windfall tax

Analysts at consultancy LCP Delta have urged energy companies and investors to explore the opportunities presented by announced changes to the Energy Profits Levy (EPL).

“I think we have created skewed distribution,” said Domenico Tripodi, partner at the investment company, AIP Management, speaking at the Renewable Energy Revenues Summit 2023 (RER).

Due to the newly introduced Electricity Generator Levy, current inflation levels and supply chain difficulties, costs in developing low carbon generation projects have increased by between 20% to 30%, with some quoting 50% for specific projects, Energy UK said.

Oil and gas giant BP confirmed it more than doubled its annual profit in 2022 to £23 billion ($27.7 billion), up from the £10.6 billion ($12.8 billion) witnessed in 2021, owing to soaring oil and gas prices.

British multinational oil and gas company Shell recorded its “highest-ever” annual profits in 2022 amounting to £32.2 billion, with only £1.86 billion estimated to be paid via the UK and EU’s windfall taxes for the year.

RenewableUK’s executive director of policy Ana Musat has called on the UK Government to compete with the US Inflation Reduction Act by creating an “attractive policy and regulatory environment” for potential investors and developers.

A poll commissioned by electric utility company, Community Windpower Ltd, showed that 41% of the nationally representative sample of 1,000 UK adults disagreed with the proposed Electricity Generator Levy (EGL).

Should loopholes for tax incentives be removed from the UK government’s windfall tax could generate around £22 billion in additional revenue, research from the New Economics Foundation (NEF) has found.

The Office of National Statistics (ONS) has showcased the impact of the energy bills support measures on public sector borrowing with the October 2022 figure standing at £13.5 billion.

In the latest in our Current± Price Watch article – powered by LCP Enact, we take a look at the new Demand Flexibility Service and the introduction of a windfall tax on electricity generators to support domestic energy bills support.