GEIA future?

Couple of the big renewable funds are saying up to 4% hit

www.telegraph.co.uk/finance/personalfinance/investing/11738395/Budget-blow-to-investors-in-solar-power.html

Edit: Aware its solar but unlikely to be different for WT. Statement from one of the renewable companies with big wind interest doesnt make happy reading 



****** notes yesterday's announcement in the Budget that the government intends to discontinue the Climate Change Levy (CCL) exemption for renewable generators from 1 August 2015. The CCL has been a key component of the renewable support regime in the UK since 2001 and all parties in the renewable industry had understood that phase-out would not commence until after 2020.

Based on our initial assessment of this measure, ****** expects a reduction in EBITDA of approximately £7 million in the year ending 31 March 2016 and approximately £10-11 million in the year ending 31 March 2017.

**********, CEO of *******, said: "The announcement of the government's intention to discontinue the CCL at this time was quite without warning. We are disappointed by the several recent changes to the regulatory framework which will disincentivise long-term investment in the build-out of new energy infrastructure in the UK. ******** generates low cost, reliable, renewable energy and we now look to the government for regulatory stability."

No prizes for guessing where my one green investment is

Maybe I missed it but I'm still not sure about how the budget change in the LEC (Levy Exemption Certificates) affects WT's. I should already know the answer to this. Perhaps others are holding back for this reason?

My guess on the slow uptake is that the GEIA green monster is being kept on a tight leash & can’t easily replace other WT loan units with loan 180, for the time being at least. jonah's experiment could indicate that having first fixed GEIA accounts with > 20% weightings to existing WT deals (the first thing it did straight after drawdown) it then uses 180 to fill new GEIA demand with anything it can’t fill from prior loan units. That way at least the funds are deployed.

Presumably at some point AC will press a button to kick the monster into action with a much more comprehensive dislodge & replace operation. That may not be deemed worthwhile until there’s a substantial volume of lumpy GEIA accounts.


Couple of the big renewable funds are saying up to 4% hit

Sounds about right (I've heard numbers largely in the 2-5% range). Haven’t looked at this aspect properly, at a guess I’d reckon the funds take a bigger hit as the plants they own are bigger & earn a lower FIT/RO incentive, hence the LECs are a larger component of the income stream.
On loan 180 AC have said the LECs weren’t even included in the income stream used to calculate DSC (so their cancellation has no effect). No mention of the valuation however (which in the past have used different data inputs to the DSC.) Perhaps davidricketts1 could confirm if any AC green loan valuations (& DSC) calcs have to date included LECs in the income stream or not.

The removal of the CCL exemption has annoyed many in the renewables industry because (apart from knocking a few points out of your projects) it was a bolt out of the blue no-one was expecting. Cuts in FITs, RO's, perhaps changes in degression yes all feared/expected, but this was a curve ball no-one saw coming. Trying to look at the upside the £450-900m/yr savings claimed hopefully will soften the blow on the FIT cuts.

Jonah's list of 10 GEIA loans doesn't mention #121 and #127. Does that mean they aren't included in the GEIA?

Could be. That list was from all Geia loans I'd ever held in the Geia account with the current active percentage. If I didn't get a nibble then it wouldn't be on the list.

reading back through the trades, the first two purchases when I put in the cash on Sunday were both 20% of loan 180 and then nothing more. I wonder if it bought the second 20% not realising it already had the first.

either way, I'll give it another few days to see if it shuffles any more (currently nothing since Saturday) and then add another slice, probably this weekend.

No that has not happened and the algorithm is unchanged in the last few months.  I think any change to diversification like that would require the issuing of a series 2 account, but that would be for our legal and compliance team to decide.

I am actively working on a big update to the algorithm though to improve the way it handles investments and then rebalances between investors in the account, but this is tied to a wider revamp of how investments are handled behind the scenes and I don't yet have a release date.  Should be Q3 unless there's a big internal shift in priorities.

With the moveable feast of draw-down dates and prior to faster payments, I have done a lot of removing and then re- investing in the GEIA recently. Removing funds has been very fast although sometimes it has left a few pounds and pennies behind, and the longest it took to re- invest 100% was 2 days although generally it managed it in one. I am dealing in hundreds though, and I wonder if four or five figure sums would be a different ball game?  

I haven't a clue what it's invested in and really can't be bothered to work it out, it is however as mad as ever, at the end of last week for example it sold and purchased exactly the same amount of one WT more than 50 times before finally selling and then purchasing a different WT. Interestingly the WT part it sold was slightly under 5% of my total GEIA holding suggesting it had been top heavy in this and got an opportunity to trade it for another, on the other hand.....

In general I have to say I think it's much improved and although I'll use it less with the advent of FP's I think I'll carry on keeping some investments in it.

One neat improvement however, might be for it to tell us at a glance what we hold of which loan, either in total or proportionally would do  .