that consider ESG risks and opportunities
across all of our investment teams, each applying them as applicable,
across investment identification (screening), due diligence and ongoing
management of the assets
Where applicable, ESG considerations are embedded within our policies
and approach to good governance and oversight. For example, SPVs may
have specific ESG considerations to address based on the nature of the
assets they own, the maturity of the project or asset and the third party
service providers engaged to manage the assets. The SPV boards will
develop their policies and practices accordingly
We undertake a robust investment due diligence process, which includes
ESG factors, when making an investment and will reject any that have
unacceptable ESG related risks which cannot be mitigated
We support the PRI through attendance at its conferences and forums
We proactively share our learnings and approaches to ESG across our
teams and we engage with investors on our PRI reporting as and when
requested. Our PRI reporting forms the foundation for relevant elements
of our investor Due Diligence Questionnaires and Requests for Proposal
Since becoming a PRI signatory, we have continued to report each year
as required and make these reports available to investors who request
them
Historical comparison
None available. The earliest historical comparison will be provided in periodic reporting in respect of financial year
ending December 2023.
Principle 4: We will promote
acceptance and implementation of
PRI within the investment industry
Principle 3: We will seek appropriate
disclosure on ESG issues by the
entities in which we invest
Principle 2: We will be active owners
and incorporate ESG issues into our
ownership policies and practices
Principle 1: We will incorporate ESG
issues into investment analysis and
decision making processes
Principle 6: We will each report on
our activities and progress towards
implementing PRI
Principle 5: We will work together to
enhance our effectiveness in
implementing PRI
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EU SFDR Disclosures (unaudited) continued
Annex
Defined terms used in this statement
For the purposes of this statement, the following definitions shall apply:
(1) Scope 1, 2 and 3 GHG emissions means the scope of greenhouse gas emissions referred to in points
(1)(e)(i) to (iii) of Annex III to Regulation (EU) 2016/1011 of the European Parliament and of the Council
(2)
;
(2) Greenhouse gas (“GHG”) emissions means greenhouse gas emissions as defined in Article 3, point (1), of
Regulation (EU) 2018/842 of the European Parliament and of the Council
(3)
;
(3) Weighted average means a ratio of the weight of the investment by the financial market participant in a
investee company in relation to the GAV of the investee company;
(4) Companies active in the fossil fuel sector means companies that derive any revenues from exploration,
mining, extraction, production, processing, storage, refining or distribution, including transportation,
storage and trade, of fossil fuels as defined in Article 2, point (62), of Regulation (EU) 2018/1999 of the
European Parliament and of the Council
(4)
;
(5) Renewable energy sources means renewable non fossil sources, namely wind, solar (solar thermal and
solar photovoltaic) and geothermal energy, ambient energy, tide, wave and other ocean energy,
hydropower, biomass, landfill gas, sewage treatment plant gas, and biogas;
(6) Non renewable energy sources means energy sources other than those referred to in point (5);
(7) Energy consumption intensity means the ratio of energy consumption per unit of activity, output or any
other metric of the investee company to the total energy consumption of that investee company;
(8) Protected area means designated areas in the European Environment Agency’s Common Database on
Designated Areas (CDDA);
(9) High impact climate sectors means the sectors listed in Sections A to H and Section L of Annex I to
Regulation (EC) No 1893/2006 of the European Parliament and of the Council
(5)
;
(10) Area of high biodiversity value outside protected areas means land with high biodiversity value as
referred to in Article 7b(3) of Directive 98/70/EC of the European Parliament and of the Council
(6)
;
(11) Emissions to water means direct emissions of priority substances as defined in Article 2(30) of Directive
2000/60/EC of the European Parliament and of the Council
(7)
and direct emissions of nitrates, phosphates
and pesticides;
(12) Hazardous waste means hazardous waste as defined in Article 3(2) of Directive 2008/98/EC of the European
Parliament and of the Council
(8)
;
(2)
Regulation (EU) 2016/1011 of the European Parliament and of the Council of 8 June 2016 on indices used as benchmarks in financial
instruments and financial contracts or to measure the performance of investment funds and amending Directives 2008/48/EC and
2014/17/EU and Regulation (EU) No 596/2014 (OJ L 171, 29.6.2016, p. 1).
