Must do better

Investment company managers’ verdict on the government’s new energy strategy. 

wind farm offshore renewable energy

Following the government’s announcement of its new energy strategy which seeks to reduce the UK’s reliance on oil and gas and boost energy security, the Association of Investment Companies (AIC) has gathered views from investment company managers in the Renewable Energy Infrastructure sector.

Their comments have been collated with remarks from the managers of Geiger Counter, which focuses on the exploration and production of uranium to supply the nuclear power industry.

The government’s new energy strategy emphasises the importance of renewable energy such as offshore wind, solar power and hydrogen, as well as nuclear power, with plans for up to eight new reactors.

The Renewable Energy Infrastructure sector has grown rapidly since the first four investment companies were launched in 2013. Today, the sector has 22 investment companies nine of which were launched since the start of the pandemic in 2020.

A performance table showing the total returns of these investment companies over the past one, three and five years, together with their dividend yield, is included at the bottom of this release. The best-performing company over five years is Geiger Counter, with a total return of 181%, followed by Greencoat UK Wind with 68% and The Renewables Infrastructure Group with 67%. The average dividend yield of investment companies in the Renewable Energy Infrastructure sector is 5.24%.

Comments on the new energy strategy

Eduardo Monteiro, Co-Chief Investment Officer and Manager of VH Global Sustainable Energy Opportunities, said: “The government’s energy strategy is stuck in the past and remains fixated on very large-scale headline-grabbing projects being sponsored by big players or the government themselves. However the energy industry has evolved, and the UK energy sector is now right at the forefront of this transformation. The current strategy fails to recognise this. It relies far too much on nuclear, a non-sustainable source of power that will do little to secure the near-term energy needs of the UK economy. It is a waste of precious investment capacity by the UK government.”

Jonathan Maxwell, Manager of SDCL Energy Efficiency Income Trust, said: “We were surprised to learn that the government is not doing more to drive energy efficiency. Improving energy efficiency in commercial, industrial and public sector buildings, as well as households, has a huge part to play in cutting carbon, lowering costs, and increasing our energy security. Although the government has set out commendable goals regarding where we get our energy from, it still needs to pay far more attention to energy efficiency.

“Most of the public will be shocked to learn that we waste two-thirds of the world’s energy. Energy efficiency measures such as better insulation, on-site energy generation using solar panels, or combined heat and power systems, which use the heat created in electricity generation to warm buildings, must be encouraged. Furthermore, energy efficiency measures can often be put in place and start delivering results more rapidly than renewable energy projects or many of the other measures that the government strategy aims at.”

Ben Guest, Manager of Gresham House Energy Storage Fund, said: “The UK’s energy strategy is clearly intended to address security and net zero ambitions while promoting industries where the UK could excel (nuclear, offshore wind as well as nascent areas like hydrogen) which is great. However, it lacks a practical angle. To centre on growing 24GW worth of nuclear power, and therefore more power plants, is very optimistic given the density of our population (and the ‘not in my backyard’ mentality especially following Fukushima), the cost of the technology and the nervousness of technology providers to offer their product given the many U-turns on nuclear over the years. It is incorrect to market this as safe technology; the public will disagree. It is also very expensive to build and decommission.”

Keith Watson, Portfolio Manager of Geiger Counter, said: “The revised energy policy will take time to have an impact and energy affordability will remain challenging in the near-term. Notwithstanding some form of demand curtailment resulting from higher prices, sourcing the cheapest gas and petroleum products provides the best chance of easing cost pressure over the next few years and if sourced domestically this would also improve longer-term energy security. New nuclear power projects will take time, the better part of a decade to add incremental power, but they do provide a clear path towards achieving longer-term decarbonising goals and energy security.

“Elsewhere, the UK should also be given some credit for its attempts to improve electricity interconnector capacity with its nearest neighbours. Currently Britain has seven operational electricity interconnectors to Ireland, France, Belgium, the Netherlands and Norway, with 7GW transmission capacity which supplied Britain with around 7% of last year’s electricity needs. Such mechanisms can help smooth out temporary grid imbalances.

“If there has been one energy policy aspect that could be significantly improved, it is messaging: in particular, an over-reliance on promoting renewables and electric vehicles as a panacea and a narrative that only concentrates on installed generating capacity and not energy usability. Greater voter education is required on the need for a more balanced energy mix.

