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Potential rise in business rates for renewable generators criticised
1 February 2005
A potential four-fold rise in business rates for renewable generators has been dubbed a "stealth tax" by industry forum Scottish Renewables (SRF). New draft ratings assessments for energy generating plant are criticised by the industry as pushing up costs beyond acceptable levels and penalising the "greenness" of renewable plant. Under new rules for calculating rates to be paid by renewable generators, account will be taken of funding received under the renewables obligation (RO). Sales of renewables obligation certificates (ROCs) command a premium above the value of the electrical output, as electricity retailers vie to fulfil their individual ROs. SRF estimates the new business rates for wind will rise from the current £5000 per megawatt per year to between £7,500 and £15,500. By contrast, rates for coal and nuclear will see a four-fold decrease. The new measures will cost renewables in Scotland an extra £25 million per year, says SRF. "The proposed changes will lead to higher costs for renewable producers, jeopardise the achievement of renewable targets and save Scottish customers only £25 million," says Maf Smith from SRF. "We will be taking this up with the Scottish Executive and asking for parity with producers in England and Wales." The new charges will be introduced from April when the Scottish Executive passes management of rates north of the border to the Scottish Assessors Association.
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