Greencoat Uk Wind Share Discussion Threads

[tuftymatt] 17/10/2022 12:26

I think he will try to control the whole windfall tax side of things in a much more realistic way.
No doubt huge profits will lead to a bit more going to the Government but it has to be managed in a way that allows sensible levels of shareholder returns and investment.

[bodgeman] 17/10/2022 11:59

Hunt has announced a new TREASURY lead review of the energy market. I would imagine that would be more sensible than JRmogg review. Hopefully a more pragmatic approach that will be more green friendly forward looking.

[coxsmn] 15/10/2022 16:23

You need to look what the EU is doing and what we plan to replicate i.e. cap on renewable energy producershttps://renews.biz/80831/eu-ministers-agree-renewables-revenue-cap/

[edwardt] 14/10/2022 13:11

Totally agree

[marktime1231] 13/10/2022 13:05

How could the UK operate a significantly different price cap system to our European neighbours? Even if CPRL is a temporary emergency measure an import-export price gap could set up an energy trading nightmare. We are grid-connected to Norway, Ireland, Netherlands, Belgium and France, building a link to Denmark.

[donald pond] 13/10/2022 10:11

IIRC less than 18 months ago Afry, the power price predictors used by most funds, were predicting power would be sold for around £50 increasing by 2% a year for the foreseeable future. As with most, they just extrapolate long term trends and get caught out by black swans. But that power prices could be fixed at double recent assumptions suggests to me things are OK. The other issue of course is gilt rates: what is a reasonable rate of return for a renewable or infrastructure fund when gilts yield 5%?

[nerja] 13/10/2022 09:11

Jonwig yes but at least the ones that are installed already would be on for a reasonable return

[jonwig] 13/10/2022 08:53

nerja the EU's price cap is €180/kWh. A lower UK one would see investment migrate.

[nerja] 13/10/2022 08:40

Not in this yet but this worth a read

hxxps://citywire.com/investment-trust-insider/news/government-says-renewable-price-cap-not-a-windfall-tax-funds-selloff-may-be-over/a2399655?re=101920&refea=1488120

efferies’ investment companies analyst Matthew Hose said the statement implied a price cap of between £100 to £160/MWh, or at least the double the level indicated in weekend newspaper reports. ‘If the former was used for the cap this would limit downside to NAVs of no more than 5%, while the latter would result in little or no downside given that the funds’ 2023 forecasts are almost entirely below this level.

‘For example, UKW has a 2023 valuation assumption of c.£110/MWh before PPA [power purchase agreement discounts],’ Hose told investors.

[grim] 12/10/2022 19:28

re 632: Get onto your MP about that solution

[grim] 12/10/2022 19:28

re 632: Get onto your MP about that solution

[marktime1231] 12/10/2022 12:27

Oh lordy ...

"The precise mechanics of the temporary Cost-Plus Revenue Limit will be subject to a consultation to be launched shortly. The government has been working closely with industry on the detail of the proposal, ahead of it coming into force from the start of 2023. It will ensure consumers pay a fair price for low carbon energy and has the potential to save billions of pounds for British billpayers, while allowing generators to cover their costs, plus receive an appropriate revenue."

How can you introduce legislation without being able to say what it is!

Government cost-plus contracting in the 1970's and 1980's style making an ugly comeback? Define an "appropriate" revenue go on why don't you. Appalling.

So this is not a windfall tax, presumably because Truss is on record that she is agin it. This is legislation which would rip up existing lawful long-term contractual agreements. Things which even parliament cannot change without full compensation. Not even by calling it emergency and temporary.

The better solution was also mentioned ...

"We are also legislating for powers that would allow us to consider running a voluntary Contracts for Difference process for existing generators to take place in 2023. A voluntary contract would grant generators longer-term revenue certainty and safeguard consumers from further price rises."

So run an AR5 CfD process to novate old contracts, that would set prices with which all voluntary participants agree but minimised by fair commercial auction. Let the market decide.

[vworlds_cambridge] 12/10/2022 09:49

I guess we'll need to see the details, but what grates for me is the potentially much worse treatment of renewables trusts compared to the oil and gas sector. I'm okay with some kind of unit price cap in principle, but I wonder if it will be ridiculously low. In any case, this is the last UK share for me from now on.

[jimmywilson612] 12/10/2022 09:38

well it still provides income so if that's your main goal I wouldn't worry about the movement of the share price, so long as you're happy with the yield you get upon buying.

