According to the Guardian, several renewable energy producers are very concerned that the removal of the exemption from the climate change levy is likely to push many projects from being profitable to generating a loss. Currently producers of energy from the traditional carbon sector, such as coal, have been required to pay additional tax as a contribution to climate change projects. Those working on green energy projects, like wind and tidal power, have been exempt — ostensibly because their energy generating methods are designed to be carbon neutral.
The current tax exemption is an effective subsidy payment to renewable energy companies of around £5 ($8) for every unit of green electricity they generate. Following the announcement, the Daily Telegraph notes that shares in renewable energy companies fell sharply. The Renewable Infrastructure Group was hit heaviest, with its shares sliding 3.8 percent within a few hours of the declaration being made.
Writing to the Guardian, Joseph Nicholas makes the point that the U.K. Chancellor of the Exchequer, Gideon (“George”) Osborne, an advocate of fracking and nuclear power, is taxing green energy schemes in order to promote these other forms of energy production. Friends of the Earth likened the move to making “apple juice pay an alcohol tax.”
Another area of criticism came from Catherine Mitchell, professor of energy policy as the University of Exeter. Here Professor Mitchell said: “The government says that it wants a sustainable, secure and affordable energy system, but recent rhetoric and policy changes are taking us further away from that goal.”
In related news, while green energy has a lot of support a question has been posed as to whether some projects harm the natural world? To answer this the U.K. government is spending $3 million to explore future scenarios to see what affect initiatives like wind turbines have on the general environment.
