Windfall tax would hit renewables investment, National Grid boss says

The chief executive of National Grid has weighed into the row over whether to introduce a windfall tax on North Sea oil and gas producers, claiming it would hit investment in renewables and harm customers.

John Pettigrew argues a one-off levy to pay to ease the burden of bills would risk damaging Britain’s attempts to cut emissions.

Debate is raging over the idea of a windfall tax, amid reports that Boris Johnson and the chancellor, Rishi Sunak, are split over how to respond to Labour’s calls for the measure to be introduced to fund help for households hit by soaring bills.

Pettigrew told the Guardian on Thursday: “A windfall tax is something that I see as a deterrent for investment when we think about the context of the energy transition that we have going on and the level of investment needed to support the climate change targets … and the increasing desire for energy independence.

“It’s really important that we don’t have deterrents on investment for projects, for technology and for job creation. I would worry about a windfall tax doing that.”

If such a measure were introduced, it would probably be levied on the profits of North Sea oil and gas firms, rather than National Grid which handles the transportation of energy supplies.

Johnson has argued that the tax would deter investment in renewable energy. However, BP has admitted a levy would not stop it from making any of its planned UK investments.

Pettigrew added: “I can’t talk for BP and Shell, but I can tell you that for someone who’s investing in assets that are going to be in the ground for 40, 50, 60 years, having a stable regulatory and policy environment is massively important.

“The benefits of that stable environment is you are able to raise capital privately, and therefore not put pressure on the public purse at the lowest cost possible, which flows through to customers.”

Pettigrew was speaking as National Grid posted an 11% rise in operating profits to nearly £4bn in the 12 months to the end of March, boosted in part by an increase in revenues from subsea cables connecting electricity supply with Europe.

Last week the company agreed to bring forward a £200m payment to customers generated from the cables to help households with soaring energy bills.

The company embarked on a deal-making spree last year as it bought electricity network Western Power Distribution for £7.9bn and sold 60% of its gas business to Canadian and Australian investors for £4.2bn.