The CEO of SSE has warned that the Government’s windfall tax damages the economic viability of running hydroelectric plants during certain periods of time.
The head of SSE has warned that Chancellor Jeremy Hunt’s new windfall on energy companies could threaten the UK’s energy security, as the firm may be forced to reduce its electricity output to beat the tax. Last week, Mr Hunt has announced a large hike in the taxes slapped down on the profits of energy giants, which will go from 25 percent to 35 percent until 2028 as the Treasury scrambles to shore up funds to plug the £55billion fiscal black hole Government finances. However, he also announced that electricity generators also will have to pay a new temporary levy of 45 percent.
Together with the windfall tax, the Treasury chief estimated that the combined measures could raise as much as £14billion next year, in a major reversal of the previous Prime Minister’s stance on the issue.
However, Alistair Phillips-Davies, the CEO of SSE noted that this move could threaten the UK’s energy security this winter, as the firm may have to lower the output of its hydroelectric plants in January and February to avoid paying the tax.
The Telegraph reported him saying: “That will mean there’s probably less certainty of supply over the absolute peak.”