Extending windfall tax to renewables will jeopardise investment warns RWE boss
Energy firms will reconsider investment plans in the North Sea and the UK’s renewable energy sector, if the country expands its windfall tax to electricity generators, warned RWE chief executive Markus Krebber.
The boss of one of the UK’s largest power producers told The Financial Times the levy will undermine the country’s investment climate.
He said: “If the environment changes — and part of that is of course the regulatory framework and political decisions — everybody would reconsider.”
RWE currently supplies about 15 per cent of the country’s electricity through assets such as gas-fired plants and wind farms, and has pledged to spend £15bn in the UK’s renewable energy sector over the current decade.
Last month, Chancellor Rishi Sunak unveiled the Energy Profits Levy, a further 25 per cent tax on North Sea oil and gas operators.
The Treasury has forecast the tariff will raise £5bn this year, which will partially fund £15bn plans to tame record energy bills for households.
While it currently does not apply to renewables, Chancellor Rishi Sunak slammed electricity generators last month for making “extraordinary profits” due to high power prices.
He revealed the Treasury was examining “appropriate steps” to ensure the sector contributed to support for households facing soaring energy bills.
Krebber suggested Downing Street should look at generators’ profits over a longer period – rather than focusing on present-day gains.
He said: “When I look at our investment in the UK of course sometimes you make a bit more money but we also had periods where we didn’t make literally any money on our asset base in the country.”
RWE’s warning reflects its strained relations with the UK government over recent months.
It is one several energy companies to have angered ministers by delaying the start of a long-term contract for its Triton Knoll wind farm off the Lincolnshire coast – a move that allows it to benefit from higher prices in electricity spot markets.
The practice is legal but is considered exploitative by ministers.