NextEnergy Solar Fund Limited

Carbon Price Support Removal

NextEnergy Solar Fund, a leading specialist investor in solar energy and energy storage, notes yesterday’s statement from the UK Government that it will legislate to remove Carbon Price Support (“CPS”) with effect from April 2028.

What is CPS?

CPS is a tax on fossil fuels used in electricity generation, introduced in 2013. It acts as a top-up to the UK Emissions Trading Scheme (“ETS”) ensuring that power generators pay a minimum carbon price per tonne of CO2 emitted.

What is ETS?

The UK ETS is a market-based policy tool designed to reduce greenhouse gas emissions. It works by setting a cap on the total level of emissions allowed and distributing permits or allowances for emissions up to that cap. Companies can buy and sell these allowances, providing an economic incentive to reduce emissions. Similar schemes exist in other markets, and they play a central role in the decarbonisation of the UK market.

Why is the UK Government removing CPS?

The UK Government has stated that it considers the CPS to have met its original objectives and no longer to be required. Coal generation has largely exited the UK power mix, and the UK ETS is now established, with a tighter cap intended to strengthen decarbonisation incentives for electricity generators. In this context, the Government has set out an intention to simplify the existing tax and carbon pricing framework. The removal of CPS has also been presented as a measure that would partially offset the costs to billpayers associated with the British Industrial Competitiveness Scheme, which is designed to reduce electricity costs for manufacturing sectors.

When will this happen?

The Government has indicated it will legislate for the removal of CPS in a future Finance Bill, ahead of April 2028.

How does CPS affect power prices?

The Company uses multiple third-party providers for its UK power price forecasts, which form a key input into the NAV model. The Company’s valuation assumptions already reflected an expectation that CPS rates would be phased out in the 2030s. In addition, CPS was expected to have a diminishing influence on electricity prices in the longer term as UK renewable generation capacity increases and fossil fuel generators set the marginal price less frequently. The announcement made yesterday accelerates this anticipated trajectory.

Potential impact on NESF

Initial analysis indicates that the removal of CPS in 2028 would have an impact on the electricity price assumptions used in the NAV model, with wholesale power prices estimated to be approximately £4-5/MWh lower from April 2028 to the early 2030s, and around £2-3/MWh lower thereafter.  The impact on solar capture prices will be lower, reflecting the fact that gas does not set prices in all hours when renewables are generating.

The preliminary assessment is that the removal of CPS will potentially reduce the Company’s NAV by 0.8p-1.9p per Ordinary Share.

When will NESF provide more information on this?

The Company’s Investment Adviser is engaging with its power price forecasters to assess their revised assumptions. Further detail will be provided in the Company’s forthcoming Q4 NAV & Operating Update RNS, scheduled for release in mid‑May 2026.

The Renewables Infrastructure Group Limited

The Renewables Infrastructure Group (“TRIG” or “the Company”) is a London-listed renewable energy investment company. TRIG creates shareholder value through a resilient dividend and long-term capital growth, actively managed across both investment and operational disciplines by specialist managers.

Removal of Carbon Price Support

Initial assessment of impact on NAV

The UK Government stated yesterday that it intends to remove the Carbon Price Support (“CPS”) from April 2028. This decision is expected to reduce wholesale electricity prices in Great Britain. The Investment Manager’s initial estimate of the impact on TRIG’s NAV is a reduction of approximately 0.5 pence per share.

The impact for TRIG is expected to be limited as a result of the diversification of TRIG’s portfolio across power markets and revenue sources, the Company’s high percentage of fixed price revenues, and the Investment Manager’s approach of taking an average of three power price forecasters in the portfolio valuation (each of which have assumed a reduction or complete phase out of the CPS). As a result, the majority of the impact of the removal of CPS is already incorporated into TRIG’s NAV as at 31 December 2025. 41% of TRIG’s portfolio is not in the UK. Only 14% of renewable generation revenues over the next 10 years are exposed to GB power prices.

The Investment Manager currently expects the impact on the Company’s NAV to be modest. The estimate remains subject to refinement as updated forecasts are received from the independent power price forecasters.

Greencoat UK Wind

Warns of NAV Impact as Carbon Price Support Set for Removal

Fiona Craig

Greencoat UK Wind (LSE:UKW) has outlined the potential impact of the UK Government’s plan to abolish Carbon Price Support (CPS) from April 2028, a mechanism that currently helps sustain electricity prices when fossil fuel generation sets the market rate.

While the company’s investment manager had already factored in a gradual decline in CPS influence as renewable capacity increases, the confirmed policy change brings forward this transition in the pricing environment.

Preliminary estimates indicate that the removal of CPS could reduce assumed power prices in Greencoat’s valuation models by around £4–5/MWh between 2028 and the early 2030s, and by £2–3/MWh thereafter. This adjustment is expected to lower net asset value by approximately 3–5 pence per share. The company said further detail will be provided in its upcoming first-quarter factsheet.

The outlook remains pressured by recent earnings volatility, including reported losses and zero free cash flow in 2025. Market indicators also suggest a weak trend, with the share price trading below longer-term averages and momentum signals negative. However, these factors are partly offset by a high dividend yield, moderate leverage, and continued positive operating cash flow.