Electricity Generator Levy

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The Electricity Generator Levy (EGL) is a temporary 45% charge on exceptional receipts from wholesale electricity generation in the UK. The EGL applies from 1 January 2023 to 31 March 2028.

This subtopic covers the scope of the EGL, who is liable, reliefs and elections, administration, anti-avoidance and practical considerations that may apply in relation to the EGL.

Background to the EGL

In the Autumn Statement 2022, Rishi Sunak’s Conservative government announced the introduction of the EGL to ‘help fund government support for energy bills and vital public services.’ The recent sharp rise in oil and gas prices has caused a similar rise in the price of wholesale electricity. This has included electricity generated from nuclear and other renewable sources (low-carbon electricity) even though the marginal cost of producing such electricity is less impacted by oil and gas prices. Low-carbon electricity generators have made, and continue to make, extraordinary returns on their activities as a result. The EGL is designed to target these returns while longer-term reforms to the electricity market are explored.

The EGL replaced the ‘Cost-Plus Revenue Limit’ on low-carbon electricity generator revenues proposed by Liz

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