Good afternoon and welcome to TRIG's 2025 Capital Markets Seminar. I'm Minesh Shah, Managing Director for TRIG, and today we're joined by representatives of the managers, InfraRed and RES, who I'll introduce shortly. We're also joined in the room by members of the TRIG board: Richard Morse, Chair; Tova Feld, Senior Independent Director; as well as Erna Maria Trixall and Celina Sagayan. Thank you for joining us. Our objective today is to showcase the activities that we are undertaking for the long-term success of TRIG, and in the near term to address the share price discount to NAV. I think we would all acknowledge that the high interest rate environment is a major factor affecting valuations, not just of TRIG, but across the sector.
Nevertheless, we will present to you today actions we have taken and plan to undertake so that TRIG remains on the front foot, merits a better share price rating, a smaller discount to NAV, and has a sound platform for future growth. That is growth both of income and capital, value that private market investors are attributing to assets that TRIG owns. I will provide some brief introductory remarks, and then you will hear from the team. Phil, David, and I will come back at the end to wrap up and for Q&A. We'll start by a reminder of why renewables are a relevant investment theme. In doing so, we will, of course, acknowledge the challenges the sector is facing.
Renewables are as relevant as ever, and despite the time it is taking the U.K. government to decide what it's going to do with the makeup of the U.K.'s electricity market, which no doubt has weighed on sentiment towards the sector, electricity demand is expected to increase. In the U.K., this is from 285 terawatt hours in 2024 to 420 in 2035 and 670 in 2050, a 50% and 135% increase. This will be driven by the electrification of transport, space heating, and industry, and there's a similar picture across Europe. To plug the gap, are the U.K. and Europe going to build eight new nuclear plants the size of Hinckley C? Western Europe has commissioned two in the past 20 years. Moreover, they both took 20 years to build, at four times their original budget. Or 32 new gas plants.
To do so would mean tripling our gas imports at a time when energy security is under the microscope. Energy demand is increasing worldwide, and we would be competing for an increasingly scarce resource. To quote Fatih Birol, Executive Director of the International Energy Agency, "Energy is the foundation of modern life." He went on to say that without energy security, there can be no economic stability. Meanwhile, the sun and wind are plentiful. Renewables have become and will continue to be an important part of the energy mix, and the baton to drive decarbonisation in Europe is being picked up by corporates. Of companies tracked by the Oxford University Net Zero Tracker, 79% of those located in Europe have net zero targets in place, compared to 47% globally. We will come back to the role of corporate off-takers later.
On the financial side, 2022 and 2023 saw interest rates rise by 5% for the first time since the 1980s, and to rise to a level above 5% for the first time in nearly 20 years since the GFC. This means that you naturally have a wide array of investment options available to you, and we recognize that we are competing for that capital. This has no doubt weighed on the share price, but we believe it need not. Private market investors believe it need not, and they continue to pay around NAV for these investments. TRIG benchmarks well in a higher interest rate environment. TRIG sits at the nexus of these two themes, the energy transition and the investment theme. It provides investors with liquid access to private investments that are at the core of the energy transition, together with resilient income and the opportunity for growth.
Since IPO in 2013, we have paid out over GBP 1 billion in dividends. We've grown the dividend by 25% and delivered an average cash dividend cover of 1.2 times, and that is after the systematic repayment of debt. At the prevailing share price, an investment in TRIG offers a 10% dividend yield, a base case 11% annualized total return, and the opportunity for self-funded growth, particularly through our proprietary 1 gigawatt development pipeline. In this context, what is TRIG? TRIG is a diversified renewables investment company of scale. Our GBP 3 billion portfolio is both geographically and technologically diverse. The portfolio comprises over 80 projects across six power markets and has a generation capacity of 2.7 gigawatts. Last year, the portfolio generated 6 terawatt hours of electricity, which is the equivalent of powering nearly 2 million homes and displacing 2 million tonnes of carbon a year.
Now, being an investment company, TRIG is owned by you, the shareholders. Since publishing our 2024 results, we've had the opportunity to meet with many of you. We've had over 100 meetings. Thank you for your time and engagement. We've built this seminar around the themes coming out of those meetings. We don't always have time to fully expand on some of the more strategic topics when we see you, and here you can see some of the questions we're looking to address. Now, it's worth remembering that our investment activity is governed by our capital allocation priorities. You can see here, as the share price discount widened in Q4 2024 and into 2025, as we have pivoted in response to the relative investment opportunity, from a greater emphasis on new investment to increasing return of cash to shareholders by tripling the size of the buyback programme.
What has been constant throughout has been our disciplined approach to balance sheet management and the systematic repayment of debt. Last year, we repaid GBP 300 million of debt and expect to repay a further GBP 500 million this year and next. This all lays the foundations for growth whilst being mindful of the share price. New investment commitments that we have made since 2022 into both buying back shares as well as new development stage investments have been made at double-digit IRRs, and you will hear today why our balance sheet means we can do both. We have a singular focus on driving shareholder value through active and responsible management. This is tone from the top. It comes from the board. It comes from the management leadership team. It stems from our own significant shareholding in The Renewables Infrastructure Group and has now been reinforced through the new fee arrangements.
Whilst we've had to look at the efficiencies of our operations, we firmly believe, as I said alongside the year-end results, that our actions will deliver shareholder value, will drive the share price forward, and therefore will enable us to continue to deliver with the right resource, the right expertise, the strategy that we set before you. Our team has delivered over GBP 200 million of disposals, a GBP 150 million buyback program, and over a 10% increase in dividends over the past three years. In the near term, we are on track to execute a further GBP 300 million of financings and disposals, repay a further GBP 500 million debt by the end of 2026, grow distributable cash flow from 2025 into 2026, and invest accretively.
This afternoon, we will start by examining our financings and access to funding by taking you through our cash flow forecasts, our approach to debt, and portfolio rotation. We will then delve into how we are investing some of that dry powder into construction and development investments. After a 10-minute break, we will then have two sessions on our operational enhancements, first by expanding on the tools we use to enhance the revenue line, and finally, we will go into detail on some of the technical enhancements we are rolling out. We have brought some of the kit with us. You may have seen it as you were coming in, and you'll have the opportunity to touch and feel some of these hardware enhancements, get a sense of the scale during the refreshments after these presentations.
Now, we've also heard that you would like to understand better the depth of resource that TRIG has access to, the team that has delivered over GBP 200 million of sales and enabled the board to undertake a GBP 150 million buyback programme and to increase the dividend by over 10% over the last three years. As a result, the main content of today's seminar will not be delivered by the usual suspects that you meet day to day: Phil, Chris, David, and myself.
Today, you'll be hearing from members of our team: Luke Murphy, Director in the Fund Management Team, who's responsible for strategy and risk management; James Olding, Director in Phil's Portfolio Management Team, who leads on portfolio valuation and value enhancements; Alastair Campbell, Director in InfraRed Asset Management Team, who provides leadership across our construction and development assets; Sean Mackie, Manager in Chris's Operations Management Team, who has responsibility for TRIG's Southern European investments, including the French repowerings; Nick Speechley, Director in Fund Management, who leads on revenue management, including originating and placing corporate power purchase agreements; Fiona Power, Director in Chris's Team, who has responsibility for all of TRIG's U.K. onshore wind investments; and Mehdi Zohuri, Vice President for Digital Solutions at RES.
