Renewable Infrastructure - Ahead of the Q2 Curve

Research evidence excerpt

Renewable Infrastructure - Ahead of the Q2 Curve

UK | Investment Companies EquityJulyResearch1, 2026

Renewable Infrastructure - Ahead of the Q2

Curve

During Q2, the UK forward curve gave up some of the strength from the

previous quarter. There will be relatively little impact on the NAVs of most

funds though, and still no accrued liabilities to the Electricity Generator Levy

(EGL).

Ahead of the Q2 curve: UK forward power prices moved lower during Q2, eroding some of the

strength seen in Q1 following the U.S.-Iran war. The average price on the forward curve (July

2026 – December 2031) decreased to £72/MWh from £75/MWh at the end of Q1. However,

this masks larger movements at certain points on the curve, with winter 2026/2027 and winter

2027/2028 prices each decreasing by c.£10/MWh.

Exhibit 1 - Q2 movement in UK forward power prices (GBP/MWh)

2026 2026 2026 2027 2027 2027 2027 2027 2027 2028 2028 2028 2028 2028 2028 2029 2029 2029 2029

Jul Sep Nov Jan Mar May Jul Sep Nov Jan Mar May Jul Sep Nov Jan Mar May Jul

UK forward curve as at 30/06/26 UK forward curve as at 31/03/26

.

Source: Bloomberg/Jefferies

NAV impact: As before, the funds are largely fixed/hedged, particularly at the very front end

of the curve, so limiting the overall negative impact to NAVs. UKW is the obvious exception

here, given its merchant revenues, but still with only c.40% of its near-term revenue exposed

to merchant prices by virtue of ROC subsidies, some CfDs, a few fixed price PPAs, and

increasingly some use of hedging. We also note that except for very near-term prices, the

forward curve remains below the Electricity Generator Levy (EGL) benchmark price. Here, we

are also cognisant the levy is based on 'receipts' (i.e. including the impact of capture discounts),