“At a more subtle level, energy policy has thus far done little to improve infrastructure financing costs for more complex nuclear power facilities. While governments are examining the use of small modular reactors to overcome high upfront capital costs, a reduction in borrowing costs could materially benefit large new build projects and this remains a significant opportunity for this sector.”

Richard Crawford, Infrastructure Director of InfraRed, which manages The Renewables Infrastructure Group, said: “We welcome the government’s continued commitment to renewable energy and increase in hydrogen production ambition. To ensure energy security we need to go further. We need a more urgent and rapid transition of industry, transportation and heating away from fossil fuels to electricity. If we accelerate the energy transition on the demand side, and in doing so take a whole-economy approach, the supply side will drop into place in response to positive market signals. Without it, we risk coming up short.”

Jonathan Parr, Fund Manager of Triple Point Energy Efficiency Infrastructure, said: “The Energy Security Strategy was long anticipated but unfortunately failed to deliver on some of the most pressing issues impacting society today. Its focus on energy supply is unlikely to reduce pressure on the current cost of living crisis as energy prices soar, and it fails to recognise the biggest opportunity which is in improving energy efficiency. The cheapest and cleanest energy is the energy that is never used.

“The strategy indicates that onshore wind plans have been scaled back, which is baffling given the UK’s unique position as a North Atlantic maritime nation, with windy, vast, sparsely populated areas in Wales and Western Scotland providing some of the best locations for wind turbine arrays in Europe. The planned expansion of nuclear is positive for reducing the carbon intensity of baseload grid electricity but this must be considered alongside historic cost overruns for nuclear together with its relative high price versus offshore wind.”

Chris Tanner, Co-Lead Manager of JLEN Environmental Assets Group, said: “We were encouraged to see the energy strategy plan included a boost for domestic energy sources. We recognise the need to urgently move away from dependence on fossil fuels so in our view the use of ‘bridging’ technologies (which help to facilitate the shift from fossil fuels to renewable sources) will be important in the short to medium term. Whilst the government’s plan does set out new targets for wind and solar build-out, we would also have liked to see further support for these ‘bridging’ technologies other than nuclear – and a clearer shift away from oil and gas production.

“For example, technologies that produce biogas – such as anaerobic digestion plants – are a greener solution to our immediate domestic energy needs. There is an excellent range of environmentally sound solutions available now, so in our opinion biomass, energy-from-waste and hydrogen should all play a greater part in our energy mix.”

Tom Williams, Lead Manager of Downing Renewables and Infrastructure, said: “What we do over the next decade will be critical to mitigating or averting a climate crisis, but unfortunately it seems that a short-term focus on the cost of living and energy security is driving much of the government’s energy strategy. Increased emphasis on nuclear energy as part of the solution is a medium- to long-term effect; it takes years to plan, commission, build and deliver new nuclear capacity. In the short term, fossil fuel intensive generation will be sweated harder for longer, emitting more greenhouse gases in the process.

“The fastest and cleanest way to reduce our energy bills is a greater use of renewable energy. The government must do more to encourage the rapid scale up of renewable energy infrastructure through easing of planning regulations for wind and solar, especially onshore wind. Like any area of policy, the energy strategy can’t be considered in isolation but our greatest fear is that the climate crisis will be the price we pay for energy security.”

Impact of the war in Ukraine

Jonathan Parr, Fund Manager of Triple Point Energy Efficiency Infrastructure, said: “Our thoughts are with those suffering due to the tragic situation in Ukraine. Clearly geopolitical risk to the energy system has never been higher. The conflict is compounding an already acutely tense situation with elevated prices likely to remain high for the next 12 months.”

Eduardo Monteiro, Co-Chief Investment Officer and Manager of VH Global Sustainable Energy Opportunities, said: “While clearly devastating for the people of Ukraine, the current conflict has arguably had a positive impact in highlighting the need for more sustainable and accessible sources of energy. In driving up oil and gas commodity prices, the economics for renewable power investors have improved considerably. It has also proved to be a catalyst in a drive for the UK to achieve full energy independence which has inevitably meant a greater emphasis on renewable energy investment.”