Now, Mehdi is an example of someone who's not part of the day-to-day TRG team, but someone who we can draw on for resource as and when needed from the wider RES organization. Finally, from me, before I hand over to the team, an overview of how we are driving TRG's strategy forward. As TRG grows, we expect the geographic split of the portfolio to be broadly maintained. Meanwhile, we are seeking to evolve the technology mix, reweighting the portfolio towards greater solar and batteries, and that is reflected in all the action that we have been taking over the last two years. All of our sales have been in wind. We've sold 8% of the portfolio at a 10% premium to carrying value. Over the last three years, we've added a really attractive battery development pipeline.
Alastair will expand on the exciting progress that we have made there later this afternoon. Building out our battery pipeline would take us to about 10-15% of the portfolio. We are looking for opportunities to add solar into the portfolio, be that development positions or operational portfolios where we can bring RES's unique capabilities to bear. We have the conditions for growth. We model that we need long-term average dividend cover of 1.1-1.2 times to achieve eternal life. That is to replace our depreciating assets with new investment in order to maintain and grow the NAV. This hurdle is lower than many of our peers because of the pace at which we amortize debt.
This hurdle is also comfortably within what we have achieved since IPO, which has averaged 1.2 times, and that average includes the lower than normal dividend cover that we experienced in 2024 and in 2025. Now, in the past, we have often quoted a hurdle rate of 1.2 times. What is the difference? The difference is that is what we would need if we were reinvesting at the portfolio average discount rate, i.e., into operational projects. By investing in projects at the development and construction stage, where projected IRRs are typically double digits, our dividend cover requirement is lower. Or flip that on its head, put it another way, our opportunity for income and capital growth is greater. Beyond this, we have additional growth levers in our toolkit.
We have sought to identify opportunities where another party may place greater value on an asset than us, and in that situation, we will rotate the portfolio, realize the cash, and give ourselves greater capital allocation choices. We actively manage the revenue line to extend cash flow visibility over and above the existing government offtake contracts, and we are at the forefront of implementing innovative operational enhancements. Once again, thank you for coming today, and with that, I will hand over to Luke and James. Just give people a second to... We'll kick off.
Thanks, Minesh, and good afternoon, everyone. In this session, we're going to discuss how TRIG can fund growth from its own resources, and essentially, that's from three routes: retained cash in excess of the dividend, debt capacity, and portfolio rotation.
Now, firstly, when it comes to cash flows, we recognize that TRIG's assets have a finite life and that revenues reduce over time, particularly as some of the subsidies from the earlier assets expire. Ultimately, that is only part of the story, and what we want to cover today is not just what happens to revenues, but what the impact is on distributable cash flow that underpins the dividend, and in particular, how those cash flows can grow over time through reinvestment. Secondly, on debt capacity, many investors here will be familiar with TRIG's disciplined approach to managing the balance sheet, repaying approximately GBP 190 million of project-level debt every year and forecast to repay over GBP 1 billion of total debt over the next five years. Really, the benefit of that is twofold. Firstly, there is existing debt capacity within TRIG's structure today that we can use to fund growth.
Secondly, repaying debt over time gives us flexibility in the approach we take in future to managing our debt structure. In this session, we're going to talk about sources of debt financing, evolution of the company's debt structure and gearing profile over time, and we're going to explain how using debt in the right way can accelerate reinvestment and total return for shareholders. Finally, we'll talk about portfolio rotation, and as Minesh mentioned, over the last two years, TRIG has sold and led the peer group in selling GBP 210 million of assets at a premia in excess of 10%. We also have sales processes ongoing to continue to realise capital, and asset sales are going to form an ongoing part of TRIG's future funding strategy. In this session, we'll touch on how sales can benefit portfolio composition and fund higher returning investments.
Ultimately, what we'll look to demonstrate is how TRIG can and will be evergreen and how reinvestment in higher returning opportunities through the funding sources I've just mentioned can grow cash flows and support a progressive dividend, not just now or in five years, but well into the future. With that, I'll hand over to James to talk through TRIG's forecast cash flows.
Thanks, Luke. To explore how distributable cash flows are expected to evolve, let's start with something fairly familiar. You have project-level revenues, and over the next 10 years, we have a higher level at the start with an increasing proportion of merchant revenues thereafter. Fixed price revenues here, importantly, reflect only those that are fixed today. We have the opportunity to do more, and you're going to hear more from Nick about contracting going forwards. What are those revenues being used for?
To dig a little deeper, we can flip over the revenues, and we can look at what they're being used against, and in particular, we can look at debt. Again, we have fixed debt repayment profiles, and we have that debt repayment profile with fixed interest and profile. Consequently, we can remove the revenues from this to get a better look at the distributable cash flows that sit behind those coming to the investors. If we do, we see much less variation over time, and actually, we see a gentle rise in the early years from a lower cover at the moment, and then we see a little gentle decline over time over those further years. Now, this is an intentional result of that disciplined approach to debt. We can look at what else the revenue is in supporting.
Having removed debt in grey and taking this from top to bottom, we also have the operating costs of the individual assets in light blue. We have corporate costs, and this includes the funding for the RCF and costs associated, and we have taxation in dark blue coming through, leaving us with that projected distributable cash flow profile, which we see plotted against the dividend in the darkest blue. If we look a little bit closer at that profile, we again see this continuing to grow through to 2040 before starting to decline thereafter, and this level of additional growth is what presents us with choices about how we use that cash going forwards. Now, we've only considered the existing portfolio right now, and one of the principal levers, as Luke has noted, to doing so is reinvestment.
Let's actually look at what accretive reinvestment could do to these flows and to that revenue profile, excluding that debt service going through. Here, we illustrate how reinvestment of cash in excess of the dividend standardized return of 10% can add to those two metrics. We have dividend cover projections. Reinvestment can improve revenues after debt service, so we're talking green line here, circa 45% by 2040 for the arrow shown in green, and the distributable cash flow shown in pink in the same year is over 30% higher as well.
If we move on to the next slide, finally, we can actually see the impact on net asset value as well, and here we're showing net asset value with reinvestment over time in the third line, plotted against what it would be without reinvestment going forwards, and this cumulative impact of reinvestment generates growth over time, allowing that NAV to become higher and providing that capital growth. This is only one of those tools, and Luke can take us through others.
Thanks, James. Just a brief reminder, having covered cash of TRIG's debt structure, which is the second point I mentioned. At present, TRIG has two sources of debt. We've got project-level debt, which represents about 90% of all debt in the company. That's fully amortizing, fixed interest rate, and the term of that debt is aligned to project subsidy periods.
That means no interest rate risk, no refinancing risk. Secondly, we have the RCF, a temporary and efficient source of finance used as a bridge to fund investments. Now, the fact that TRIG repays project-level debt every year gives us flexibility in our approach to debt financing in future, and we've talked about a desire in the annual results to raise a further GBP 300 million from financing and asset sales to reduce the RCF and to fund accretive investments, which include buybacks. To that end, we're in the process of arranging a longer-term corporate debt issuance of approximately GBP 150 million, which we're aiming to close in H2 of this year, and I'll touch on that in a bit more detail as we go through the deck.
