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Scottish Power: Windfall tax could pull plug on green investment

Chief Keith Anderson told The Times if renewable power generators like Scottish Power faced a levy similar or harsher than the oil and gas sector, ScottishPower could slow or reduce its investment in Britain. 

“It will make us reconsider,” he said. What do we invest in the UK? How quickly do we invest it in the UK? And are there other markets that are more attractive than the UK?”

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Beyond this, it has so far not confirmed its plans.

Anderson is calling for suppliers and generators of renewable energy, such as Scottish Power, which uses UK wind farms, to receive generous tax breaks to encourage further investment in the green energy sector.

But the energy profits levy on North Sea oil and gas producers imposed in May could increase from 25% to 35% under government plans, and may be extended to the power generation sector.

Anderson conceded the need for a windfall tax, but has argued it should be applied to the entire power generation sector, and should tax only genuine windfall profits.

Scottish Power’s pre-tax earnings from its renewables business rose by 22% to £451m in the first nine months of the year.

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Its CEO said it was “absolutely not” making windfall profits at the moment because it had pre-sold its power output between 18 months and two years ago at prices well below today’s high wholesale prices. 

“I do not think there will be any justification at all to put any kind of additional tax on a renewables business like ours right now,” he said.

The statement comes in the wake of reports Chancellor Jeremy Hunt is planning to levy a tax on electricity generators in the upcoming Autumn Statement.

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