On Thursday, the Chancellor of the Exchequer announced the introduction of a renewable electricity windfall tax.
The new rate of 45% is higher than the Windfall tax set for the oil and gas industry, which will now be 35%. It will be applied on revenues above £75MWh from 1st January until March 2028.
This contrasts with the EU proposal which will be set at €180/MWh and only apply until April 2023 when it is reviewed. Northern Ireland is in a Single Electricity Market with the Republic of Ireland.
Addressing the imbalance, Steven Agnew, RenewableNI Director, said:
“The renewable electricity industry recognises that it must play its part in bringing down consumer bills. Wind and solar generation already deliver the cheapest electricity across these islands.
“In addition, we provide the best solution to net zero energy supply – if you want to decarbonise something, put a plug on it. It seems at odds with the Chancellor also announcing ‘remaining fully committed Glasgow climate pact – including a 68% reduction in emissions by 2030’.
“The Chanceller said we need energy independence. It has been proven that this could be provided with better investment in the renewables sector.
“It is therefore baffling that the Windfall Tax on electricity generation announced by the UK Chancellor today is more punitive than that for oil and gas.
“We are yet to discover whether this will apply in Northern Ireland, but it seems likely that it will. We operate in an all-island electricity market (SEM) and this will put NI generators at a considerable disadvantage to those in ROI.
“We are already developing renewables at a slower rate than is needed to meet our 80% by 2030 renewable electricity target due to a lack of policy support. This measure will further inhibit investment in renewables.”
Following the budget publication, RenewableNI will engage with the Department for the Economy to clarify whether the tax will apply to generators in Northern Ireland.
Further detail is available at: Electricity_generator_levy__technical_note__final.pdf (publishing.service.gov.uk)