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Thrive Renewables plc (formerly Triodos Renewables plc)

What they do

Thrive Renewables develops and operates small to medium-scale renewable energy projects across the UK. It has invested in 19 onshore wind farms, a hydro-electric scheme, and holds investments into battery storage and ground source heating developers, with a combined capacity of 109.6 MW of clean, green power.  In 2019, generation from Thrive's impact portfolio was equivalent to satisfying the electricity demand of 44,713 UK homes. 

Thrive's work

Thrive Renewables connects people to sustainable energy. It offers accessible opportunities for individuals and businesses to invest in clean energy projects that deliver financial, social and environmental rewards. Thrive Renewables' 5,417 shareholders – large and small – have been building and operating renewable energy projects in the UK since 1994. By investing in Thrive, you join a growing movement of people working together to create a sustainable energy system for generations to come.

Thrive Renewables’ 2019 total renewable energy capacity was 105.6MW.

2019 Highlights

2019 has been an exciting year for Thrive

During 2019, Thrive had a total of 22 investments:

• Sixteen renewable energy projects owned outright or in co-ownership

• Funds provided to build a further two renewable energy projects

• Community bridge funding to three projects

• Investments into two sustainable energy project development companies - one electricity storage and one heat

Divestment for growth

The sale of two wind farms in 2019 resulted in a gain of £15.4m and released the projected value of the next 10 years of dividends from these projects.  This allowed Thrive to pay a significant (40p per share) dividend to shareholders and retain £11m for future investment. It proves the value that shareholders have created from investing in consented projects and turning them into established operating assets and substantiates the directors’ valuation for the company.

Chapelton wind farm - subsidy free, private wire

In November 2019, Thrive acquired the rights to develop a 2.7MW wind farm in Girvan, South Ayrshire, Scotland.  The site secured planning consent in November 2014 but has not been built due to local grid constraints.  Thrive has been working with high energy demand businesses locally to explore direct supply opportunities.  This ‘private wire’ model connects the wind farm to the business’ own energy system, then supplies power surplus to their demand via their grid connection. The host businesses are offered competitively priced wind power, and any surplus is exported to the local distribution network. Benefits include support for the local economy and the opportunity to build new renewable generation capacity. Once operational, it is planned that the project will generate enough electricity to power the equivalent of 1,650 UK homes.

Inverbroom hydro – plugging funding gaps

A 2MW hydro project is currently being constructed on the Inverbroom Estate, close to Ullapool in the Scottish Highlands. The water is sourced from Loch a’Bhraoin, meaning ‘place of showers’ in the Gaelic language, which bodes well for the location of a hydro site. The 2MW project is forecast to generate 2,279 UK homes equivalent of electricity and will implement a community benefit scheme. Thrive committed an investment of £3.4m to the project in September 2019 to maintain the construction schedule in advance of bank debt being secured. The bank funding was finalised in January 2020 and Thrive will now maintain an investment of £1.8m in the project. The project owner plans to repay Thrive in the medium term.  Inverbroom hydro prequalified for the Feed in Tariff and is anticipated to commence generation early in 2021.

United Downs Geothermal – technology innovation and baseload renewables (electricity and heat)

In February 2020, Thrive invested in United Downs Geothermal Limited, which will be the UK’s first geothermal electricity generation plant. The site, close to Redruth, Cornwall, has been developed by Geothermal Engineering Ltd. Two wells have been drilled into the granite bedrock, intersecting the Porthtowan fault at 2.3km and 5.1km below the surface. A 3.15MW power plant will be constructed over the coming 18 months, with generation planned to commence in the second half of 2021. In addition to generating 6,500 UK homes equivalent of electricity, there is scope for the project to deliver 12MW of renewable heat locally.

Sale of Kessingland and Wern Ddu wind farms

Although the sale of the two wind farms completed on 13 February 2019, the majority of the work was undertaken in 2018. Having done a full strategic review in 2017, it became obvious to thrive that valuations for operational wind farms were exceptionally high. This provided an opportunity to realise the upside of some of its assets to fund new renewable capacity and contribute positively to the UK’s energy transition. The decision to sell the two projects is a departure from Thrive's buy, build and hold strategy. While Thrive does not intend to sell projects routinely, the following combination of factors drove the decision on this occasion:

Enhancing shareholder returns

While Thrive continues to grow, the level of dividend has been stable, but modest. The underlying value of the Company has steadily increased as it has added projects (and their associated long-term dividend flow) to the portfolio. Thrive has funded the acquisition and build of projects with a combination of shareholder equity and debt (from banks and bond investors). This has allowed it to grow the portfolio to a greater extent than if funded with equity alone. The relatively low cost of debt also enhances the long-term equity returns achievable from the projects. However, the use of debt limits the levels of dividend which can be paid in the first 10-15 years of each project, as the debt interest and repayments must be made. While shareholders have benefitted from regular dividends, the majority of the value created by building the portfolio is locked up in the long-term (post debt repayment) returns. By selling two of the assets, Thrive was able to pay a 40 pence per share interim dividend in April 2019, monetising the projected future revenue/dividend streams now, rather than waiting.

Proof of value

Thrive has acquired most of its projects at the consented stage of development - the project having secured planning permission, an option on the required land rights and an electricity grid connection offer. While these three elements create an asset (rather than just a good idea to build a renewable project), risks remain in the procurement, construction and proof of operation phase. Therefore, there is an increase in the value of assets between the consenting and operational phase. Part of the additional value achieved by selling the two projects reflects the successful procurement, construction and proof of operation. The sale of the projects provides the Directors with further proof of the valuation of the rest of the portfolio.

Changing market conditions for investing in new renewables

The business model of building renewable energy assets is an evolving picture. Thrive will continue to play a significant role in the transition to a cleaner energy system. The business is at the forefront of developing and implementing business models which deliver continued progress in the UK energy sector. £11m of the funds released by the sale of the two assets is being used for investment into additional sustainable energy projects. Thrive is confident that the new owner of Kessingland and Wern Ddu wind farms is committed to delivering renewable electricity and the associated community benefits. By releasing this capital from the sale and reinvesting it, Thrive is able to increase the environmental impact of its shareholders’ funds, safe in the knowledge that the existing projects will keep delivering impact under new ownership.

In March 2019, a General Meeting was held, where shareholders approved the payment of a 40p per share dividend, equivalent to 15% of share price. The Thrive team are committed to redeploying the £11m retained by the Company from the sale of the two wind farms into additional sustainable energy assets.

Future plans

Thrive is making good progress towards a 2020 growth target of contributing to 125MW of renewable projects, and uniting a community of 10,000 investors. 

Thrive Renewables are focusing on the following objectives for the coming 12 months:

  • To continue to deliver healthy returns to shareholders, both via dividends and capital appreciation. This will be achieved through improvements in operational performance, lowering the Group’s cost of debt and by continued growth of the portfolio, delivering greater impact and diversifying income.
  • To continue to improve the portfolio’s operational performance in terms of health, safety and productivity. The focus will be on increasing the availability and productivity of our 50 turbines, and enhancing the electricity sale arrangements.
  • To increase awareness of Thrive Renewables and further enhance the profile of shares on the secondary market to support future growth.

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