Windfall tax faces lawsuit.

A UK developer of onshore wind farms is threatening the government with legal action unless it scraps or amends a new windfall tax on low-carbon electricity generators that will help subsidise household energy bills. The Cheshire-based company is the first low-carbon electricity generator to threaten legal action against the government’s planned levy. The levy is intended to capture some of the «exceptional» revenues that low-carbon power generators have been making as wholesale electricity prices, which closely track those of gas, soared following Russia’s invasion of Ukraine. Hunt’s tax on low-carbon power generators will come into force on January 1 and is intended to raise more than £14.2bn by its expected withdrawal date of March 31 2028 by adding a 45 per cent charge on wholesale electricity sold at an average price in excess of £75 per megawatt hour.

He said the levy was discriminatory as it only applies to low-carbon electricity generators, including solar, wind, nuclear and biomass, but, controversially, will not target gas and coal-fired power station operators, some of which have been reporting substantial profits. The Treasury said the levy was «not designed to penalise electricity generators». Still, it was a «response to the fact that, as a result of exceptional and unforeseen geopolitical events, some electricity generators are realising extraordinary returns from higher electricity prices».

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