A major investor in wind energy plans to take the UK Government to court over its "smash-and-grab raid" on renewable-energy generators.
Community Windpower has told ministers it will sue in an effort to block the new electricity generator levy (EGL).
Anger in the sector continues to grow over the impact of the controversial new tax, with hundreds of millions of pounds of investments thought to be now at risk.
The Association for Renewable Energy and Clean Technology (REA) warned last month that the EGL will impact the UK's energy security, hit bill payers and act as a drag on the net-zero push.
The 45% windfall tax was announced by Chancellor Jeremy Hunt in the recent Budget. The levy aims to raise £14billion by 2028 from renewable, nuclear and biomass firms.
It brings the headline rate on earnings for green energy companies to 70% when combined with Corporation Tax.
Legal professionals mobilised
In a bid to halt the EGL, Community Windpower - a £2billion investor in over 1.5 gigawatts of UK onshore wind energy - has mobilised a team of legal professionals.
It has instructed London law firm Mishcon de Reya and leading barristers David Blundell KC and Yaaser Vanderman of Landmark Chambers to pursue the case.
The firm has also written to government lawyers warning them of impending legal action should they press ahead with the levy.
Rod Wood, managing director of Community Windpower, told Energy Voice: "Voters will find it frankly bizarre that the government is bringing in a levy that will deliberately penalise renewable energy firms like ours, while at the same time leaving the gargantuan profits of the fossil-fuel electricity-generator sectors untouched.
"It's a smash-and-grab raid on renewables that will pull the rug out from under the UK's efforts to cut carbon, cut consumer bills and bring on energy security.”
But a Treasury spokesperson told Energy Voice: "This temporary measure is not designed to penalise electricity generators, it is a response to the fact that, as a result of exceptional and unforeseen geopolitical events, some electricity generators are realising extraordinary returns from higher electricity prices.
Unprecedented action
"These higher prices have imposed substantial costs on households and businesses which is why the government took unprecedented action with £55billion to directly help people with their energy bills.
"The continued investment of generators in the industry is vital to our long-term energy security and this levy leaves them with a share of the upside they receive at times of high wholesale prices."
- It emerged at the weekend that two nuclear power stations crucial to keeping Britain's lights on risk being closed next year as a result of the EGL.
The Telegraph says that EDF, which operates all five of the country's serving nuclear plants, said the chancellor's raid on power producers will make it harder to keep the ageing Heysham 1 and Hartlepool stations open as long as hoped.
It would mean the sites close in March 2024, potentially removing the "cushion" of spare capacity used by the National Grid to avoid blackouts and reducing nuclear-power generation in Britain to its lowest level since the 1960s.