A story in today’s Financial Times seems to have triggered a slide in the share prices of a number of renewable energy companies. Rishi Sunak is said to be exploring the possibility of a windfall tax on all energy generating companies, including those in the renewable energy sector, as well as oil and gas companies.
Having categorically ruled out a windfall tax only a couple of months ago, and rejected a Labour motion to implement a windfall tax on oil and gas companies only a week ago, the U-turn may be a cynical ploy to distract from other news. However, the inclusion of renewable energy funds within the scope could be a way of whipping up opposition to the idea to have it ruled out.
The argument is that a windfall tax would deter much needed investment in renewable energy infrastructure.
All this is still speculation. Some funds have been hit harder than others. As I write this, Greencoat UK Wind’s shares are off 5.5%, The Renewables Infrastructure Group’s shares are off 2.1%, JLEN Environmental is off 2.7%, and Foresight Solar shares are off 1.6%. By contrast, Greencoat Renewables, which invests in Europe outside the UK, is unchanged.
Renewable energy funds hit by windfall tax rumour