On the following slides, we'll also run through how the various debt financing tools available to the company compare, how the gearing position of the company evolves over time, and how returns can be accelerated through efficient use of debt whilst managing refinancing risk. Now I'll run through TRIG's debt toolkit in a bit more detail. On the left, you see the RCF. It sits at the top of the structure and accordingly has lighter covenants compared to project finance. It's floating rate debt, and it's to be repaid through asset sales or terming out. It's used as a flexible source of funding, allowing for quick drawdowns to fund investments and working capital. In the middle, you have profile corporate debt, so that's not in the structure just yet, but something, as I mentioned, we're looking at implementing.
That would also sit at the top of TRG's structure and have covenants aligned to the RCF package. Now, the benefit of this is there's quite a lot of optionality in how that debt can be structured, whether it's term repayment tranches of different maturities or currency, but in all cases, we'd expect that debt to have a fixed interest rate, and we'd expect to spread the maturities of those tranches over time such that they can be met and repaid from TRG's operating cash flow, essentially mirroring an amortisation profile, thereby managing refinancing risk.
Now, the purpose of that type of debt would be to provide an efficient source of long-term corporate financing, with the proceeds being used to term out a portion of the RCF at a similar interest cost, but with greater long-term interest rate certainty, which in turn gives us dry powder on the RCF to pursue accretive investments. Finally, on the far right, you have project-level amortising debt. Now, that's been the bedrock of TRIG's debt structure since IPO. As I mentioned earlier, the debt's fixed rate and repaid in line with subsidy periods. We'd expect to continue using that on projects where there is a long-term fixed price source of revenues, and Nick in his session later on will take us through where those are expected to come from in future. We have covered TRIG's financing structures.
Let's look at how that debt picture evolves over time. This is a chart that will hopefully be familiar to many. It was in the annual results presentation, and what you can see is in the light blue bars, project finance debt being repaid over time, very rapidly from GBP 1.8 billion at December 2024 to next to nothing by 2035. Similarly, you have the RCF in the dark blue bars also being repaid over time, and the blue line is showing gearing, which is reducing from 43% at December down to nearly zero over the next 10 years. The additional disclosure that we put in this time round was around the gearing capacity in the portfolio, so the white bars shown there. What you can see is that there's fairly substantial headroom, and that increases as project finance debt is repaid.
It's also possible to increase that headroom even further by entering into new revenue fixes, and again, we'll talk about that in a bit more detail later. That's the as-is picture. If I flip over and include the GBP 150 million corporate debt issuance I just mentioned, you can see that actually it's relatively modest when compared to the total available debt capacity. What you see at the end there is us managing a repayment profile through spreading tranches of different maturities to mitigate refinancing risk. The final benefit of introducing debt at that stage of that type is it allows us to bring forward reinvestment that would otherwise occur a lot later, and in doing so, we can accelerate growth. We've covered debt, and you've heard from James on cash. The final element of TRIG's self-funding capability is portfolio rotation.
On the next couple of slides, I'll cover how we select disposal candidates and the impact that TRIG's disposal program has had on the portfolio. Before we go through what's on the slide, it's worth just stepping back a second. TRIG benefits from its scale. It's a portfolio of over 80 projects with a combined value of approximately GBP 3 billion, and that means we can be selective in how we shape our disposal program to improve portfolio composition. We take a balanced scorecard approach to identifying disposal candidates and indeed investment opportunities, and it broadly follows the four themes set out on the slide there. Financial factors, for example, how much a project contributes to dividend cash cover or total return.
Operational factors, which can include both risk mitigation, so asset availability, O&M warranty expiry, later life maintenance, and upside potential, so the ability to deploy hardware and software enhancements, revenue fixing, and repower assets. Finally, in the bottom left, you have portfolio balance or diversification, and that really covers both financial and operational aspects. How decoupled are regulatory regimes across TRIG's markets, how correlated are assets from a resource and a price perspective, and even how different are the counterparties across the different technologies and markets you operate in, and what can that do in terms of helping you manage risk. Those are just some examples, but it does allow us to derive a list of prioritised disposal candidates, and the disposals that we've delivered to date are just us working down that list.
With that in mind, let's look at how those disposals have impacted the portfolio. As Minesh mentioned earlier, over the past 24 months, we've delivered GBP 210 million of sales across seven projects at an average premium in excess of 10%. Now, those sales have all been in the wind sector, with subsidies expiring relatively soon for over half of them, and in the majority of cases, there were operational push factors to consider as well. You can see from the chart on the left the benefit those sales have had. We've increased the proportion of fixed revenues in the portfolio, we've increased inflation correlation, and we've reduced allocation to wind, thereby improving portfolio balance. On top of that, we've delivered GBP 20 million of value uplift whilst maintaining the key financial metrics you see on the right, so ongoing portfolio return, the gearing percentage, and cash yield.
Now, we were glad to be the first movers in the sector when it came to achieving the premium we have, and despite the market softening over the past six months or so, we still have processes ongoing with a good level of interest, and we'll look to provide an update on those in H2. Just to recap, we've talked about the resilience of TRIG's cash flows and growth potential through reinvestment. We've talked about the disciplined approach to managing the balance sheet, giving the business headroom to raise further debt to accelerate growth, and we've talked about TRIG's strong track record on disposals and how that allows us to recycle capital in the portfolio. All of that together allows TRIG to self-fund growth without relying on equity markets.
We have covered sources of funding in a fair amount of detail, but clearly the other side is what you spend the money on. With that, to talk about a good component of that, I am going to pass over to Alastair and Sean, who are going to discuss TRIG's development pipeline and how that positions TRIG to deliver income and capital growth to shareholders.
Thank you, Luke, and good afternoon, everyone. To expand upon that introduction, my name is Alastair Campbell, and I work here at InfraRed, where my primary focus is on driving forward the green and brownfield projects we have within the portfolio.
Today, I'd like to give you a flavor of why we are pursuing these initiatives and provide some insights into our battery pipeline, and alongside my colleague Sean from RES, who will walk us through a case study of one of our French repowering projects. Why do we have a strategy for TRIG to invest in development and construction projects?
Traditionally, TRIG has focused on acquiring operational projects in the market, mainly through bilateral deals with partners we've known for a long time. Through this, we have grown to be one of the leading investors in our sector. This history and active portfolio give us opportunities few others in the sector have. We have access to a large existing site portfolio, which we can self-manage to deliver new repowered sites, avoiding the need to pay large development premiums in the market.
We have an expansive network to access new sites and bilateral deals. We have managers who have that experience and skill set to deliver development and construction projects in appropriately risk-managed processes, which optimize outcomes for TRIG. We have the ability to self-fund all these activities. With these opportunities, we can continually extend the portfolio life, we can deliver long-term growth of capital and income, and we can do this through investments with double-digit returns, all without relying on new equity issuance. Currently, we have a pipeline, as Minesh mentioned, of approximately 1 gigawatt, which we are working to deliver by 2030. To give you a feel for the size of that opportunity, it would relate to a total CapEx of roughly GBP 650 million. That is not all we are working on.
