Following the news of the government’s plans to cap revenues of renewable energy generators and nuclear power plants, Tom Gilbey, equity research analyst at Quilter Cheviot has commented.
He said: “While no details have yet been provided for a cap on the revenues of renewable energy providers, the wind is clearly blowing in that direction given the soundings coming out of the government. It is right that there should be a cap in place and that companies cannot expect to make supernormal profits at a time when household energy bills are soaring.
“However, there is a balance to be struck here and a risk that the government goes too far with its plans. Overall, this wouldn’t be a particularly positive or progressive move at a time when investment should be encouraged into renewables and green energy technologies. This could result in a step backwards in our transition towards a greener future and impact jobs in what is still a developing industry.
“The UK government has spoken about the importance of this industry, but the caps are rumoured to be below the levels set by the EU and thus does risk putting off people bidding for projects in the UK. With the energy transition in full flow, now is the wrong time to be stringent on an industry that needs the investment.”