Many people know that the Renewable industry has lobbied long and hard for the Contracts for Difference (CfD) scheme to be widened again to include on shore windfarms – which are the most lucrative, cost effective means of producing electricity from wind .
The CfD  is a 15 year contract, administered by the UK Government’s Low Carbon Contract Company (LCCC), which guarantees a fixed rate for any electricity produced (The ‘strike’ price) regardless of the actual wholesale price of electricity. The difference in price can be two to three times the actual wholesale cost – which is why a CfD are highly sought after by developers.

Electricity consumers foot the bill for this massive subsidy – in 2018-19 alone, this cost us, the consumers, £980.2 million more than the going rate for our electricity.

Yet electricity produced under the CfD scheme in 2018-19 accounted for only 4% of UK electricity demand. So, 96% of generating companies seem to be able to exist without these lucrative subsidies.

The LCCC has, as one of its two guiding principles, “ to minimise costs to consumers”. It does not seem that this scheme is minimising costs to consumers, but maximising profits to CfD holders.

In addition to the obscene costs to consumers of paying for this subsidy through their electricity bills, there was an additional £12.3 million added to consumer’s bills, simply to pay the running costs of the LCCC so that they can  meet their other guiding principle of ‘maintaining investor confidence’.

All of these figures are within the 2018/19 annual report of LCCC https://www.lowcarboncontracts.uk/sites/default/files/2019-07/LCCC%20Annual%20Report%20and%20Accounts%202018-2019_2.pdf

As we enter the worst recession ever for the UK, with more unemployed people and families at home paying even more for this scheme, it’s time UK consumers understood what they’re paying for and decided whether its time to pull the plug on lining the pockets of already wealthy renewable energy generators

Dr Rachel Connor


SAS Volunteer

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