With such a large operating portfolio, we have a continual live internal process of evaluating projects for life extension, repowering, co-location, and augmentation. This list will continue to evolve, both as external and internal factors influence the opportunities open to us. If we add this to the opportunities we can access in the market, we see this as being a long-term growth driver for TRIG. This was one of the main reasons I joined InfraRed and chose to work on TRIG, the opportunity to work within one of the most attractive portfolios in the sector. We have a long-term opportunity to drive growth.
Previous to working here, I ran teams which focused on investing in projects just like this, and one of my main targets was building relationships with companies like TRIG so that we could gain access to their portfolios and take some of the cash back for ourselves. Having the ability to self-deliver this value from our own portfolio was highly attractive to me and one of the reasons I came here. You will hear a lot of different terms being used to describe development projects that we work on, but you will see here that we divide our portfolio into two main categories, aligned with the opportunities I described previously. Our greenfield portfolio relates to brand new sites, and that at this stage is focused on our battery storage pipeline.
Our brownfield portfolio is where we are working on our existing portfolio to extend the life of those assets, largely through repowerings, where we gain plan permissions for, procure, and build new projects in replacement of the existing ones. We first profiled this portfolio about 15 months ago, and we've started to see the fruits of our labor recently. Last week, I was down at our 78 MW Wrighton battery project near Newcastle. That's a project that we designed, gained planning for, and procured as a TRIG-owned project. That's currently mid-construction. In fact, we were just in time when we got there to see the first of the batteries arriving on site, and we're really looking forward to that site going live later this year.
Next up will be the Cooksack project, a repowering project in France, which is in the final stages of design and which Sean will talk through with us in a moment. Later this year, we'll consider our final investment decision for the Spinningmower battery project. A steady run of projects is coming through, and I think we have the opportunity to continue to convert this pipeline at a pace over the coming years. Now, before Sean gives you a run-through of the Cooksack project, I'll quickly speak to our battery pipeline. Just as a reminder, there were two main reasons why we pursued battery projects as our primary greenfield focus at present. Firstly, as we have a large operational wind portfolio, batteries give us a strong internal natural hedge on revenues.
As you'll see in the chart on the left there, capture prices for batteries and onshore wind in the U.K. have been inversely correlated in the past, and forecasts show this is likely to continue into the future. Therefore, it's natural for us to want to bring stability into the portfolio through battery storage. Second, in addition to gaining the hedge through delivering, we can deliver projects which on their own add value to the fund, as we can achieve double-digit returns on a project-by-project basis. Now, there has been some negativity around the sector in recent times, but we can see that market factors continue to improve for these projects, with CapEx still trending strongly down. We've seen a 40% reduction in battery procurement pricing for our latest projects compared to 18 months ago when we did the Wrighton project.
Although other costs have risen slightly, we still anticipate 25%-30% CapEx savings for projects coming through for investment decisions in the near future. Just to be clear, these savings have not come at the expense of our procurement standards. As we did in the Wrighton project, our ESG criteria around supplier selection remain steadfast, with strong contractual protections and practical processes in place throughout the delivery process to ensure our standards are always met. Additionally, you will see here that price capture for batteries has improved significantly since our low point last year. In the near term, we have several projects which we are progressing through well and look forward to taking through procurement and into construction in the near future.
As part of our internal revenue management initiatives, which Nick will speak about later, we applied for and won capacity market contracts for all four of our earliest projects, totaling 300 megawatts. This provides us an excellent base to build upon our revenue stack and investment thesis for these projects. Wrighton I have already spoken about to you, but next is our Spinningmower project, which is currently going through the final stages of design and procurement. We do hope to take final investment decisions on that project later this year. This project was acquired from RAISE in 2022, and we have taken up the baton and taken that through to the beginning of construction. The expectation is that the project will have a merchant trading revenue strategy with forecast revenues broadly in line with that we have seen so far in 2025.
The investment case has been improved by the CapEx price improvements I mentioned previously. With the Spinningmower project and our near-term projects expected to have a CapEx cost, including development premium, of approximately GBP 750,000-GBP 800,000 per megawatt. Our medium-term pipeline, including those FIG projects we have, forecasts at approximately GBP 650,000 per megawatt. Talking about the FIG projects, you'll remember that last year, given the opportunities we saw in greenfield development of batteries, we acquired the development platform FIG Power last year to complement our existing projects and spread the bridges of our investments. This has provided us with a large and diverse development pipeline and efficient internal team to drive them forward, with 10 projects of approximately 550 megawatts currently being progressed and a further pipeline in reserve, which we will look to draw upon as the market progresses.
Since we acquired the company, we've been able to move the projects at pace, and to date, we've achieved four planning permissions, with several other projects waiting to get their permissions this year. In addition, the FIG team has been working to prepare the projects for the current grid reform process. With a diverse, well-progressed portfolio, we are well placed to achieve positive outcomes in that process. Now I'll pass you to Sean, who's going to talk you through our Cooksack repowering project.
Thank you, Alastair. Good afternoon all. As both Alastair and Minesh mentioned, I sit within the RES operations and management team. In the four years I've been with the team, I've sat principally within the French portfolio, which has expanded to southern Europe onshore. In that, activities cover the repowerings that we've seen take place in France.
In this section, before stepping into the case study specifically, I'll just sort of cover a few key features of repowering, what it is, and crucially, why we do it. Firstly, what is repowering? Put simply, it is the replacement of an existing generation plant, which is typically approaching the end of its operational life, with a new, more efficient generation plant. A helpful way to think about it is it shares many of the activities you would expect from a greenfield development, with the fundamental difference being the existing asset needs to be dismantled. This can be helpfully seen on the sequence on screen. Moving on, why repower assets? Repowering offers TRIG a natural development pipeline, and crucially, the development phase work can be done in parallel with the existing assets' operations, softening the cost impact to TRIG on the front end.
Planning consents are typically less rigorous, and much of the existing onsite infrastructure can be reused, requiring less land clearances and, in turn, less compensatory planting to be included within your planning consents. These factors contribute to a shorter end-to-end timeline. From the issuance of feasibility study to commissioning of the new site can take five to six years, as compared to seven or eight years in the best case for a greenfield development with similar parameters. Repowering gives TRG the ability to extend life by as much as 35 years. Through newer and more efficient turbines, increases in site capacity are also possible. This is sort of a practical example of how you achieve that evergreen concept that Luke mentioned earlier. Government support mechanisms add to the robust investment case, with tariff levels comparable to, and in recent months, in excess of merchant capture prices.
What does this look like in reality? The Cooksack wind farm in the south of France, comprising six Vestas V80 turbines with a total installed capacity of 12 megawatts, was commissioned in 2006. It was brought into the TRIG portfolio at IPO, and crucially, as part of the acquisition, TRIG retained the repowering rights. Going from 12 megawatts to 25.2 megawatts, we can see the repowered wind farm will more than double its installed capacity of the existing asset while still using the same land area. The repowered wind farm will benefit from an attractive index-linked tariff for a term of 20 years, with a base price of EUR 86 per megawatt hour. This certainty of a price aligns with TRIG's revenue management strategy and underpins project cash flows.
Furthermore, the 20-year tariff provides greater flexibility on financing arrangements, making project finance not just an attractive proposition but a distinct likelihood. As such, a more modest equity investment post-debt of EUR 15 million is expected. The investment case for the repowering of Cooksack is attractive, and construction of the new wind farm is planned to commence later this year, targeting a commissioning date in the second half of 2026. Thank you for that. I'll pass back to Alastair.
