In the UK today the press reported that UK's Labour Government was considering a windfall tax on power generators to recoup GBP 9 billion benefit that utilities will receive from emissions permits. Whatever the merits of a tax and its application to help customers, as The Times puts it "in fuel poverty", this kind of thinking is exactly how Government's should not behave when thinking about the energy sector and its shift towards renewables.

The UK is acknowledged as one of the dirtiest generators of power in Europe because of its dependence on old coal power stations. The move to renewable and sustainable renewable power is urgent and it requires a long term plan and for the power generators a knpwledge that if they commit to renewables that funding is there and it would be jeapodised by shortfalls in Government budgets. Nor should Governments be too upset that the cost of energy is rising if it seeks to up the ante on renewable energy.

We all know that so far renewable energy is more expensive. A key Government strategy should be to make it more expensive so that consumers look to use less energy and renewables become more viable. Power companies should respond by committing to invest a percentage of their investment in renewables. Most want to anyway.

Ofgem, which has made the recommendation to the UK Treasury, will not help a move to renewables if the power industry is seen as as easy pickings for windfall taxes. The power industry isn't always perfect but windfall taxes disrupt planning and are always a no no.