AIBU?
To think a windfall tax would prevent investment in renewables at a time when we need them most
allatwonce · 08/09/2022 08:59
This may be an unpopular view, but people need to hear it. The vast profits being made by our energy companies look disgusting but are a once-in-a-generation opportunity for them to invest in alternatives to fossil fuels. They are building wind farms etc, and investing in future technologies such as modern nuclear power stations and fusion. This investment is the only way to wean us off fossil fuels such as gas. If Government takes the profits as a windfall tax, it would be a populist act that many would approve of, but they would then have to hand the money back to the same companies to subsidise their investment activities.
Disclaimer: I've never voted Conservative in my life, but I am objective and open to seeing the logic in some Conservative policies.
Am I being unreasonable?
AIBUYou have one vote. All votes are anonymous.
Flammkuchen · 08/09/2022 09:05
Totally disagree. Let’s say wind power costs £10 per KwH, and renewables companies invested expecting a price of £20 per KwH. If the price is now £100 due to gas shortages, it is a pure windfall gain.
If the price cap limits the price to say £30 per KWH, it’s still an amazing investment.
Conversely, a price of £100 doesn’t encourage extra investment if prices are expected to fall back in the future if the Russia-Ukraine war ends.
allatwonce · 08/09/2022 09:08
@Flammkuchen your reply makes no sense.
The energy firms need the money to build the wind farms, nuclear power stations, etc. This increases the supply of alternative energy, therefore brings the overall cost of energy down.
Randomword6 · 08/09/2022 09:09
It's not a case of either or. The profits can be partially channeled into funding renewables.
MostlyHappyMummy · 08/09/2022 09:10
profits aren't invested back into the companies
if they were, we'd still have gas storage in this country so wouldn't need to buy gas on open market
and we wouldn't have water pipes leaking out more than a third of our water supply
nor have raw sewage being dumped into our waterways
the gaslighting my the government and energy companies is shocking
but more shocking is how the public just fall for it all
Brefugee · 08/09/2022 09:10
What evidence do we have that the energy companies would use their excess (and excessive) profits to reinvest. The lesson of the Water Companies not investing in infrastructure should be a lesson here.
allatwonce · 08/09/2022 09:12
We've never needed gas storage before now, and its not a sensible investment for the future as gas is going to run out soon..We need investment in alternatives to gas.
allatwonce · 08/09/2022 09:13
Brefugee · 08/09/2022 09:10
What evidence do we have that the energy companies would use their excess (and excessive) profits to reinvest. The lesson of the Water Companies not investing in infrastructure should be a lesson here.
Read their annual reports. The evidence is there.
Anothernamechangeplease · 08/09/2022 09:17
So are you proposing that we should legislate to force the energy companies to invest their excess profits in this way, or are you just hoping that they'll do the right thing?
What proportion of their profits would you be expecting them to invest?
NanooCov · 08/09/2022 09:18
Their annual reports are heavily greenwashed.
Windfall profits will (in the majority) be going to shareholders not to reinvestment.
GonnaNeedABiggerGoat · 08/09/2022 09:18
profits aren't invested back into the companies
I don't think it's anywhere near that clear cut.
www.niesr.ac.uk/blog/windfall-tax-good-idea
MarshaBradyo · 08/09/2022 09:21
The governing body OEUK agrees with you
oeuk.org.uk/new-windfall-tax-proposals-risk-untold-damage-to-national-energy-security-warns-offshore-energies-uk/
allatwonce · 08/09/2022 09:21
NanooCov · 08/09/2022 09:18
Their annual reports are heavily greenwashed.
Windfall profits will (in the majority) be going to shareholders not to reinvestment.
You have been heavily red-washed by your social media feed. Putting false info into annual reports is a serious offence and companies wouldn't last long if they did it. (Marketing is different, and sometimes does stray into greenwashing, or at least has in the past).
DazzlePaintedBattlePants · 08/09/2022 09:21
Power bills already have significant levies enforced for green power investment. These will not be affected by the windfall tax. I have no problems whatsoever with a windfall tax.
PestorPeston · 08/09/2022 09:21
If companies reinvest their income in the company there is less profit to tax.