Thanks, Sean, for those insights. I'm really looking forward to seeing that project built in the next couple of years.
I hope myself and Sean are giving you a sense of how our development pipeline has been managed and how we hope it will drive returns for TRIG and you as our investors, especially given that TRIG has access to both a large proprietary brownfield pipeline and the relationships to find accretive greenfield opportunities. We have the opportunity to self-fund an exciting selection of projects which can achieve double-figure returns, extend the life of the company, and naturally introduce revenue stability, and that both managers have the experience, skills, and drive to realize this strategy for you. Thank you for that, and I think I'll pass back to Minesh. Thank you very much.
Thank you, Luke, James, Alastair, Sean, for a very interesting couple of sessions covering our investment and financing strategy. We'll now take a little over 10-minute break, and we'll reconvene.
You'll hear from Nick, from Fiona, and Mehdi on our operational strategy. We'll resume at 3:15 P.M. Thank you. Welcome back, everyone, to the second half of this afternoon's TRIG Capital Markets seminar. Without any further introduction, I'll hand over to Nick Speechley.
Thank you very much, and good afternoon, everybody. I'm Nick Speechley, and I lead on TRIG's revenue management. My background is actually energy trading, so having previously worked with Octopus Energy and then Accenture's trading investment and optimisation strategy team. There we go. Whereas active revenue management is core to utility and trading businesses, historically, it's been a lower priority for investors in renewables due to the prevalence of government-backed contracts. Now, however, this is changing as these contracts start to expire and projects enter their merchant tale.
TRG already prices the additional risks associated with merchant revenues by applying higher discount rates to these revenue streams. As the share of merchant revenues grow, active revenue management is becoming an increasingly important differentiator for investors. That is because it provides better cash flow visibility in the short term, and it can enhance value to support self-funded growth over the long term. In this session, I'll talk about how TRG applies a wide toolkit of hedging instruments to manage its market risks. We'll touch upon corporate power purchase agreements, the kind of landscape there, and why we think that they are becoming increasingly relevant for TRG. I'll close with a recap with some examples of TRG's activities in revenue management to date. Let's start by looking at the power price landscape across TRG's key markets.
This chart shows TRIG's Q1 2025 capture price forecast by market and generation technology. These are essentially the prices that a merchant asset would be expected to receive, and these are the curves that go into our project valuations. We can kind of identify three high-level trends here. Initially, at number one, we have a reduction in power prices in the near term due to an increase in global LNG supply, which largely is coming from the U.S. and the Middle East. It is worth noting that Sweden is a bit of an exception as gas is less important as a price driver across many Nordic markets due to the prevalence of hydro. We move to number two. We then start to see an increase in power prices in the medium term. This is due to the electrification of transport and heating outpacing the build-out of renewables.
In the long term, the renewable build-out starts to catch up, and that has a counterbalancing effect on price increases over the long term. Beyond these high-level trends, we also can see that capture prices differ by market and by generation technology. In the case of markets, as we've seen over the last five years, different states will take different approaches to regulation. They will take different approaches in crisis response, for instance, the invasion of Ukraine, and they will take different approaches to the energy transition. We can also see that these capture price curves differ by the generation technology. For example, the price of Spanish solar is expected to be lower, as is an expectation of higher solar build-out in Iberia, which applies downward pressure to prices in the region.
TRG's diversified portfolio is the first element of managing its power price risk. As you heard from Alastair earlier, in relation to wind and batteries, there can be helpful negative correlations between the capture prices for different technologies, which provide a natural hedge benefit to TRG's portfolio. For example, if the U.K. government was to increase support for solar relative to wind in a future CFD allocation round, we would expect to see a reduction in solar capture prices and a corresponding increase with wind. There is a natural offset there. For that reason, portfolio diversification gives TRG a solid foundation to lower its exposure to any single market or any single generation technology.
Now, where active revenue management comes in is it builds upon this foundation by finding fixing opportunities that, on one hand, enhance value and on the other, to manage any residual merchant price risk. Let us move to how TRIG thinks about revenue management. This is a chart that we saw in the first half. This is TRIG's aggregate portfolio revenues over time, split by fixed, merchant, and also battery revenues. To reiterate, this is net of debt service. This is where we are now. In order to construct an active revenue management strategy, we first need to set some high-level objectives to optimize for and then to also sort of benchmark against. Our first objective is to support cash flows to service TRIG's dividend. The second is to maintain some headroom to fix when there are opportunities for value upside.
This is where this idea of the hedge corridor concept sort of comes in. This represents a theoretical fixing range which should achieve both of these aims. The longer the time to maturity of a fix, the more time there is for volatility to act on prices both up or down. As a result, the hedge corridor has a downward slope. Now, over-hedging in the long term is undesirable as it creates market timing risks from locking in a price at a particular moment in time, and it also takes away from future upside potential. For example, this could be problematic in an inflationary event. That could create the possibility for fixed revenues to decouple from the market's growth expectations for TRIG.
To manage this risk, the hedge corridor shifts forward over the passage of time, serving to spread fixes across multiple vintages and building a hedge position over a macro cycle. In the near term, TRIG prioritizes security of cash flows to service its dividend with a high proportion of revenues being fixed. In practice, the fine-tuning of our short-term hedge position mostly takes place via our existing physical power purchase agreements, which will often contain an embedded option for us to be able to fix our pricing for up to one, maybe two years forward. TRIG increasingly includes clauses like that when we structure our new route-to-market PPAs to increase that optionality in our portfolio. Moving to the medium term, we can see that TRIG is slightly above the theoretical hedge scenario, but it is still within this hedge corridor range.
It is worth remembering that this chart is net of debt service. Being at the upper end of the range is not unexpected for a portfolio with some headroom to its debt service. Finally, in the long term, we see that the percentage of fixed portfolio revenues reduces as projects move into their merchant tale. Power prices are, or rather power futures markets are, largely illiquid this far forward. Long-term power purchase agreements can also be used to start building a hedge position this far out. This is very much an area of focus at the moment.
It is also worth bearing in mind that unlike in the short term, when we are hedging this far out, the hedge proportion that we should be hedging or could hedge to under the hedge corridor means that we are not compelled to be price-taking if the price point is not too attractive for TRIG. We are being more sort of opportunistic, and we are very much trying to capture value in any fixing that we are doing over the long term. We have covered why to hedge and sort of what to hedge, and I will now turn to the tools that we use to actually do it. Maybe stating the obvious, but the main risk that revenue management seeks to address is price risk. We are trying to swap a floating price for a fixed price, in essence.
Now, as you'll see on the table, there are lots of hedging instruments available for us to do this, but not all of these hedge risks are created equal. To build on this concept, we can think about hedging instruments in terms of risk transfer and the cost associated with transferring that risk. The main difference with the option shown here is the transfer of something called profile risk. The profile risk is a risk to a project's capture price that's due to mismatches between a fixed contracted volume and the actual variable generation. Those mismatches have to be settled at the floating spot price. Up at the top, we have a pay-as-produce structure. In these structures, all of the profile risk is being transferred to an off-taker. On the other extreme, we have a base-load contract.
