Windfall tax on renwables

[Mr Gus]

Do you reckon they are going to employ smoke & mirrors & tax us small investors to the same degree as the big boys ...& kill community renewables via a tax bullet to the head & a "dont mess with the big boy energy providers" !note on the corpse!?

Would have hoped to see Octopus & Co-op making noisy, media waves, but I haven't.

[Oldgreybeard]

The real issue is that electricity pricing is determined by the price of generating using gas, so every non-gas generator is making a LOT of money for no additional effort or cost. It would be far better to restructure the pricing mechanism to redress that imbalance, especially as gas only makes up around 38% of our total generation.

Windfall taxes sound OK at face value, but they are a sticking plaster and don't address the real problem. I see no reason why wind or solar, at any scale, should be treated any differently to any non-gas generator, TBH. The costs of running wind or solar farms has only risen by a small amount, yet their income has risen dramatically, because of the linkage with the costs of gas fired generation. What's needed is a fairer way to pay all generators, so they earn a fair profit for their investment, but don't earn a disproportionately large profit off the back of the price of gas rising.

[smegal]

!Meanwhile, electricity generators will only have to pay the 45% levy on “extraordinary profits,” defined as electricity sold above £75MWh - that’s 1.5 times higher than the average electricity price over the past decade.

The Treasury does not believe this will harm investment as it will only apply to “a portion of excess profits” and generators can still write off investments against corporation tax. The levy will also not apply to electricity sold under the contract for difference (CfD) scheme."

https://moneyweek.com/economy/uk-econom ... dium=email

I'd assume that excludes any subsidies such as ROC or FiT etc.

[Mr Gus]

& he's gone & stuck wind & solar on the full tax rate.

Therefore the previous statement received as "not likely intended for this type / degree of energy production" (elsewhere on Camelot for the exact phraseology) was utter 011ocks & the usual denial build up prior to the stitch up.

Scumbag liar politicians! ..opportunities as OGB mentioned of "decent & fair" reform "gone"
& all the cr@p that now comes with it.

Dodgy Jeremy C
From the gruniardian:
"However, the energy profits levy has been criticised as it does not extend to the excess cash generated by oil and gas giants’ trading, refining and forecourts divisions. Hunt did not alter the levy to reach these windfalls"

https://www.theguardian.com/business/20 ... generators

It isnt like ripple & other cooperative schemes are the regular producers.
(Rely on nowty & joe to report on Facebook ripple group melt-downs in light of this)

[Oldgreybeard]

Whilst I agree that treating the oil companies differently is just plain wrong, the principle of any company, of any size, making massive additional profit for zero extra work or investment, because of accidental factors completely outside their control and set by government regulation also seems wrong.

To give a daft example, say I set up a roadside stall, growing flowers and selling them for a fair profit of 20%. Lets say that the price I sell for is now fixed by law with a linkage to the price of petrol, my costs are fixed by the cost of production so don't change much. The price of petrol rises by 50%, but the cost of flower production doesn't change, so my profits rise by 50%. Is that fair?

This is pretty much what happens with all generators that sell electricity that isn't generated by gas. The cost of gas goes up by 200%, so the profits of all non-gas generators goes up by 200%. It's simply a crazy pricing model, that has been overtaken by world events so isn't now fair for anyone, least of all consumers. Consumers are paying the likes of Ripple massive amount more than was expected, and much of that money is coming from people that can least afford it.

[Joeboy]

In from Ripple,

You may have seen the Government today announced a windfall tax on low carbon generators.

The tax will only apply to projects generating more than 100,000MWh per year. Both Graig Fatha and Kirk Hill are well within this limit, so we do not expect it to impact members' savings.

This is really good news! It shows the Government listened to the concerns raised over the potential impact on smaller scale and community owned projects. Thank you again to everyone who wrote to their MPs. It is really appreciated and undoubtedly helped raise the profile of the issue.

We will send an email out to Graig Fatha and Kirk Hill members later today, but wanted to flag the good news quickly here.

You can read more detail on the exemption in section 1.22 in the Treasury technical note here.

Sarah

[Mr Gus]

in reply to OGB
That's where a cooperative can talk, & if in agreement buck a record high price trend with a different set up (with the agreement of the energy buying company, who if wishing to appear / redefine costs could smooth out costs from one end to the other ..& possibly set in motion more energy change adding strength to small investment as clean & community minded.

Put me down for price smoothing & "in this together" instead of a damaging tax.
..But we'd be harder to control if we took on that attitude right!?

[nowty]

With regards the 100,000 MWh annual limit, for reference WT1 Graig Fatha is 6,681 MWh's and WT2 Kirk Hill is 60,266 MWh's.

Lets hope project 3 is not too much bigger than WT2.

[Mr Gus]

I do hope David & "ooh-nooh" 's solar farm is under the new limit. What with pips marital breakdown, & wee bens dalliance without wearing rubber boots, ...a farmer *should* know better than to ever go without protective clothing, ..this is the last thing they need**


**Ambridge, levity, coat.

[nowty]

I'd assume that excludes any subsidies such as ROC or FiT etc.

FITs and CFD have already been specifically excluded by the primary legislation. ROC's have not and are in fact the main target of the windfall tax.

EDIT - Sale of ROC (the certificates) are also excluded (in the technical note), but I think the older generators on ROCs get their per MWh revenue based on gas generation price so they are caught.

There is also a £10m allowance, I am guessing this is in case the 100 GWh annual limit is busted a bit because its a windy year.