Politics
David Turver is an engineer by training who has spent much of his career as a consultant implementing large-scale technology programs and company mergers. He is known as an energy policy analyst and author of the newsletter "Eigen Values," where he writes extensively about UK energy policy, renewables, and government approaches to Net Zero and climate change.
David has recently published an article analysing the political risks and potential financial consequences for the UK renewables sector—especially offshore and onshore wind operators—if Conservative and Reform Party energy proposals to roll back Net Zero commitments are enacted. Given that we have Senedd elections scheduled for May 2026, this is particularly important for projects in Wales
Political and Policy Context
Both parties propose dismantling key climate and renewables mechanisms: repealing the Climate Change Act, abolishing the Climate Change Committee, axing carbon taxes on gas-generated electricity, and ending the Renewables Obligation Certificate (ROC) scheme. Turver notes these moves could cut consumer bills by roughly £10 billion annually but create significant financial losses for renewable energy investors and projects reliant on carbon-related subsidies and revenue streams.
Effects of Ending ROC and Carbon Costs
ROCs currently funnel about £7.5 billion a year to renewable generators, with major beneficiaries including onshore wind (£1.7 billion), offshore wind (£1.4 billion), and biomass (£1.4 billion). Eliminating ROCs and cutting carbon costs (which make up around one-third of wholesale power prices) would sharply reduce generator incomes. Wind farms selling power at discounts to market rates would see realised prices plummet accordingly.
Financial Exposure and Debt Risks
David highlights exposure among major investment vehicles such as TRIG, Greencoat UK Wind, ORIT, RWE, and Ecotricity — most carry high debt ratios tied to ROC-supported assets. Using a 100 MW model offshore wind farm, Turver estimates that removing carbon costs cuts asset value (GAV) by 21%. And removing ROCs cuts GAV by 77%.
Removing both leaves virtually no net asset value, turning equity negative.
CfD-Funded and Merchant Windfarms
For Contracts for Difference (CfD) generators, reduced carbon costs lower wholesale prices but trigger higher subsidy payments to meet strike prices. However, reduced curtailment compensation and lower merchant prices affect projects such as Hornsea 2, Moray East, Seagreen, and Moray West, many of which are burdened with multi‑billion‑pound debts.
Turver argues that with revenue dropping to around £56/MWh strike prices, several may struggle to service loans or return dividends to their investors. Merchant-only wind operators would also face around a one‑third revenue cut.
Conclusion
Turver concludes that UK renewables—especially those highly leveraged through ROCs or expecting high merchant prices—face a looming valuation crisis if political reforms advance. He predicts possible bankruptcies or early decommissioning and cautions financiers to deleverage urgently. The article finishes by urging voters to lobby MPs to pressure Energy Secretary Ed Miliband to cancel the current Allocation Round 7 (AR7) auctions, to avoid compounding sectoral instability.
Here's a link to the full article: https://davidturver.substack.com/p/offshore-wind-bankers-beware?r=510bng&utm_medium=ios&fbclid=IwY2xjawNz-_RleHRuA2FlbQIxMQBicmlkETBBV3BwSmE5MXA2eTVYbERGAR6Ii_wENqKOacOzLIIZgClnxF0fJUPMYmmHDaKu5eJOlUCPK9_WytDtuZN_eg_aem_JM6IQBOM-gQWA_u50DqN4A&triedRedirect=true
