Marie Joyce, COO and CFO at NTR, spoke to A Word About Wind about the company’s first deal in offshore wind; the attractiveness of energy storage for investors; and how more stability for wind turbine makers helps the industry.
We’ve been investors in wind for over 25 years and, since 2015, we’ve done that through our fund platforms – NTR Wind 1 LP, NTR Renewable Energy Income Fund II, and L&G NTR Clean Power (Europe) Fund – and the demand for renewables is bigger than ever.
We’re still going after pure-play energy generation assets – wind and solar farms – and as well as that the infrastructure to support that: storage, grid technology, electrification of heat, and so on. Our target market is across Europe, and to date we have invested in Ireland, the UK, France, Spain, Italy, Sweden and Finland.
In the UK, the effective ban on onshore wind has been lifted by Starmer’s government, so the UK is now open for business after being closed for years. That’s a big deal for investors, creating new opportunities for green investment, and potentially lowering energy costs while boosting energy security.
We believe that demand for green power is exponentially increasing driven by three factors.
First, the growth of data centres, driven by the rapid growth in artificial intelligence and the roll out of electric vehicles. Until now, the renewable revolution has been about replacing existing fossil growth. Now renewables are no longer being called on to simply replace fossil fuel generation, but rather the ask is also to contribute to increased generation capacity overall.
Second, with what has been going on with Russia, there is far more recognition about energy resilience, independence and weaning ourselves off gas. And third, there is the need for decarbonisation.
These are huge drivers. Europe needs power wherever it comes from, and renewables are the cheapest form of new power. It’s a no brainer.
I think there are three in particular. There’s the East Anglia offshore 1 wind farm, where the L&G NTR Clean Power (Europe) Fund bought a minority stake in April 2024. That was our first foray into the offshore wind sector, so it is an important milestone. We wanted to invest in an already operating asset so that it was de-risked from a construction perspective, and it’s working well.
We also bought the 50MW Uusnivala ready to build battery storage project in Finland in July 2024. That was our first energy storage project outside Ireland, and the first BESS project for the L&G NTR Clean Power Fund, so it helped us to diversify that portfolio.
And last month, we bought the 115MW Ballyteige late stage development solar project in County Offaly, Ireland. As an Irish founded, headquartered and owned company, it is always particularly pleasing to be able to identify and acquire projects that contribute to carbon reduction targets in our domestic market. This project has grid and planning in place, with construction due to start in 2027.
All three projects are at different stages of the development cycle, this diversification is very attractive.
The potential for supply chain disruption with Trump talking about tariffs on imports from China, where most solar panels are manufactured, so we’ve got to see what happens there.
There are lingering permitting challenges across European markets arising from limitations on areas for development, complex planning processes, staff shortages and social opposition. There is also grid congestion as we add more renewables to the grid, to manage intermittent sunshine and wind. It is worth noting that there is action being taken at the pan European level on these two points.
Finally, there’s a recent phenomenon of negative power pricing, particularly in certain markets, which is impacting the economics of renewable projects.
I think energy storage solutions have a huge role to play by balancing supply and demand, enhancing grid stability, and enabling the large-scale integration of renewables. Notably, new long-duration technologies are emerging that could be incredibly valuable. There is also growing recognition in Europe of the need for both public and private investment in infrastructure, as well as the sheer scale of capital required to meet future energy demands, presenting an incredible opportunity for companies like NTR.
The price of wind turbines came down dramatically over a 10-year period to 2020. In or around that time, though, European wind turbine manufacturers started to face significant financial challenges due to factors such as rising raw material costs, supply chain disruptions, and intense global competition.
However, recent developments are indicating a turnaround and more stability in the market. This is important for us as we are bidding on new projects using assumptions as to turbine pricing.
It depends on whether you’ve got your turbines locked in at the time you buy a project, as you need to know what they are going to cost and price the deal accordingly. Volatile turbine prices add risk. Thankfully we now have more certainty.
Join us at Financing Energy Transition and our other upcoming events
Strategic communications, insight and events for the global energy transition.