Energy and Environment

Further windfall taxes won’t solve our energy supply crisis


Energy and Environment

Commentary by Matthew Lesh discussed in ConservativeHome

Andy Mayer quoted in City A.M.

Andy Mayer, IEA energy analyst, has been quoted in City A.M. commenting on the windfall tax on energy companies.

Raising concerns over the consequences the tax will have for future investments in the industry, the article reads:

“Andy Mayer (…) argued that windfall taxes are “rarely wise” and are usually justified to correct gain from policy error rather than pure market fortune.

“He told City A.M.: “They discourage investment, doubly so if investment relief is removed. A folly when the issue is shortage of energy supply.”

“Instead of targeting North Sea oil and gas, he argued there was much more of a case for imposing levies on “old renewables” – long standing generators that gain both gas power prices and a subsidy – yielding 100 per cent plus margins.

“Mayer concluded: “This could be ‘windfall’ corrected, suspending the subsidy, and possibly capping market returns closer to levels in the new renewables scheme.”

Read the article here.