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Highlights
- The plan to levy a windfall tax on oil companies operating in the North Sea has been rejected by business secretary Kwasi Kwarteng.
- Kwarteng has announced that higher investments would be made in renewable energy sources to strengthen the UK’s energy security.
Ahead of the landmark energy security plans to be published by the UK government, business secretary Kwasi Kwarteng has rejected the plan to levy a windfall tax on oil companies operating in the North Sea. The windfall tax was aimed to pay for the discounted energy bills, and Labour was in support of the move as it would have eased the burden on households’ budgets.
Kwarteng believes that the windfall tax would negatively impact jobs, hurt the overall investment, penalise people who have a pension invested in these businesses, and create further unpredictability in the oil markets.
The UK households have been dealing with soaring energy bills, and on 1 April, the energy price cap is due to jump by £693 and touch £1,971. By the next energy price cap hike due in October, the prices are expected to go up to £3,000. Rishi Sunak’s recent Spring Statement has also been criticised due to its insufficient measures to deal with the ongoing cost-of-living crisis in the UK.
RELATED READ: Spring Statement and Measures for UK Households Explained
Meanwhile, Kwarteng has also announced that higher investments would be made in renewable energy sources with an aim to lessen the dependence of the UK on Russian oil and gas. By 2030, the UK Government strives to increase onshore wind and nuclear power by two times, raise the number of solar panels by three times, and expand offshore wind power by four times. This would help in lowering the energy bills of UK households while strengthening the energy security of the country. Reportedly, Kwarteng said that energy independence for the UK had become a concern of national security.
Here are 2 UK renewable energy stocks which investors can keep an eye on.
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Greencoat UK Wind plc (LON: UKW)
Leading renewable infrastructure fund, Greencoat UK Wind plc, is engaged in the operation of wind farms in the UK.
In 2021, sustainable electricity worth 2,933GWh was generated via the investments made by the group.
With a market cap of £3,179.07 million, Greencoat UK Wind plc’s shares were trading at GBX 150.40, up by 0.67%, at 11:28 AM (GMT +1) on 30 March 2022. The FTSE 250 company has provided a return of 17.44% over the last one year and 7.08% on a year-to-date basis to its shareholders as of 30 March 2022.
RELATED READ: BP & Diversified Energy: Should you hold these energy stocks?
The Renewables Infrastructure Group (LON: TRIG)
UK-based investment trust, The Renewables Infrastructure Group, basically makes investments in the assets that help in renewable power generation.
On 24 March, the group declared that it had raised £277.3 million through a PrimaryBid offer.
With a market cap of £3,294.88 million, Renewables Infrastructure Group’s shares were trading at GBX 133.60, up by 0.45%, at 11:32 AM (GMT +1) on 30 March 2022. The FTSE 250 company has provided a return of 10.41% over the last one year and 0.60% on a year-to-date basis to its shareholders as of 30 March 2022.
Note: The above content constitutes a very preliminary observation or view based on industry trends and is of limited scope without any in-depth fundamental valuation or technical analysis. Any interest in stocks or sectors should be thoroughly evaluated taking into consideration the associated risks.