If companies choose to extract vast profits as share dividends and bonuses, then they are choosing to pay tax.
Maybe a certain amount of focus should be placed on the energy market traders and hedgers. When Nordstrom closed wholesale gas prices dropped by 40%.
JustTheOneSwan · 08/09/2022 09:22
If you think a corporate juggernaut like Shell would leave the UK power market open for another company or competitors you aren't thinking straight.
Tax or restrictions isn't a deterrent when money can be made the issue is Tories prioritising their business chums and investments before their electorate plebs who get mugged.
allatwonce · 08/09/2022 09:23
DazzlePaintedBattlePants · 08/09/2022 09:21
Power bills already have significant levies enforced for green power investment. These will not be affected by the windfall tax. I have no problems whatsoever with a windfall tax.
You're missing the point - there was already investment, but it wasn't enough, and the change was happening too slowly. We need an energy revolution, and if the Government plays its cards rights Putin may inadvertently help to fund one.
Anothernamechangeplease · 08/09/2022 09:24
PestorPeston · 08/09/2022 09:21
If companies reinvest their income in the company there is less profit to tax.
If companies choose to extract vast profits as share dividends and bonuses, then they are choosing to pay tax.
Maybe a certain amount of focus should be placed on the energy market traders and hedgers. When Nordstrom closed wholesale gas prices dropped by 40%.
That's a very good point. Any investment in renewable can be deducted pre-tax, and we can then apply a windfall tax to whatever is left over.
MarshaBradyo · 08/09/2022 09:24
allatwonce · 08/09/2022 09:23
You're missing the point - there was already investment, but it wasn't enough, and the change was happening too slowly. We need an energy revolution, and if the Government plays its cards rights Putin may inadvertently help to fund one.
DazzlePaintedBattlePants · 08/09/2022 09:21
Power bills already have significant levies enforced for green power investment. These will not be affected by the windfall tax. I have no problems whatsoever with a windfall tax.
Yes we do
We need vast investment in U.K. energy security
Brefugee · 08/09/2022 09:26
Read their annual reports. The evidence is there.
you are Liz Truss and i claim my fiver. There is zero evidence that water companies are investing properly otherwise you wouldn't have shit in your rivers and the sea. The dividend payments show this.
allatwonce · 08/09/2022 09:26
JustTheOneSwan · 08/09/2022 09:22
If you think a corporate juggernaut like Shell would leave the UK power market open for another company or competitors you aren't thinking straight.
Tax or restrictions isn't a deterrent when money can be made the issue is Tories prioritising their business chums and investments before their electorate plebs who get mugged.
They're not leaving the market. They are transforming themselves to be the alternative energy companies of the future.
The naivity here is seriously worrying - do people honestly believe the likes of BP and Shell are only interested in oil and gas? They've been investing in alternatives for years and are gradually moving away from fossil fuels.
Flammkuchen · 08/09/2022 09:27
Investment is made based on the long-term future expected price, not what it is in the next 2 years.
If prices are expected to be temporarily high, and then reduce again, investment will only be made if it is economic at the expected future price, not the short-term high price.
That is why a one-off windfall tax does not deter investment if it is set at a sensible level and is not arbitrary.
allatwonce · 08/09/2022 09:28
Brefugee · 08/09/2022 09:26
Read their annual reports. The evidence is there.
you are Liz Truss and i claim my fiver. There is zero evidence that water companies are investing properly otherwise you wouldn't have shit in your rivers and the sea. The dividend payments show this.
I'm not talking about water companies, They aren't suppliers of oil and gas. I'm talking about energy companies.
Again, the grasp of basic general knowledge is seriously lacking!
MarshaBradyo · 08/09/2022 09:29
Flammkuchen · 08/09/2022 09:27
Investment is made based on the long-term future expected price, not what it is in the next 2 years.
If prices are expected to be temporarily high, and then reduce again, investment will only be made if it is economic at the expected future price, not the short-term high price.
That is why a one-off windfall tax does not deter investment if it is set at a sensible level and is not arbitrary.
Do you mean the windfall tax that has already happened? So that one off is ok but not again
midgetastic · 08/09/2022 09:30
I would excempt anything actually spent directly on renewables but they would need pretty strong evidence
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