Greencoat UK Wind has warned that the government’s decision to scrap Carbon Price Support from April 2028 could knock 3 to 5 pence per share off its net asset value.
The company said initial analysis by its investment manager suggests the policy change would reduce electricity price assumptions by roughly £4–5/MWh from April 2028 through to the early 2030s, tapering to £2–3/MWh thereafter.
CPS is a tax on fossil fuels used in power generation, designed to top up the UK Emissions Trading Scheme price by £18 per tonne of CO₂. It feeds into wholesale electricity prices whenever a gas plant is setting the marginal price, which is where wind generators like Greencoat ultimately derive their revenue.
The impact is somewhat cushioned by the fact that the investment manager’s existing valuation assumptions had already anticipated a significant reduction in CPS rates over time.
Greencoat said it would publish further details in its Q1 factsheet, expected on 27 April.
Greencoat UK Wind is currently trading at around a 22% discount to NAV.