Octopus Renewables posts lower NAV; outlook lifted by EU energy demand

Octopus Renewables Infrastructure Trust PLC has kept a positive outlook on expected EU electricity demand growth despite a "challenging" first half.

The London-based investment company, which invests in renewable energy assets in Europe and Australia, said its net asset value per share fell 8.1% to 86.2 pence from 93.8 pence at December 31.

Shares in Octopus Renewables were down 0.2% at 60.59 pence early Tuesday afternoon in London.

NAV total return was negative 5.0% in the first half ended June 30, compared with negative 0.2% a year ago.

The lower NAV, which Octopus Renewables described as "disappointing", was mainly due to a review of its onshore wind energy yields, which reduced NAV by £30.4 million, as well as lower long-term power price forecasts and higher discount rates.

Chair Philip Austin explained, "The first half of 2026 remained challenging for ORIT and for the listed renewable infrastructure sector more broadly. Persistent sector discounts, pressure on power price forecasts, subdued transaction volumes in the private markets and a changing policy backdrop continued to weigh on valuations and investor sentiment."

Octopus Renewables declared an interim dividend of 3.11 pence, up 1.0% from 3.08 pence a year ago.

Looking ahead, Octopus Renewables said the longer-term demand outlook remains positive, with the International Energy Agency expecting European Union electricity demand growth to average 2.3% a year, adding about 300 terawatt-hours between 2026 and 2030. Data centres, electrification and a gradual recovery in industrial use are expected to drive this growth.

In the near term, Octopus Renewables said it sees opportunities to increase the value of its existing assets by adding batteries, combining different types of renewable energy and upgrading older projects.

It plans to assess new investment opportunities against other uses of capital and its ORIT 2030 strategy, which aims to significantly increase the business's value by 2030. The company plans to reduce debt by selling some assets and improve the performance of its existing projects.

"The wider market environment is likely to remain uncertain, but the long-term need for renewable generation, energy security and system flexibility remains compelling. ORIT's diversified portfolio, contracted revenue base and access to the specialist capabilities of Octopus Energy Generation position the Company well to navigate this environment and continue to pursue long-term value creation for shareholders," Austin said.

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