Community Windpower is to sue the UK Government in a bid to block the Electricity Generator Levy, which comes into force on 1 January 2023.
The developer said the legal action was to stop “a smash and grab raid” on renewable energy.
Community Windpower has invested around £2bn in over 1.5GW of UK wind energy.
It has instructed London law firm Mishcon de Reya and leading barristers David Blundell KC and Yaaser Vanderman of Landmark Chambers to pursue the case.
The firm has written to government lawyers warning them of impending legal action should they press ahead with the levy, details of which were released by the Government just before Christmas.
Legal submissions call the levy “unfairly disproportionate, discriminatory and adverse to the Government’s Net Zero Strategy”.
They also cite conflicts with a wide range of existing obligations on Ministers, including laws requiring the Government to cut carbon emissions and to promote alternative energy sources.
Lawyers now expect to prepare proceedings against the Government early in the New Year, with a view to initiating proceedings immediately following the Budget on 15th March.
Even though the levy is intended to apply from 1st January, Ministers will need to enact legislation in the wake of the Budget to give it statutory force.
Critics of the move see this window as an opportunity for the Government to re-examine the policy.
Managing director of Community Windpower Rod Wood said: “Voters will find it frankly bizarre that the Government is bringing in a levy that will deliberately penalise renewable energy firms like ours, while at the same time leaving the gargantuan profits of the fossil fuel electricity generator sectors untouched.
“It’s a smash and grab raid on renewables that will pull the rug out from under the UK’s efforts to cut carbon, cut consumer bills and bring on energy security.
“This measure not only leaves Ministers’ green credentials in shreds, it will also suck hundreds of millions of pounds out of investment in green energy, hammering renewable industries and costing high quality jobs.
“Legal action is a last resort, but the levy proposals quietly slipped out ahead of Christmas are worse than we feared.
“Despite forceful representations made directly to Government over the past two months, Ministers have remained immune to reason.
“The levy proposals are at loggerheads with the Government’s obligation to cut carbon emissions, abide by fair subsidy rules and foster investor confidence.
“We are now left with no option but to seek the court’s intervention.”