That's where a project sells a fixed volume, and therefore it keeps a profile risk. Now, on the face of it, you'd think that a pay-as-produced contract seems like a very obvious choice for us. However, the availability and cost of pay-as-produced contracts varies wildly by market and by the generation technology. A good example of this would be in a smaller market such as Sweden, a pay-as-produced contract is not only uncommon, but when you do find them, you may incur almost twice the discount to fair value that you would expect to find with a market with more depth, say, for instance, GB. Therefore, a one-size-fits-all approach to fixing is rarely the best value for investors. How do we actually apply this in practice? In situations where pay-as-produced fixes are unviable, TRIG uses other instruments in its toolkit.
It will only use those instruments when the price risk that is being removed outweighs the profile risk. In this way, rather than approaching revenue management as a simple binary choice between fully pay-as-produced or merchant, we're finding a middle ground to secure higher value for shareholders on a risk-adjusted basis. Now I want to turn to one type of contract in particular that I've already mentioned, and that is the corporate power purchase agreement. We see this market as being particularly significant for TRG for three reasons. Firstly, corporate power purchase agreements present an opportunity for value enhancement. A financial or a utility counterparty will operate a trading-based business model. This means that when they contract with a generator, they will on-sell part of their long position into the traded markets.
Now, as I touched upon earlier, the power markets are fairly illiquid over the long term. If we're trying to fix for sort of 10 years, they may not actually be able to back out their risk beyond maybe three or four. Therefore, it incurs a high cost in order to manage that risk. Ultimately, what that translates to is a lower fixed price under the power purchase agreement. However, by contrast, corporates enter into power purchase agreements to lower their carbon footprint, but also increasingly to fix their price for a longer period of time, a period of time that may not be available under their business energy supply agreement. Because corporates are not backing out their risk into a traded market, there's a green premium here, which can be captured by going straight to a corporate off-taker.
Secondly, as you'll see from the chart on the left-hand side, the European corporate PPA deal flow has increased considerably since 2018. Whilst initially this was a market that was largely dominated by very substantial tech players, we're starting to see more buy-side interest at contract sizes, importantly, that fits well within TRIG's portfolio. Lastly, we're seeing more buy-side interest in operational projects. Rising CFD prices across much of Europe have squeezed many corporate players out of the market to contract with new build assets. Operational assets have an opportunity to agree a strike price that is below that CFD price level, but is still at a premium to the price curves that TRIG would apply in its valuation. That's sort of all the theory, I suppose. I mean, TRIG has also seen this trend to contract with operational projects in practice.
Already, we have signed corporate PPAs with a telco in GB, a green hydrogen off-taker in France, and a large industrial in Spain. All of those were with operational projects. All of them were on a fully pay-as-produced basis, and all of them were at value-accretive price points. We are building a pipeline of similar opportunities with live processors underway on long-term PPAs, all of which are on a pay-as-produced basis. We also have other opportunities and have exploited other opportunities in the past to be able to kind of reach into the long term and start fixing our volumes. A good example, as we heard earlier, was one that Sean gave about TRG's French onshore asset striking a 20-year inflation-linked CFD upon repowering. We have agreed similar agreements for TRG's GB battery pipeline.
In the latest CM auction round, TRG's project won three 15-year inflation-linked CM agreements. Lastly, whilst these are all things that TRG is doing in the long term to capture more value, we've also not lost sight of the short-term objective to improve our cash flow visibility. TRG will regularly use options to fix embedded within its physical route-to-market PPAs, as I've already mentioned, and that enables us to fine-tune our short-term hedge position. We're also applying this wider toolkit to lower merchant price risk where a conventional pay-as-produced fix would otherwise be available. In summary, I started by talking about how revenue management is improving cash flow visibility in the near term whilst maintaining the upside potential through the example of a hedging corridor. We then moved on to how and why corporate PPAs are increasingly attractive for TRG's portfolio.
This idea of how using a wider toolkit is able to achieve better outcomes for shareholders is important. With that, I will hand over to Fiona and Mehdi, who I believe will take us through some of the exciting operational enhancements that we are currently rolling out across the pipeline.
Thank you, Nick. To introduce myself, my name is Fiona Power, and I'm a part of the RES TRG operations team, which I joined about four years ago. Part of my role now is to look after the operational enhancements across the TRG portfolio. Operational enhancements are a really exciting area for us. They continue to be a key focus for TRG as an opportunity to protect and maximize our existing portfolio. You'll have heard previously that we've delivered over GBP 70 million worth of valuation upside over the past five years, and we are on track and committed to delivering another GBP 70 million over the next two. TRG is uniquely placed within the industry, leveraging across the wider RES experience and expertise, gained over 40 years of experience across the wind, solar, and battery asset classes.
We're continuing to work closely with a variety of our partners, including asset managers, manufacturers, operations and maintenance providers, joint venture partners, and third-party operators, to deliver improved performance, better efficiencies, and ultimately value upside, whether through enhanced generation or reduced costs. Looking back to 2019, at what as a team we've been able to collaboratively deliver, I'm really proud to be in this position now. To date, we have delivered enhancements, including physical hardware attachments to blades like the one you can see out in the lobby. Software enhancements to optimize the way in which the turbines control the blades, the way the turbines yaw towards the wind, and the way that the blades pitch to extract the most energy from the wind.
We also use much, much higher frequency data from the turbines and the solar panels, which will enable additional analysis to provide insight and intelligence into how to optimize turbine and solar settings. These programs and sometimes minor incremental changes will harness greater wind and irradiance power, deliver less wear and tear on components, enable longer technical life of parts, fewer repairs, shorter and less costly maintenance regimes, and ultimately deliver improved generation. The AeroUp hardware blade installations, which we first trialed at two sites in 2022, are now being fully deployed at sites with an installed capacity of 178 megawatts across the U.K. and France, with improved yields already evident from day one post-installation. The TuneUp software enhancements, as we speak, are assessing turbine controller settings, providing greater insight into the parameter changes that we can make to incrementally improve generation.
These are being rolled out throughout a number of our onshore U.K. and French sites at scale. The Dynamic Yaw Pilot Program, which we started in 2019 as a research platform at Alta Hoolian in Northern Ireland, will by the end of this year have been rolled out and become operational at over 74 megawatts worth of assets. Offshore, we've seen power curve upgrades delivered at three of our sites, increasing the amount of electricity generated at lower wind speeds. In the solar portfolio, we are optimizing the operation of inverters, the component which transforms the direct current generated to the alternating current required of the grid connections. This will respond better at higher ambient and operating temperatures, will deliver higher overall generation performance alongside less component wear.
It's a really exciting and fast-paced area, and I'm delighted to introduce Mehdi from the RES Digital Solutions teams, who's going to talk to us in some greater detail about some of the transformative rollouts that they're currently working on across the TRIG sites.
Thank you, Fiona. Hi, everyone. My name is Mehdi Zohuri. I'm the Vice President from Digital Solutions Business Unit in RES. Over the next few slides, what I'm going to cover is effectively the methodology and technologies used to deliver those exceptional results at the TRIG sites. We have been partners for several years now. We're primarily going to cover the wind technologies, give you a couple of use cases to really bring those numbers home for you, make them real. Finally, talk a little bit about the solar technologies as well that we are in conjunction also rolling out. Starting with the first slide here, which is really talking about the technology and the methodology that we have proven over and over again that works and delivers energy yield and tangible results to the asset operations. We always start with data.
