United Kingdom

United Kingdom

Infinis seeks CCL judicial review

UK: Wind developer Infinis and biomass operator Drax Group have applied for a judicial review into the government's decision to end the exemption of renewable energy sources from the climate change levy (CCL).

Infinis operates the 30MW Lissett Airfield wind plant in Yorkshire
Infinis operates the 30MW Lissett Airfield wind plant in Yorkshire

Infinis said the 24-day notice given by the UK's treasury department was inappropriate and has called on the court to force a "reasonable and proportionate" notice period.

The CCL is a tax on businesses' power usage, designed to encourage energy efficiency and to reduce carbon emissions.

UK Chancellor of the Exchequer George Osborne announced in July's budget the CCL exemption for renewable electricity would be removed.

The budget document said the removal "will correct an imbalance in the tax system by preventing taxpayers' money benefitting renewable electricity generated overseas, and by helping ensure support for low carbon generation provides better value for money for UK taxpayers".

Infinis said after the announcement in July that the change could reduce its 2015/16 annual earnings by £7 million and £11 million the following year.

Infinis has 274MW of installed capacity in the UK, with approximately 400MW in the pipeline.

In its half-year financial report, renewables developer RWE warned the UK government its proposed changes to renewables policy could see future projects cancelled.

"The UK government intends to cut green energy subsidies and has already abolished the exemption from the national climate protection levy [CCL]. This may result in planned renewables projects no longer being profitable, which would cause them to be abandoned," RWE's financial report said.

The move by the government comes at a time of great uncertainty in support for renewables, particularly onshore wind.

The Renewables Obligation (RO) certificate subsidy will be closed in 2016, a year earlier than expected, to onshore wind projects, the government announced in June.

There is also uncertainty surrounding the future of onshore wind sector's involvement in future contract for difference auction rounds. Energy minister Amber Rudd has been evasive over whether onshore wind would be able to compete for support in the RO-replacement scheme.

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