(3)
Regulation (EU) 2018/842 of the European Parliament and of the Council of 30 May 2018 on binding annual greenhouse gas emission
reductions by Member States from 2021 to 2030 contributing to climate action to meet commitments under the Paris Agreement and
amending Regulation (EU) No 525/2013 (OJ L 156, 19.6.2018, p. 26).
(4)
Regulation (EU) 2018/1999 of the European Parliament and of the Council of 11 December 2018 on the Governance of the Energy Union
and Climate Action, amending Regulations (EC) No 663/2009 and (EC) No 715/2009 of the European Parliament and of the Council,
Directives 94/22/EC, 98/70/EC, 2009/31/EC, 2009/73/EC, 2010/31/EU, 2012/27/EU and 2013/30/EU of the European Parliament and of
the Council, Council Directives 2009/119/EC and (EU) 2015/652 and repealing Regulation (EU) No 525/2013 of the European Parliament
and of the Council (OJ L 328, 21.12.2018, p. 1).
(5)
Regulation (EC) No 1893/2006 of the European Parliament and of the Council of 20 December 2006 establishing the statistical classification
of economic activities NACE Revision 2 and amending Council Regulation (EEC) No 3037/90 as well as certain EC Regulations on specific
statistical domains Text with EEA relevance (OJ L 393, 30.12.2006, p. 1–39).
(6)
Directive 98/70/EC of the European Parliament and of the Council of 13 October 1998 relating to the quality of petrol and diesel fuels
and amending Council Directive 93/12/EEC (OJ L 350, 28.12.1998, p. 58).
(7)
Directive 2000/60/EC of the European Parliament and of the Council of 23 October 2000 establishing a framework for Community action
in the field of water policy (OJ L 327, 22.12.2000, p. 1).
(8)
Directive 2008/98/EC of the European Parliament and of the Council of 19 November 2008 on waste and repealing certain Directives (OJ
L 312, 22.11.2008, p. 3).
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Greencoat UK Wind PLC Annual Report for the year ended 31 December 2022
(13) Radioactive waste means radioactive waste as defined in Article 3(7) of Council Directive
2011/70/Euratom
(9)
;
(14) Threatened species means endangered species, including flora and fauna, listed in the European Red List
or the IUCN Red List, as referred to in Section 7 of Annex II to Delegated Regulation (EU) 2021/2139;
(15) UN Global Compact principles means the ten Principles of the United Nations Global Compact; and
(16) Board means the Directors of the Company.
For the purposes of this Annex, the following formulas shall apply:
(1) ‘GHG emissions’ shall be calculated in accordance with the following formula:
(2) ‘carbon footprint’ shall be calculated in accordance with the following formula:
(3) ‘GHG intensity of investee companies’ shall be calculated in accordance with the following formula:
(4) ‘GHG intensity of sovereigns’ shall be calculated in accordance with the following formula:
(5) ‘inefficient real estate assets’ shall be calculated in accordance with the following formula:
For the purposes of the formulas, the following definitions shall apply:
(1) Current value of investment means the value in EUR of the investment by the financial market participant
in the investee company;
(2) Current value of all investments means the value in EUR of all investments by the financial market
participant;
(3) Nearly zero energy building (NZEB), primary energy demand (PED) and energy performance
certificate (EPC) shall have the meanings given to them in paragraphs 2, 5 and 12 of Article 2 of Directive
2010/31/EU of the European Parliament and of the Council
(10)
.
EU SFDR Disclosures (unaudited) continued
(9)
Council Directive 2011/70/Euratom of 19 July 2011 establishing a Community framework for the responsible and safe management of spent
fuel and radioactive waste (OJ L 199, 2.8.2011, p. 48).