It all starts with the data because the data allows us to baseline the asset performance, fix what needs fixing before boosting performance. There are two types of data that we're going to talk about here. One is around visual data that you could get from the blades, where you could see the integrity and if there are any damages that need to be fixed. Of course, there's the data that sits at the turbine or at the assets themselves to extract as much of it as possible. That always starts with baselining the performance of the asset, which ultimately enhances the asset reliability. The second step is around adding hardware to improve the aerodynamic properties of the blade. This is all inspired by advances in other industries such as Formula 1 and aerospace to improve the energy yield.
Last but not least, it's around the software upgrades that we make to the turbine controllers to help optimize the controller settings. Again, that helps you retain and enhance the value beyond what you've already seen. Let me start with data and the visual data and how technology helps us with that. You may have seen in some of the wind parks the usage of drone for visual inspection of the blades. This could be part of the regular operations and maintenance activities of the wind parks. It could be more event-driven, such as lightning storm. The usage of drone technology has become much more common in the industry. Of course, here in this example, you see a semi-autonomous drone allowing the operators to use their own drone, uploading the software that we in RES Digital have onto the drone.
You can see that it will start to scan the blades one after another. Each blade takes about 10-15 minutes depending on the rotor size. It is semi-autonomous, meaning that a lot of it is autonomous, but the pilot is there just in case to intervene in certain aspects of the operation and the inspection. You could store the drone at site so that you can do the visual inspection as and when needed or as part of the regular operations and maintenance. Sometimes it will be weather-related, of course, when there is a lightning storm where you would have a lightning incident. These blades typically have lightning protection systems within them, meaning that they can pass the current through it without it impacting the blade.
Sometimes these lightning protection systems are down and you do not know until the lightning strikes and you want to just get peace of mind. You can see the images that come from the drone get seamlessly downloaded to a software platform for the operators and users to have a look at. You could see here a category four or five damage that you can actually analyze, and you have to start doing the repair work. That is one sort of data that you would collect, which is visual data. There is a different type of data, which is the data that sits at the asset itself. We typically refer to this as the high-frequency data, meaning that we go into sub-second data as opposed to the 5-10 minute industry standard.
That has many advantages with it that I'm going to get into in a moment. You get the sub-second data from the turbines. This gives you 30 times more data resolution compared to standard data. You feed that data into the analytics dashboards. We have 250+ physics-based models that consume that data. You can have all the data in the world, but if you can't analyze it, it's worthless. Using the analysis, you can take the action on those wind turbines by going back to the parameters of the turbine controllers and changing them to get the optimized performance. I'm going to walk you through what these steps look like in reality. Data access, I mentioned, is really the first step when it comes to the turbine data.
Here, whenever we talk about data access, we typically, in the industry, are referring to systems that are downstream of the wind turbines themselves, things like SCADA that you may have heard of. Typically, for context, that gives you 5-10 minute intervals of data. When you start to go into sub-second data, you're getting 30 times more resolution because you could go up to 3,000 data points as opposed to 50-100. You only can do that by accessing the turbines directly. You have to go behind all these secondary, tertiary systems and directly communicate with the turbine itself to get a complete and utter view of what's happening at the turbine.
What that allows you to do is to then feed those analytical models that I mentioned to look at major parts of the wind turbine, such as the gearbox or the generators or the pitch system or the yaw system, because a lot of these events would be hidden otherwise if you're not looking at the sub-second data. Here you have an example of a misaligned pitch, which pitches effectively the angle of the blade as it faces the wind. If you have a misaligned pitch, that could cause vibrations in the rotor. Vibrations means more wear and tear. You have to change your major components more regularly than you need to. If you do not know about it because you're not looking at the high-frequency data, you'll never fix it until you have to fix the component.
Going beyond the analysis, then being able to take action to change those parameters at the turbines themselves is the last step of the puzzle when it comes to baselining the asset performance. Using, again, advanced digital solutions, you are able to do that, going back to the controllers, changing the parameters from where they were before to enhance the reliability of the asset. That is the first part of that methodology and technology that I mentioned. The second part is around hardware enhancements. As you may have noticed, we have a few props like these, and I am happy to share with you a few if you want to pass it around. I will not give you the big ones, but so that you could look for yourselves, if you do not mind passing these around. Thank you. There are three types of hardware we are going to talk about.
There was that beautiful masterpiece outside, the winglet tip that you saw. Unfortunately, we do not have space for it here, so that is why it is outside. You have seen this on those for those who fly regularly, which I am sure everyone does. You have seen the tip of the plane wings, right? It is the same technology. That is what I mean by the inspiration by aerospace. That is one example. Vortex generators, again, you have seen these on the wings of the plane. I am going to talk to you about how those work. Gurney flaps are effectively like the wings that you get at the end of the Formula 1 machines that you could see that increases the lift in this case. Here are some schematics here just to show where these things go. These are the vortex generators.
As you can see, it goes at the front of the blade, what we call the leading edge. Its job is to create vortices. What does that mean? Why do you need vortices? It helps you to keep the air right next to the blade and help with the aerodynamic efficiencies. Without it, you could see that there is an air separation or flow is separated, which means you are just missing out on additional power generation that you could have. You have the gurney flaps, which actually fit at the back of the blade. Their job is to separate the two sides of the blade. We call the suction and the pressure side. By that separation, you are effectively reducing the resistance against the blade as it is rotating. They fit at the back end of the blades.
Last but not least, the winglet tip, which you can have a look at outside during the break, also separates the flow of the two sides of the blade at the tip of the turbine. Again, it keeps the vortices small because it is getting to the end of the blade. That reduces resistance. Again, the rotors can spin much more freely and helps improve the lift, which is effectively the direction you want the turbine to spin. Just to make them even more real for you, we have some lovely pictures of some of these being installed at TRIG sites. You could see on this is the L seat Onshore Wind Farm, the turbine without and with the winglet tip after it has been installed. This is one of the wind farms that is currently in progress in terms of the deployment.
You could see them in action at one wind turbine at the same wind farm where you could see the vortex generators fitted at the front of the blade, the leading edge, gurney flaps at the back or the trailing edge, and you have the winglet tips at the tip. Here is another picture of it after it has been installed. The last step in the three-step journey that we mentioned, we started with the data and how it helps baseline the performance of the asset. We then talked about the hardware that goes on it to improve the aerodynamic efficiency. The last step is about improving the performance of the controllers that operate the turbine. There are two reasons why we need to do this after we have added hardware. One, we have added hardware, therefore we have changed the aerodynamic properties of the blade.
It would be a shame not to actually optimize the control parameters now that we've changed the situation, the conditions of the blades. The second point, and the second reason why it makes sense to look at the controllers, is because when the wind farm is constructed, typically 5, 10 years ago, there's natural wear and tear of the machines, wind and weather conditions have changed. Those control parameters are no longer optimal from when the wind farm was initially constructed. Because of these two reasons, we look at how can we optimize the controller performance. The way we do that, again, is to use the tools that we have, such as Enemo, to get the high-frequency data that I mentioned, all that sub-second data that we talked about, and then feed that into our simulations and models that come up with optimized parameter settings.
