UKW, TRIG, DORE: Renewable Energy stocks to watch amid electricity market reforms

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 UKW, TRIG, DORE: Renewable Energy stocks to watch amid electricity market reforms
Image source: Hryshchyshen Serhii,shutterstock.com

Highlights 

  • The UK Government has launched a review into the structure of the country’s electricity market.
  • The major changes proposed will cut energy bills, boost up energy security, and create a greener and cleaner energy system.
  • The proposed consultation will support in modifying the current pricing system based on gas prices.

The UK Government launched a review into the structure of the country’s electricity market on Monday with the aim of drastically boosting energy security and slashing electricity costs for users in the long run. The major changes proposed by the Government would help in the reduction of the skyrocketing energy bills, which have been hurting Brits amid the escalating cost-of-living crisis.

The Review of Electricity Market Arrangements (REMA) will try to find and understand different options to tackle the ongoing energy-related challenges. Some of the alterations consulted under the review consist of the introduction of incentives for users to get cheaper energy from the grid in case of high production or low demand, capacity market reforms to boost the use of technologies with low carbon flexibility and decoupling cheaper renewable energy from the overpriced fossil fuels.

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Under the present system, wholesale electricity prices are determined mainly by gas prices. But, as the cheaper renewable alternatives will become more popular, they will end up having a higher impact on the wholesale prices and drag them down. The proposed consultation would support modifying the current pricing system and reducing the overall energy costs while increasing the usage of cheaper and cleaner electricity.

With the expectations of the energy demand doubling by 2035, these changes will play an important role in keeping the energy market on track and helping households to tackle the rising bills. As renewable energy is gaining considerable importance, UK investors can keep an eye on the following renewable energy stocks with bright prospects.

 Greencoat UK Wind plc (LON: UKW)

Greencoat UK Wind plc is a special manager which gives exposure to the investors to the wind energy and other renewable energy sectors. The FTSE 250 index boasts a market cap of £3,577.99 million as of 19 July. With a positive EPS of 0.18, Greencoat is offering investors an annual dividend yield of 4.7%. As of 19 July, the company’s one-year and YTD returns lie in the positive zone, at 15.99% and 9.89%, respectively. UKW shares were trading at GBX 154.40 as the market opened at around 8:00 AM (GMT+1) on Tuesday.

The Renewables Infrastructure Group (LON: TRIG)

The Renewables Infrastructure Group falls under the FTSE 250 index and holds a market cap of £3,349.35 million as of 19 July. With a positive EPS of 0.10, Renewables Infrastructure Group is offering investors an annual dividend yield of 5.0%. On Tuesday, the company’s one-year and YTD returns stood at 6.39% and 0.37%, respectively. TRIG shares were trading at GBX 134.80, down by 0.15%, at 8:10 AM (GMT+1) on Tuesday.

Downing Renewables & Infrastructure Trust plc (LON: DORE)

Downing Renewables & Infrastructure Trust plc is a trust investing in wind, solar, hydro, and other renewable energy assets. The company holds a market cap of £205.85 million as of 19 July. Downing Renewables & Infrastructure Trust is offering investors an annual dividend yield of 3.2%. As of 19 July, the company’s one-year and YTD returns lie in the positive zone, at 13.33% and 7.56%, respectively. TRIG shares were trading at GBX 111.50 at 8:15 AM (GMT+1) on Tuesday.

 

 

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