Renewables Infrastructure Group sees only 'modest' impact from government's carbon tax removal

(Sharecast News) - London-listed renewable energy investment company, The Renewables Infrastructure Group, has estimated that the government's decision to remove the Carbon Price Support (CPS) in two years would only have a "modest" impact on the business.

The government on Thursday said it would scrap the carbon tax on electricity generation from April 2028 in an effort to reduce wholesale electricity prices across Britain as commodity markets remain in turmoil amid conflict across the Middle East.

The CPS, introduced in 2013 to incentivise the transition to low carbon generation, has been set at �18/tonne of CO2 since 2015/16, adding around �3 to �6 per MWh to wholesale power prices in periods during which gasfired generation sets the price of electricity in the GB market, according to TRIG. The impact on wind and solar capture prices is lower.

TRIG has said that removing the CPS will lower its net asset value by 0.5p per share. That represents just a 0.48% reduction compared with the NAV per share of 104.0p at the end of 2025.

The company said its power price forecasters have already assumed that the CPS would either be removed or reduced over time. "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," it said.

The company also benefits from diversification across power markets and geographies, with 41% of its portfolio not in the UK, while just 14% of its renewable generation revenues over the next 10 years are exposed to GB power prices.

"The [investment] manager is in discussion with TRIG's power price forecasters to understand their revised assumptions in light of this decision and refine this analysis further," TRIG said in a statement.

TRIG shares were down 1.9% at 66.5p by 1305 BST.

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