We typically look at the low to medium wind speed because that's where we see a lot of benefit without much impact on the lifetime of the asset. Now that we've covered the three steps, I want to talk a little bit about what we do to validate the performance of the uplift. I'm proud to say that in TRIG, whenever we have looked at enhancements like this, we always validate before we roll out to the remainder of the wind farm. This validation is key to ensure that you have the peace of mind on the return on investment. We are producing 1-3% AEP that we promised and we set out to do. There are two ways of validating that.
The first is a before and after, meaning you effectively apply the changes to half the turbines and leave the other half unchanged. You compare the two together over a period of time, three to six months. Once it's been validated, we're happy, we deploy to the rest. That's option one. Option two is when you toggle test. Basically, you set the optimized parameters in 20-minute, 30-minute intervals for two, three months. That is a better way of validating. Of course, the drawback is you cannot do it with hardware because you can't send anyone every 30 minutes to the farm to take it off and put it back on. It just wouldn't make sense, right? This validation methodology is fully open. It's been open-sourced for a reason. We don't want it to be a black box. We want our customers to analyze it themselves.
It has been reviewed by very reputable bodies like DNV that drive the standardization in the industry. Now, let's bring all of this to life a little bit more. Let's look at a couple of case studies. The first case study is the Alta Hoolian onshore wind farm. This presented a very interesting challenge. It's one of the more mature ones in the TRIG portfolio. As you can see, it has a layout that's not linear, meaning wind turbines are getting in the way of each other. What happens is what we call the wake effect. The wind turbines that are at the front create a wake effect for the ones at the back. That just means that the wind farm as a whole is not producing as it should.
The other point to raise here is that each wind turbine is designed so that it hugs the wind as much as possible, meaning it faces the wind direction as much as possible at all times. While that might be good for that one turbine, it's not very good for the ones at the back. That was the biggest challenge that we had for this wind farm. In partnership with TRG, we came up, we basically tested a very interesting technology called Dynamic Yaw, which effectively does two things for that wind farm. One, it gets the wind turbines to communicate with each other. Two, it allows the wind turbines that are at the front to sacrifice themselves for the greater good, meaning they on purpose misalign themselves against the wind direction just to allow more wind for the ones at the back.
As a whole, the wind farm generates more energy. Through that, we managed to validate that we managed to generate 1.3% extra energy as a result of that technology implementation. On top of that, we did the control parameter optimization of the turbines, which is really looking at, again, the pitch angle of the blades. Just for clarity, the pitch is the angle of the blade against the wind direction. That generated another 2.1%. In total, we managed to validate that we are delivering 3.4% overall energy uplift. Case study two is Hill of Tower, which is one of the newer ones. This was a 48 MW wind farm in Scotland. Again, we wanted to just get as much energy as possible from this wind farm.
What we implemented here was a combination of data, hardware, and software that I mentioned, the more classic approach that we have in our toolkit. We basically installed all the hardware that was possible, including the winglet tips, that gave us 4.1% additional energy uplift. That is quite a big number for electricity standards, electricity generation standards, and another 1% almost in the software upgrade that we made. In total, together, we've managed to prove that we can deliver up to 5% annual energy production on top of the previous production levels. The last section of my session is going to really revolve around what we're doing in the solar assets. Of course, we've undertaken similar efforts for the solar assets in TRIG, where we are taking a similar approach to optimizing asset performance. Again, the first step is about accessing the high-frequency data.
We have another product called Helio, which is effectively the same, but just for solar farms, to give as much access as possible to all the data that is available from the asset. The second step is to then analyze that data and then look at what are those optimization opportunities. One case that I am going to highlight here is a control optimization solution called Optivert that we managed to deploy and test quite successfully. It really revolves around inverters. Fiona mentioned what an inverter is. I am going to recap here a bit. Inverters are a critical part of every solar farm because it converts the direct current that is generated from those solar panels into alternating current for transmission. If you do not do it, you cannot transmit the electricity as efficiently as you possibly can.
You can imagine the inverters become a bottleneck for a lot of the solar farms. If they're down, the whole solar farm is down, so to speak. This was a challenge on some of the solar farms we encountered where on hot days, some of these semiconductor modules within those inverters tripped quite regularly. That means that they shut themselves down. You have no power going until someone physically goes and switches it back on. It kept happening repeatedly on hot days. I have to send people several times a day to just get the machine back up and running. We realized that the problem for this was coming from the inverters overheating on hot days, meaning they could not manage their own temperature quite as effectively.
We came up with a control solution called Optivert that effectively connects with the controller of the inverters to help them manage the temperature much better. Through that, we managed to avoid the tripping altogether, so to speak. You can see that the power output through the solid line there is what Optivert managed to generate as opposed to the zigzag on and off tripping. We managed to increase energy production by up to 20% on hot days. Depending on the country, that could translate into 1-2% AEP addition. The second aspect of the value here is also the OpEx cost that you could save because you are not wearing and tearing the modules as much because you are not tripping constantly. That also has a secondary value associated with it. It is not just a top line. It is also a bottom line value.
With that, I wanted to hand it over back to you, Fiona, to wrap it up.
Thank you, Mehdi. Hopefully, that has given you a bit of a flavor of some of the innovative activities that are currently underway across the portfolio at the moment, seeing all the case studies through the pack, the physical hardware attachments here, hopefully brings to life a little bit of what we are doing on a day-to-day basis. I would like to hand back to Minesh now for some closing comments. Thank you.
Thank you, Fiona and Mehdi. Thank you to our other presenters today. What the team has shown you today is that we can self-fund growth. With a modest level of reinvestment and an attractive double-digit returns, we can not only replenish the portfolio such that TRIG has eternal life, but also grow the capital base and the income potential into the long term. We have the pipeline to do this. The team has also shown you that our disciplined approach to balance sheet management is now coming into its own. Whilst government-backed offtake contracts will roll off over time, we have no debt cliff edge, which means we have full flexibility in relation to the capital structure of the future based on the revenue profile of the future. The team has shown that we are investing accretively.
We have the balance sheet to both buy back shares and run at our proprietary investment pipeline. We will be selective in adding to that pipeline. Where it beats the hurdle rate set by buybacks, and that is really important, we will seek to pursue these opportunities with capital allocation adjusting in response. The team has also showcased our additional growth levers. The managers combine the investment pedigree of InfraRed with the operational excellence of RES. Together, the managers' specialist resources bring innovation to TRIG as we seek to outperform the base case. Now, for many organizations, this expertise either sits at the investee company level or is outsourced.
For TRIG, this service is available from the management team, resulting in a coherent joined-up strategy where we can share knowledge and ideas across the portfolio to maximize the benefit of enhancements for all the projects and therefore for you, the shareholders. What this means is that the 11% base case annualized return of today's share price is exactly that. It is our expectation of the base case based on what is in the NAV. Now, with long-term rates in the 4s, this on its own represents a 6% premium to long-term reference rates, together with the benefit of inflation correlation. That is before we factor in what you've heard today as areas for outperformance: growth investments, revenue enhancements, and operational upgrades. This is what we mean by active management.
This is why TRIG is well-positioned to re-rate in the near term and deliver attractive returns for the long term.