The UK Government is reported to be pressing ahead with plans to cap revenues that renewable electricity generators are making from sky-high wholesale power prices following Russia's invasion of Ukraine.
Companies generating power from wind and solar fear that the plans, similar to proposals already announced by the European Union, will effectively amount to a windfall tax on renewable energy.
The Financial Times says the businesses involved in renewable power generation that could be affected include EDF Energy, RWE, ScottishPower and SSE.
The government had been hoping to persuade these electricity generators to agree voluntarily to 15-year fixed-price contracts well below current wholesale rates for their output.
But talks with the companies have collapsed and government legislation, which could be unveiled as early as this week, will be used to underpin a revenue cap on the generators, said people familiar with the plans.
With UK households contending with soaring energy bills, the government indicated to generators at a recent private meeting that it would pursue a cap.
Starting point
Prices of about £50 to £60 per megawatt hour are said to have been mentioned as a starting point for the cap - well below current prices of about £490.
The FT says ministers have been alarmed at profits being made by some electricity generators that are still benefiting from a government subsidy scheme that dates back to 2002, when the renewable industry was in its infancy.
Electricity generators fear the UK Government's plans will be more damaging to the sector than the windfall tax imposed on North Sea oil and gas producers earlier this year, as at least that levy was accompanied by a new investment allowance.
Meanwhile, it has emerged that the Rough gas storage site is set to make a minimal contribution to Britain's energy security this winter, as talks drag on between its owner and the Government over a long-term funding deal.
The Telegraph says Chancellor Kwasi Kwarteng opened discussions with Centrica in late spring when Mr Kwarteng was the then business secretary over re-opening the North Sea cavern this winter amid a scramble to bolster energy supplies.
Chris O'Shea, chief executive of Centrica, said earlier this year the site could be restored in time for winter, albeit at well below full capacity with plans to significantly increase its capacity next winter as part of a phased approach.
However, the site is yet to get up and running and has not been factored into National Grid's winter outlook for gas supplies, amid expectations it could at most supply less than 1% of peak demand this winter.