RBC European Utils & Infra Morning Lightbulb

Research evidence excerpt

RBC European Utils & Infra Morning Lightbulb

generation.

The tax was introduced in 2013 to pay down an over €24bn tariff deficit. The tax will be phased out over

18 months – from 1 July 2025 at a 30% discount to the standard rate, rising to a 40% discount in Q4,

dropping to 3.5% from January 2027 and disappearing entirely in 2028. Minister Sara Aagesen estimates

the full removal will reduce consumer electricity bills by c.6%. The move follows Portugal's elimination

of its equivalent mechanism in January 2026 and years of pressure from companies which argued the

tax reduced competitiveness versus European peers and was linked to a tariff debt now nearly fully

amortised. (El Pais)

So what? The elimination of the 7% generation tax has a positive impact for supply position of the

integrated utilities (~€40m quarterly positive impact for Iberdrola and Endesa) until the new pricing

is assumed in the contracts. The elimination also improves the competitive position of the Spanish

electricity generation for cross border trade. The move follows the elimination of the Portuguese

clawback in Dec-25 and the elimination of the Spanish generation tax is slightly negative for EDP which

now benefits from the elimination of the Portuguese clawback on the Spanish generation taxes.

US Government refunds Duke offshore wind lease

The Trump administration is cancelling a lease held by Duke Energy Corp. off the coast of North Carolina

as it expands its campaign to block new offshore wind developments. Under an agreement with the

Interior Department, Duke will voluntarily terminate its lease valued at $129m and invest the same

amount in additional generating capacity. Duke aims to invest the refunded money in projects such as