The British government’s de facto windfall tax for low carbon electricity firms has come under fire recently, with energy companies warning that the initiative will result in “catastrophic consequences” for green technology investments like solar and wind facilities.
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The trade body representing several major companies including EDF Energy, Centrica, SSE and ScottishPower, Energy UK recently voiced criticism regarding the government’s plan to place a revenue cap on the country’s low carbon electricity generators.
The policy was confirmed by the government under Liz Truss and was designed to raise funds for the UK government’s dedicated energy bills support scheme for British households and could potentially continue until the close of 2027. It is included as part of an energy prices bill that has raised controversy and is still making progress through parliament. However, UK ministers have yet to confirm the cap’s level.
The cap applies to enterprises that hold low carbon assets for electricity generation like solar and wind farms, as well as biomass and nuclear power plants. Despite benefiting from the spike in wholesale power prices in the wake of Russia’s invasion of Ukraine, gas-fired power plants remain excluded from the cap.
Energy UK has now sent a briefing to MPs ahead of the chancellor’s upcoming fiscal statement.