(10)
Directive 2010/31/EU of the European Parliament and of the Council of 19 May 2010 on the energy performance of buildings (recast) (OJ
L 153, 18.6.2010, p. 13)
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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
AUM means Assets Under Management
AXA means funds managed by AXA Investment
Managers UK Limited
Barclays means Barclays Bank PLC
BDO LLP means the Company’s Auditor as at the
reporting date
Bicker Fen means Bicker Fen Windfarm Limited
Bin Mountain means Bin Mountain Wind Farm (NI)
Limited
Bishopthorpe means Bishopthorpe Wind Farm
Limited
Board means the Directors of the Company
Braes of Doune means Braes of Doune Wind Farm
(Scotland) Limited
Breeze Bidco means Breeze Bidco (TNC) Limited
Brockaghboy means Brockaghboy Windfarm Limited
Burbo Bank Extension means Hoylake Wind Limited,
Greencoat Burbo Extension Holding (UK) Limited,
Burbo Extension Holding Limited and Burbo Extension
Limited
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
CO
2
means carbon dioxide
Company means Greencoat UK Wind PLC
Corriegarth means Corriegarth Wind Energy Limited
Cotton Farm means Cotton Farm Wind Farm Limited
CPI means the Consumer Price Index
Crighshane means Crighshane Wind Farm Limited
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
Equity Element means the ordinary shares issued to
the Investment Manager under the Investment
Management Agreement
ESG means Environmental, Social and Governance
Defined Terms
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Greencoat UK Wind PLC Annual Report for the year ended 31 December 2022
EU SFDR means EU Sustainable Financial Disclosure
Regulation
Fenlands means Fenland Windfarms Limited
FRC means the Financial Reporting Council
GAV means Gross Asset Value
GB means Great Britain
Glass Moor means Glass Moor wind farm
Glen Kyllachy means Glen Kyllachy Wind Farm Limited
Group means Greencoat UK Wind PLC and Greencoat
UK Wind Holdco Limited
Holdco means Greencoat UK Wind Holdco Limited
Hornsea 1 means Hornsea 1 Holdco and Hornsea 1
Limited
Hornsea 1 Holdco means Jupiter Investor TopCo
Limited
Hoylake means Hoylake Wind Limited
Humber Gateway means Humber Holdco and
Humber Wind Farm
Humber Holdco means Greencoat Humber Limited
Humber Wind Farm means RWE Renewables UK
Humber Wind Limited
IAS means International Accounting Standards
IFRS means International Financial Reporting
Standards
Investment Management Agreement means the
agreement between the Company and the Investment
Manager
Investment Manager means Schroders Greencoat LLP
IPEV Valuation Guidelines means the International
Private Equity and Venture Capital Valuation Guidelines
IRR means Internal Rate of Return
Kildrummy means Kildrummy Wind Farm Limited
KPI means Key Performance Indicator
Kype Muir Extension means Kype Muir Extension
Wind Farm
Langhope Rig means Langhope Rig Wind Farm
Limited
Lindhurst means Lindhurst Wind Farm
Listing Rules means the listing rules made by the UK
Listing Authority under Section 73A of the Financial
Services and Markets Act 2000
Little Cheyne Court means Little Cheyne Court Wind
Farm Limited
Lloyds means Lloyds Bank PLC
Maerdy means Maerdy Wind Farm Limited
Middlemoor means Middlemoor Wind Farm
ML Wind means ML Wind LLP
NAB means National Australia Bank
Nanclach means Nanclach Limited
NAV means Net Asset Value
NAV per Share means the Net Asset Value per
Ordinary Share
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
REMA means Government’s Review of Electricity
Market Arrangements
Review Section means the front end review section of
this report (including but not limited to the Chairman’s
Statement, 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
Defined Terms continued
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Sixpenny Wood means Sixpenny Wood Wind Farm
Limited
Slieve Divena means Slieve Divena Wind Farm Limited
Slieve Divena 2 means Slieve Divena Wind Farm No. 2
Limited
SONIA means the Sterling Overnight Index Average
SPVs means the Special Purpose Vehicles which hold
the Group’s investment portfolio of underlying wind
farms
Stronelairg means Stronelairg Holdco and Stronelairg
Wind Farm
Stronelairg Holdco means Greencoat Stronelairg
Holdco Limited
Stronelairg Wind Farm means Stronelairg Wind Farm
Limited
Stroupster means Stroupster Caithness Wind Farm
Limited
SYND Holdco means SYND Holdco Limited
Tappaghan means Tappaghan Wind Farm (NI) Limited
TCFD means Task Force on Climate-Related Financial
Disclosures
Tom nan Clach means Breeze Bidco and Nanclach
TSR means Total Shareholder Return
Twentyshilling means Twentyshilling Limited
UK means the United Kingdom of Great Britain and
Northern Ireland
UK Code means the UK Corporate Governance Code
issued by the FRC
UREGNI means the Utility Regulator in Northern
Ireland
Walney means Walney Holdco and Walney Wind Farm
Walney Holdco means Greencoat Walney Holdco
Limited
Walney Wind Farm means Walney (UK) Offshore
Windfarms Limited
Windy Rig means Windy Rig Wind Farm Limited
Yelvertoft means Yelvertoft Wind Farm Limited
Defined Terms continued
120
Greencoat UK Wind PLC Annual Report for the year ended 31 December 2022
Performance Measure Definition
Aggregate Group Debt The Group’s proportionate share of outstanding third party
borrowings
CO
2
emissions avoided per annum The estimate of the portfolio’s annual CO
2
emissions avoided
through the displacement of thermal generation, based on the
portfolio’s estimated generation as at the relevant reporting date
GAV Gross Asset Value
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
NAV Net Asset Value
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, on the
assumption that these dividends have been reinvested
NAV movement per share (adjusting
for dividends)
Alternative Performance Measures
121
G R E E N C O A T
U K W I N D
Cautionary Statement
The Review Section of this report has been prepared solely to provide additional information to shareholders
to assess the Company’s strategies and the potential for those strategies to succeed. These should not be
relied on by any other party or for any other purpose.
The Review Section may include statements that are, or may be deemed to be, “forward-looking statements”.
These forward-looking statements can be identified by the use of forward-looking terminology, including the
terms “believes”, “estimates”, “anticipates”, “expects”, “intends”, “may”, “will” or “should” or, in each case,
their negative or other variations or comparable terminology.
These forward-looking statements include all matters that are not historical facts. They appear in a number of
places throughout this document and include statements regarding the intentions, beliefs or current
expectations of the Directors and the Investment Manager concerning, amongst other things, the investment
objectives and Investment Policy, financing strategies, investment performance, results of operations, financial
condition, liquidity, prospects, and distribution policy of the Company and the markets in which it invests.
By their nature, forward-looking statements involve risks and uncertainties because they relate to events and
depend on circumstances that may or may not occur in the future. Forward-looking statements are not
guarantees of future performance. The Company’s actual investment performance, results of operations,
financial condition, liquidity, distribution policy and the development of its financing strategies may differ
materially from the impression created by the forward-looking statements contained in this document.
Subject to their legal and regulatory obligations, the Directors and the Investment Manager expressly disclaim
any obligations to update or revise any forward-looking statement contained herein to reflect any change in
expectations with regard thereto or any change in events, conditions or circumstances on which any statement
is based.
In addition, the Review Section may include target figures for future financial periods. Any such figures are
targets only and are not forecasts.
This Annual Report has been prepared for the Company as a whole and therefore gives greater emphasis to
those matters which are significant in respect of Greencoat UK Wind PLC and its subsidiary undertakings when
viewed as a whole.
