2024 Marks a Record High for Government Subsidies in Renewable Energy
Published · 2 min read
Last year, the UK government spent a record £2362 million on Contracts for Difference (CfD) subsidies. This is the highest amount ever and beats the previous record set in 2020. The increase is partly because electricity prices were very low in 2020 due to less demand during global lockdowns. Experts predict the final amount for 2024 might be even higher as data is still being finalized up to December 22nd.
Understanding CfD Subsidies
In 2024, subsidies supported 30.2 terawatt-hours (TWh) of electricity production. The government paid an average of £78 per megawatt-hour (MWh), which is about double the normal market price. This means renewable energy projects like wind farms and biomass plants got extra money to make them cost-effective and to encourage more green energy production.
| Type of Energy | Subsidy Amount (in million £) |
| Wind Power | 1970 |
| Biomass | 299 |
Since the start of the CfD scheme in 2016, wind power has received a total of £9.1 billion in subsidies, with biomass projects receiving £2.5 billion.
Broader Impacts of Subsidies
Subsidies for wind power, including those through the Renewable Obligation Scheme, totalled £4.6 billion for the year ending in March 2024. When we include payments for not producing electricity when there’s too much power (constraint payments), the total support for wind energy amounts to about £7 billion a year.
Critics, like those from Veritatem 2021, argue that these subsidies are too high and act like a “protection racket”, claiming they only serve the interests of companies building and maintaining wind farms.
“Wind power is a tax-payer funded protection racket because it is built on the claim that it will protect us all from climate change.”
Government and Public Response
The UK government supports these subsidies as they help shift the country towards more renewable sources of energy, which is crucial for reducing greenhouse gas emissions and combating climate change. Additionally, these investments help secure the nation’s energy future and create jobs in green technologies.
Quote by J. Robert Oppenheimer: “We do not believe any group of men adequate enough or wise enough to operate without scrutiny or without criticism. We know that the only way to avoid error is to detect it, that the only way to detect it is to be free to inquire. We know that in secrecy error undetected will flourish and subvert.”
