Question to the HM Treasury:

To ask the Chancellor of the Exchequer, pursuant to the Answer of 24 November 2023 to Question 92055, if will make an estimate of the potential tax revenue which would be raised from a 45 per cent tax on extraordinary returns from combined-cycle gas turbine generators.

Gas generators are excluded from the Electricity Generator Levy (EGL) announced at Autumn Statement and the revenue estimates published at Autumn Statement include low-carbon electricity generation only. The UK’s approach is in step with the approach taken internationally including the EU’s whose proposed cap on the market revenues from electricity producers does not include gas fired generators.

As set out in the Government’s response to Question 92055 while gas generators are experiencing increased revenue from the substantial increase in the market prices of electricity, they are also impacted by the substantial increase in the price of gas. The inclusion of gas generators within the EGL could have unintended impacts on electricity pricing with implications for the market as a whole or on certain business models.