UK Raises Windfall Tax on Older Renewables, Crisis Guide

This week ministers announced changes to the electricity market aimed at reducing the influence of gas prices on consumer bills. The reforms target older wind and solar farms that have been operating for more than a decade, increasing the levy on their excess profits. At the same time, the government is inviting those generators to sign voluntary contracts that lock in a set price for up to 15 years, providing revenue certainty.

The windfall tax increase applies specifically to renewable assets built before 2015, raising the rate from the previous level to a higher percentage of profits above a set threshold. Officials said the extra revenue will help fund targeted support for households struggling with energy costs. In 2022, the administration lacked the detailed data needed to identify which billpayers were most in need, limiting the effectiveness of emergency aid measures. Separately, the Institute for Government released a paper titled *Policy making in a crisis: A civil servant’s guide*, which sets out steps for officials to prepare, innovate, and learn from past emergencies while maintaining clear communication.

Higher taxes on long‑standing renewables could affect the financial calculations of investors, potentially slowing new investment in older sites unless offset by the stability of long‑term contracts. The voluntary fixed‑price agreements aim to mitigate that risk by guaranteeing income, which may encourage owners to keep plants operational. The data shortfall highlighted in 2022 suggests that any new support scheme will need robust information systems to reach the right households. The civil‑service guide offers a framework for officials to manage simultaneous pressures, such as energy market reforms and ongoing international crises, by emphasizing preparation, lesson‑learning, and clear messaging.