Chris Tanner, Co-Lead Manager of JLEN Environmental Assets Group, said: “It has long been recognised that low carbon / energy efficient infrastructure will be crucial to meeting net zero targets. However the current conflict between Russia and Ukraine has sharpened the focus of several governments to invest in home-grown energy sources as a way of reducing their reliance on Russian oil and gas. What is important now is to ensure that we move forwards, not backwards, when it comes to replacing energy imports – we must continue to move away from carbon-intensive fossil fuels and instead prioritise clean, renewable energy production and distribution.”

Investment opportunities and outlook

Jonathan Maxwell, Manager of SDCL Energy Efficiency Income Trust, said: “This is a hugely significant time for the energy efficiency sector, potentially a watershed moment. There is now widespread recognition of the role it can play in the global effort to tackle the climate crisis. Many of our clients are committed to net zero carbon by 2030 to 2040 and most of the world has committed to limit the global temperature rise to 1.5°C and recognises the urgency. Within the energy sector, efficiency may not be the whole answer, but it may be at least half of it.”

Ross Driver, Director of Foresight Solar Fund, said: “Declining construction costs in recent years have improved the economic case for the deployment of subsidy-free solar at scale in the UK, encouraging developers to bring forward a significant pipeline of projects. There is currently over 18GW of solar sites in planning, with a large volume at ‘ready to build’ stage and expected to come to the market in 2022. A significant proportion of this volume represents an overhang resulting from the pandemic.

“Looking to the battery storage market, the UK is well placed to forge ahead in 2022 with a significant number of standalone and co-location projects being developed. Australia remains an attractive market for battery projects and the Spanish government has recently approved an energy storage strategy targeting 20GW of storage capacity by 2030.”

Robert Crayfourd, Portfolio Manager of Geiger Counter, said: “The nuclear power sector fits a core aspect of government policy in being able to produce clean baseload power, with lower sensitivity to raw feedstock price movements. This favourable shift in attitude towards the nuclear power industry in established Western markets is extremely encouraging, together with extremely strong growth in Asia, driven in particular by China which continues to view nuclear power as a core substitute for domestic coal-fired power generation.”

Performance of investment companies focused on renewable energy generation, energy efficiency and nuclear power

Investment company

Total return %
(1 year)

Total return %
(3 years)

Total return %
(5 years)

Yield (%)

Aquila European Renewables Income





Bluefield Solar Income Fund





Downing Renewables & Infrastructure





Ecofin US Renewables Infrastructure





Foresight Solar





Geiger Counter*





Gore Street Energy Storage Fund





Greencoat Renewables





Greencoat UK Wind





Gresham House Energy Storage





JLEN Environmental Assets Group





NextEnergy Solar





Octopus Renewables Infrastructure





Renewables Infrastructure Group





SDCL Energy Efficiency Income





Triple Point Energy Efficiency Infrastructure





US Solar Fund





VH Global Sustainable Energy Opportunities





Renewable Energy Infrastructure sector average





Source: AIC/Morningstar (as at 7 April 2022). Share price total return in %. Companies with no one-year track record are not included. *All companies are in the AIC Renewable Energy Infrastructure sector except for Geiger Counter, which is in the AIC Commodities and Natural Resources sector.



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Notes to editors:

  1. The Association of Investment Companies (AIC) was founded in 1932 to represent the interests of the investment trust industry – the oldest form of collective investment. Today, the AIC represents a broad range of closed-ended investment companies, incorporating investment trusts and other closed-ended investment companies and VCTs. The AIC’s members believe that the industry is best served if it is united and speaks with one voice. The AIC’s mission statement is to help members add value for shareholders over the longer term. The AIC has 360 members and the industry has total assets of approximately £268 billion.
  2. Performance data is share price total return for the average VCT to end March 2022. Source: AIC/Morningstar.
  3. Disclaimer: The information contained in this press release does not constitute investment advice or personal recommendation and it is not an invitation or inducement to engage in investment activity. You should seek independent financial and, if appropriate, legal advice as to the suitability of any investment decision. Past performance is not a guide to future performance. The value of investment company shares, and the income from them, can fall as well as rise. You may not get back the full amount invested and, in some cases, nothing at all.
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