Report Q4 2022 Revenue Forecast Updates

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Report Q4 2022 Revenue Forecast Updates

4 minutes
January 30, 2023 9:18 pm

The Q4 2022 release of the EDHECinfra indices presents our updated views in the light of recent government intervention in the European and UK energy market due to the ongoing gas supply disruption. This report updates the Q3 2022 report and is presented following the TICCS® taxonomy of infrastructure companies.

Over the course of the fourth quarter of 2022, European countries and the UK experienced a mild winter. Aided by long queues of LNG tankers, this has allowed gas storage to return to its peak, which is more than adequate for energy production in the coming months.  The TTF price dropped back to EUR76.0 MWh in December, helping to ease the energy crisis.

However, it will be challenging for these countries to meet their storage targets by October 2023. According to IEA (2022), there will be a 27 billion cubic meters gap in the supply-demand if the Russian gas supply reaches nil and LNG demand by China return to 2021 levels.

Countries and companies have implemented various contingencies. For example, Germany has increased the sourcing of gas import from its neighbouring countries. Norway supplied 37.6% of Germany’s gas in September, nearly double the previous month’s 19.2%. Energy companies, including RWE AG, recently secured a 15-year supply contract for 2.25 million metric tons of LNG annually.

We are still watching for future developments and implementations by the various government to cope with these supply issues. As of today, it is uncertain how the gas prices will evolve, and these will be contingent on several key factors: China’s demand for LNG, Russia’s supply decision, and how soon the EU and the UK are able to locate an alternate gas suppliers with adequate supply.

The latest updates are summarised in the table below:

Region Government interventions
Europe 1)      Temporary revenue cap at EUR180/MWh on lower margin electricity generators in effect from 31 March 2023 until 31 March 2023. Revenue above the cap would be retained by the local government (European Commission, 2022).


The threshold does not apply to contracted energy companies which are primarily represented by EDHECinfra-tracked constituents drawing fixed prices below the cap.


2)      Temporary windfall tax on excess profits generated from activities in the oil, gas, coal and refinery sectors. Some European countries have included energy companies in this.


Measures Commentary
Germany – the levy will be applied to income above EUR130/MWh. Energy sold under PPA contracts will be exempted (BloombergTax, 2022).


Not applicable as our constituents are predominantly based on the contracted business models.
France – plans to implement a levy on electricity income generated by nuclear and renewable power producers above EUR100/MWh (Reuters, 2022).


Not applicable as our constituents are predominantly based on the contracted business model, with fixed PPA price below the cap.
Netherlands – 33% tax rate on any excess profits that are more than 20% above the average level of profits earned during the period 2018-2021 (Reuters, 2022).


No adjustment will be applied as no constituent tracked by EDHECinfra belongs to this category.
Italy – plans to apply 50% one-off windfall tax on excess profit (above 10% increase of the average taxable profits made by energy companies reported between 2018-2021; Bloomberg, 2022).


We noted a few constituents fall into this category. A profit factor adjustment will be applied considering the temporary tax impact. However, the adjustment will only occur after local governments have sanctioned the rule.
Spain – levied on large energy companies (turnover more than EUR1 billion as of 2019).


Not applicable as the rule is applied to the corporate level, not at the asset level.
Norway – charges a tax rate of 23%, “high-price contribution” to income above EUR65/MWh. It applies to both wind farms and hydropower companies in Norway (Norwegian Ministry of Finance, 2022). Not applicable as our constituents are predominantly based on the contracted business model, with a fixed PPA price below the cap.


The list above is not exhaustive; other European countries not currently tracked by EDHECinfra are not included.


The UK An Energy Profits Levy of 45% will be charged to low-cost energy producers. which will take effect from January 2023 – March 2028. It applies to wholesale electricity sold above GBP75/MWh. The levy is limited to the corporate level with a large portfolio of in-scope energy assets that generate electricity output of more than 50GWh per year. Energy companies with Contract for Difference (CfD) will be exempted from this rule (UK HM Revenue & Customs (2022).


Not applicable to EDHECinfra constituents as they generate electricity under CfD contracts.


As highlighted in our last report, we do not see the need to apply adjustments to our ‘lower margin’ energy constituents. They are not deriving abnormal profits from the recent hike and derive revenue from long-term fixed rate contracts (i.e. CfD, FIT and PPAs) with prices already set below the current spot prices.

Pexapark (2022), which provides PPA EU composite index, has highlighted the 10-Year PPA index prices were in the range of EUR48.4–113.0/MWh in their recent December report. This range is below the threshold set out by the European Commission.

Regarding the windfall levy, we have reviewed our EU constituents and found that our Italian wind farms and solar are affected by the regulation, which we will adjust by applying the 50% tax impact when we are certain that local governments will implement the rule. For the UK, the windfall tax does not apply to our constituents.

The information about the government interventions published in this update is based on publicly available information. It should be taken as a guide and does not constitute the provision of advice.


BloombergTax (2022). Germany Expects About $10 Billion From Energy Windfall Levy. Available here:

Bloomberg (2022). Italy Prepares 50% Windfall Tax on Energy Firms’ Excess Gains. Available here:

European Commission (2022). Energy prices: Commission proposes emergency market intervention to reduce bills for Europeans Available here:

IEA (2022) How the European Union can avoid natural gas shortages in 2023. Available here:

Norwegian Ministry of Finance (2022) High-price contribution on wind and hydropower. Available here:

Reuters (2022). Factbox: Windfall tax mechanisms on energy companies across Europe. Available here:,3.2%20billion%20euros%20from%20it.

UK HM Revenue & Customs (2022). Policy paper: Electricity Generator Levy on exceptional electricity generation receipts. Available here:

Pexapark (2022). PPA Times: Monthly PPA News Digest (December 2022). Available here: