Source · Select Committees · Business and Trade Committee
Recommendation 9
9
Deferred
Paragraph: 51
Equalise investment allowance rates for low-carbon electricity developers with oil and gas sector.
Recommendation
Providing that oil and gas companies utilise their investment allowances included in the Energy Profits Levy, oil and gas extraction will continue to benefit from a lower effective rate of marginal tax than low-carbon developers. This risks offering perverse incentives to investors. We recommend that when investing in low-carbon electricity technologies, developers should receive an investment allowance rate equivalent to that received by the oil and gas sector. We further recommend that the Government revisits the case for Voluntary Contracts for Difference for low-carbon electricity generators currently subject to the Electricity Generators Levy.
Government Response Summary
The government's response discusses local decision-making for onshore wind sites and a consultation on changes to the National Planning Policy Framework, failing to address the recommendations regarding investment allowance rates for low-carbon developers or Voluntary Contracts for Difference.
Paragraph Reference:
51
Government Response
Deferred
HM Government
Deferred
29. The Government believes that decisions on onshore wind sites are best made by local representatives who know their areas best and are democratically accountable to the local community. That is why government removed onshore wind from the Nationally Significant Infrastructure Planning process in 2016. 30. In order to give local authorities in England greater flexibility to respond to views of their communities when considering proposals for onshore wind, the Government announced on 6 December 2022 that we will consult on making changes to the National Planning Policy Framework. The consultation closed in March and the Government will respond in due course.