Macquarie Infrastructure and Real Assets (MIRA)

Bright Network
Renewables Case Study Exercise
July 2021

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RENEWABLES ONE Case Study
Overview
▪ A MIRA-Owned renewables company, RENEWABLES ONE (“R1”) has been considering several avenues of expansion for its existing portfolio of
wind and solar assets. As an investment analyst you have been tasked with exploring the various opportunities presented in this management brief
and presenting your findings/opinion to the Investment Committee (“IC”) for sign off

▪ Investment rationale:
‒ MIRA would like to achieve an element of geographic & technological diversification while maintaining its risk level
North of Spain
‒ Several of R1’s assets are due to be decommissioned (i.e. reach end of their life) over the coming 10 years and MIRA would like to begin
55MW of PV
planning for the future

▪ To aid your IC discussions, you have been asked to prepare a concise 2-3 page case study covering the following key points (as well as anything else
that you feel is appropriate). You can use any public sources of information available to you, as well as the information contained within this
presentation.
‒ Opportunity Overview and Introduction
‒ Introduction
‒ Brief summary of the three investment options
‒ Short market overview of preferred option (e.g. country profile and why investing in renewables there makes sense)
‒ Overview of key listed competitors, including technological and geographical focus (should be the same group as trading
comparables below)
‒ Trading comparables, including implied valuation of R1 based on these comparable companies
‒ Examples include, but are not limited to, Orsted and Iberdrola
‒ Feel free to use the template comparables slides towards the end of this presentation, or your own view on an appropriate format
‒ Detailed risks (including how material each risk is and its likelihood) and mitigants for each of the options
‒ Examples could include country risk and technology risk

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 RENEWABLES ONE: Leading UK Renewables YieldCo
300MW installed wind and solar capacity, with a strong desire for expansion
Key Business Insights Overview of RENEWABLES ONE
▪ RENEWABLES ONE (“R1”) is a pioneer since 2006, with deep
expertise in the acquisition and management of wind farms and
solar plants in the UK Expert Asset
20 Operating
Management
▪ Diversified portfolio with projects across England, Scotland, Wales and Assets
Team
Northern Ireland, limiting single project risk
▪ To date, the UK Government has guaranteed the electricity price R1
will receive for each unit of electricity it produces from each wind farm
and solar plant for 15 years after the asset has been built
North of Spain
▪ After 15 years, R1 must sell electricity into the broader electricity market
at market prices Potential to 67MW of PV Strong
▪ After its success in recent years, the team have explored expanding expand into Contracted
new markets Asset Revenue
into different technologies and markets

Key Operating and Financial Metrics Recent News South of Spain

Number of existing wind 20 (each will last for around 25 years) ▪ “Yesterday, given helpful weather
219MW of conditions,
PV renewables accounted for almost 100%
farms and asset life Average remaining asset life of 12 years of total electricity generated in the UK”
▪ “Could solar be the new wind in the UK?”
Existing electricity 300MW in operation ▪ “The growing problem of intermittent electricity generation as more renewables
generation capacity assets are built is threatening to increase strain on electricity grid operators”
Plant availability 99% ▪ “Given the level of competition to build new renewables assets in the UK, the
government is reportedly considering whether to end its revenue support scheme for
Revenue 2020 (2019A)1 £110m (£80m) new projects”

EBITDA 2020 (2019A) 1 £80m (£50m)

Net Debt (2020) £75m

1. E = expected, A = Actual

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RENEWABLES ONE: Potential Opportunities
We have outlined below the results of a market screening exercise carried out by R1,
highlighting the most attractive identified opportunities for the yieldco
#1: UK Solar Portfolio
• 100% of a portfolio of 5 solar plants in the
south of England totalling 40 MW of generating
capacity
• 1 of these plants is currently under
development, the rest are operational
• 2 of the operating plants are eligible for
‘Contract for Difference’ payments (i.e.
guaranteed prices)
• Availability of operating plants to date has been
in the region of 95%, with one plant (15 MW)
consistently 15 percentage points below this
figure
• The 4 operating plants are now c.10 years old
with an expectation that each asset will run for
40 years in total
• Seller is a small family office
Metric # Metric
#2: Taiwan Offshore Wind
• 25% of a single 400 MW asset in Taiwan, due
to be operational in 2021
• Delayed start to construction leading to an
expected completion date in 2021, compared
to original estimate of late-2019
• Assumed asset life of 35 years
• Expected to be eligible for the Taiwanese
‘Feed in Tariff’ in 2021 (i.e. guaranteed prices)
• 3 Co-Investors (60% Local energy company,
10% Infrastructure fund, 5% large European
utility company)
• The local energy company will be providing
ongoing operations and maintenance services
to the wind farm
• Seller is another infrastructure fund
# Metric
#3: Greece Onshore Wind
• 100% of a 300MW portfolio of operational
onshore wind farms in Greece
• 50% of assets were built between 2018 and
2020 and eligible for new ‘Feed in Tariffs’ (i.e.
guaranteed prices)
• The other 50% of the portfolio impacted by
retroactive ‘Feed in Tariff’ cuts in 2014 as the
Greek government cut guaranteed prices to
reduce its renewables account deficit
• Assumed asset life of 30 years for each wind
farm
• Availability in the region of 97% across the
portfolio
• Seller is a major Greek renewables developer
#

# Assets 5 # Assets 1 # Assets 30

Capacity 40 MW Capacity 100MW Capacity 300MW

Average age of assets 8 years Average age of assets - Average age of assets 10 years

Contracted revenue Yes, for two assets Contracted revenue No Contracted revenue Yes, for all assets

Development risk Yes, for one asset Development risk No Development risk No

Construction risk Yes, for one asset Construction risk Yes Construction risk No

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RENEWABLES ONE: Listed Market Comparables Template
[]
Financial Metrics Valuation Metrics Multiples Yield

2020 2019 Shares Equity Enterprise EV / EBITDA EV / EBITDA

Listed Share Price Net Debt Dividend
EBITDA EBITDA Outstanding Value Value 2020 2019
Comparable (£) (£m) Yield
(£m) (£m) (m) (£m) (£m) (x) (x)

Comp A

Comp B

Comp C

Comp D

Comp E

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 RENEWABLES ONE: Listed Market Comparables Template
Ørsted example
Financial Metrics Valuation Metrics Multiples Yield

2020 2019 Shares Equity Enterprise EV / EBITDA EV / EBITDA

Listed Share Price Net Debt Dividend
EBITDA EBITDA Outstanding Value Value 2020 2019
Comparable (£) (£m) Yield
(£m) (£m) (m) (£m) (£m) (x) (x)

1 3 2 3 4 5 3 6 3 7

Ørsted 2,091.3 2,017.4 420.4 103.3 43,427.3 + 1,424.2 44,851.5 22.2x 21.4x 1.31%
D E A B A B C C D C E

1 2

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