Efficiency

Even if you accept the climate premise, CfDs are not a cost-effective way to decarbonise — and getting less so as the grid gets cleaner.

Every pound spent on CfDs produces a quantifiable amount of avoided CO₂ — fewer tonnes each year as the marginal displaced generator is less and less often gas. The £/tCO₂ ratio is rising because the denominator is falling. Against published benchmarks (UK ETS auction prices, DEFRA social cost of carbon), recent allocation rounds sit above both ceilings. The scheme's climate value per pound is decaying structurally.

Charts

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  Subsidy per tonne of CO₂ avoided

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  £/tCO₂ by allocation round over 2017–2025, with DEFRA Social Cost of Carbon and UK ETS reference lines. Rising trend across the plotted rounds (Investment Contracts, AR1, AR2); AR3–AR6 omitted pending sufficient generation history.

What to look at next

Then → Cost for the total pound figure the tCO₂ denominator is dividing into, or → Cannibalisation for why extra wind delivers diminishing returns on the grid.

Methodology

How every number on this page was computed → Efficiency methodology.