[c3479z] 12/10/2022 09:32

thought this might represent a safe investment to provide income now I'm retired until the goalposts have been moved; where were the politicians 2 years ago when the price of oil was below 20$ a barrel- seems there was no windfall help for power generators at that time....

[marktime1231] 11/10/2022 13:25

Yes well observed. That is almost like saying a 25% windfall tax for the next 3 years would be preferable? And yet in three years' time I would rather UKW was enjoying the remaining 12 years of a contract at AR4++ prices.

What leverage does UKW have to stop being bullied in to a low deal. Can't go on strike. Public sympathy, not really. Undermining future investment, well that is more an argument for those with strategic projects like SSE and EDF but it might sway some MPs. I would say the option for UKW was taking action in the courts because even a government is not allowed to rip up contracts without paying proper compensation. It would be easy for UKW to demonstrate what has been taken away.

Who is doing the bullying here, Truss because of a presumed antipathy to renewable energy, or Kweasy because he is desperate for quick billions, or Rees-Mogg because he is Rees-Mogg?

Unfortunately Chris Skidmore who might have brokered a reasonable win-win deal without all the fuss has been sidelined.

[vworlds_cambridge] 11/10/2022 12:58

Well, hopefully the government are playing hardball in the hope of forcing a negotiated deal. In the absence of that, would it be subject to a vote in parliament (and then maybe court action), or straight to the courts?

I'm sure this won't be taken lying down, and (a) the impact should not be worse than for the oil/gas companies (after all, the cost of extracting the oil/gas hasn't increased for them either), and (b) there should be a premium to account for the fact that existing contracts are being ditched.

However, it seems this government is "closer" to the oil/gas companies, than the renewables...

[cc2014] 11/10/2022 12:54

#624 Your position assumes the government will apply the same well-thought our reasoning that you have.

That's how it used to work before Trussonomics. It's all changed now. Trussonomics is given tax increases away which are far less than the cost of increased mortage payments which occur as a consequence and then don't back down when the market tells you it's not a good idea.

[marktime1231] 11/10/2022 12:38

A pity the participants in this negotiation are at loggerheads.

AR4 struck in 2022 at £37.35 for offshore wind (as at 2012) was a significant reduction on previous rounds, reflecting much more efficient technology and scale and lower risk. If that was the government level of offer to novate old style ROC agreements it was understandably rejected, because at current market prices (c. £450/MWh across winter 22/23) the uncapped generators can earn ten years' revenue in one to two years. AR2 struck in 2017 was £57.50 (2012) for Hornsea 2.

Press guessing that the offer on the table, in danger of becoming a cap if the government imposes it with legislation, in the region £50-60/MWh at today's prices would be a discount on historic price agreements. So why would UKW accept that voluntarily or otherwise? This might end up in the courts.

Yes I know UKW is mostly onshore wind. AR4 struck onshore wind at £42.47 (2012) which is £54-55 in today's prices. So the government is offering no premium at all for the lost opportunity. Are its hands tied, would all AR4 contracts need to be upgraded if they went above the AR4 deal?

For reference the recently capped UK domestic energy tariff is the equivalent of £353.1/MWh. Considerable headroom. If the government are free to make a better offer why don't they just do that?

[rolo7] 11/10/2022 07:54

On London's equity markets, Centrica was down 2.68% and Drax Group lost 4.91% after reports that ministers were pushing ahead with plans to cap prices at renewable energy generators, after talks failed to persuade them to voluntarily fix contracts well below the current wholesale rates.

[growthpotential] 10/10/2022 18:54

Seriously man, wtf happened to this

[yump] 10/10/2022 14:19

Income really as not cashing in, but the capital gain is a nice cushion. Am using isa’s as alternative to annuities, so capital can be used if needed, but temporary large capital drops were not in my plans !

[kaffee] 10/10/2022 12:56

yump10 Oct '22 - 12:22 - 618 of 619


Plenty of fat in the div cover to help insulate you from Income drop if the company so wishes - or is it actually wealth drop you are bothered about ?

[jonwig] 10/10/2022 12:29

New subsidies ceased in 2017, but existing ones continue to 2037. The new CFD schemes don't permit excessive profits.

The government will need to legislate to make this cap, and I doubt it would get through parliament. (No windfall on O&G, but a windfall on renewables!!)

The EU is proposing a cap, but it's €180/kWH which is manageable. UK companies are already threatening to stop new investment in the UK and move to the EU. (Some such as FSFL already have EU operations.)

How this government can even contemplate such a move is beyond me, but they've already surpassed themselves so often.