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Representatives of the renewable energy sector are pressing for changes ahead of this week's budget. They say that a cap on revenue and a lack of incentives offered to oil explorers are blocking the development of renewable energy in Britain.
The government has set goals to increase wind generation and become independent of imported energy following the Russian invasion of Ukraine, but could miss these targets without policy changes. Other countries being more willing to attract such investment brings about an urgency for these new standards.
One controversial issue is the Electricity Generator Levy (EGL), which the UK introduced from this year as a means to combat high energy prices. Industry leaders call it a "de facto windfall tax.”
Rob Wood - manager at wind energy developer Community Wind Power - is asking for changes come budget day on March 15th.
"The taxation (EGL) is going to kibosh renewable targets the UK has set," Wood said, adding that his company's 1.2 GW in projects will be forced to halt development by 2025 if nothing is done - resulting in major power shortages for more than a million homes in Scotland who rely on them.
Moreover, he argues that without tax changes he will have no choice but divert his business operations into markets like America due to their significantly greater stimulus packages for clean technology investments - totalling $370 billion from President Joe Biden's Inflation Reduction Act last year.
Similarly, Denmark's Orsted says its Hornsea 3 project may need to be paused due to rising costs; with 3 GW capacity once built, it would stand as the world's largest wind farm.
Meanwhile, Vattenfall director Anderson is calling on upon Budget Day support through capital allowances in order for their Norfolk Offshore Wind Zone project to stay afloat amidst inflation and interest rate rises alongside EGL levels being too low when wholesales electricity prices hit 120 pounds/MWh: “We must show our support for the sector in next week’s budget," Anderson added.
Addressing Europe-wide issues, discussions revolve around putting revenue caps on electricity companies; requiring them every time they selling non-gas processed power over 180 euros ($190)/MWh so that excess funds are given back to national governments - thus creating an even playing field between renewables and their rivals crude oil production sites.
All eyes are now focused on this week's budgetary meeting where representatives from both sides can present their needs; only then will it become clear whether clean sectors get adequate support or whether investors like Wood have little else but removal vans left at their disposal as another failed bid for justice comes about.
By Michael Kern for Oilprice.com
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Michael Kern is a newswriter and editor at Safehaven.com and Oilprice.com,