Octopus Renewables Infrastructure Trust (LSE:ORIT) says the UK Government’s decision to legislate to remove Carbon Price Support (CPS) from April 2028 will have only a marginal effect on the group's valuation.
"Impact of Carbon Price Support removal estimated to be less than 0.5p per share", the company said.
The trust’s initial analysis, supported by the external consultants that supply its power price forecasts, estimates the removal will cut the forecast electricity price captured by its unhedged UK assets by roughly £2-3/MWh from April 2028, declining thereafter. Management says the hit is small because a large portion of revenues is fixed and the portfolio is geographically diversified.
Octopus added that it had already baked a diminishing role for CPS into its valuation assumptions as renewables gain market share.
On wider policy, the trust says the increase in the Electricity Generator Levy from 45% to 55% is not expected to be material, while the proposed voluntary long-term fixed-price contracts for existing low‑carbon generators "may provide an opportunity to secure additional long-term fixed revenues".
The Investment Manager will continue to monitor developments and update the market if material valuation impacts emerge, it said.
