Another country has announced the levy of huge profits! 130 Euros/MWH threshold

As part of the EU's "Taxation within the border" plan, the Dutch government announced the upper limit of solar and wind power generation profits of 130 euros/MWH (include $ 136) this week, which is used to curb excessive energy profits.

The taxation of the Netherlands has exceeded the threshold value of 180 euros/MWH proposed by the European Commission in September. This provision is implemented from December 1, 2022-June 30, 2023. The European Union predicts that member states can get a revenue of up to 117 billion euros ($ 123 billion) from this upper limit. The Dutch government said it will invest all income to reduce home electricity bills.

The Dutch government stated that it will propose an implementation bill to the House of Representatives in the spring of 2023 and then trace back to December 1. The government will continue to discuss the best taxation method with industry organizations.

In September of this year, industry analysts expressed concern about the possibility of taxation of renewable energy from zero renewable energy sources.

The tax of 130 euros/MWH will be suitable for producers with a capacity of 1MW or more, which is equivalent to a photovoltaic power station with about 3,000 solar components.

The power generation of biomass energy will be subject to the upper limit of 240 euros ($ 252)/MWH, and coal power will have a flexible upper limit, depending on the pricing.

Rob Jetten, Minister of Energy of the Netherlands, said the tax was designed with European member states to provide some funds for reducing electricity prices.

A few days after the initial revenue of the EU's initial revenue, the trading institution Solar Power EUROPE said it was deeply concerned about the inconsistent taxation of various member states. It urges countries to abide by the upper limit of 180 euros/MWH to avoid tax levy in incomparable solar power generation.

The industry analysts also proposed the same concerns. They believe that solar energy is the most likely to be taxed because it is always the cheapest energy. Taxation will effectively slow down the investment and market growth of the industry.

Some people are worried that taxation will affect companies with a fixed power purchase agreement. Before the price rose earlier this year, some manufacturers locked the electricity price with the contractor, which means that the interests of the price increase will be passed on to the contractor. According to the consulting company Aurora Energy Research, if the manufacturer must pay taxes, the part of it is not the surplus profits, but to recover the income required by the investment.

This year, the United Kingdom and Spain have levied huge profit tax on energy companies and generators, and member states have also adopted the EU taxation method.

The Dutch government said that the market price of the planned investment was 40-70 euros/MWH, and at the upper limit of 130 euros/MWH, there is still room for gaining profits.