Efficiency — methodology¶
The Efficiency theme computes £ subsidy per tonne of avoided CO₂. Three methodology pieces: (a) the £ numerator, (b) the tCO₂ denominator, (c) the gas counterfactual the carbon-displacement argument rests on.
£ subsidy per tCO₂ avoided¶
Numerator: CfD CFD_Payments_GBP (the levy-channel subsidy — what consumers top up via the CfD levy). Excludes wholesale-channel payments because those are what consumers would have paid for any electricity. Denominator: LCCC-reported Avoided_GHG_tonnes_CO2e, which uses DESNZ's grid-average emission factor for the displaced margin.
Allocation-round aggregation¶
Ratios are computed per allocation round (IC, AR1, AR2, AR3) and averaged over the units active in each round by year. 2022 is excluded from the time-series view because negative CFD_Payments_GBP values that year (strike < reference during the gas crisis) distort the ratio; the underlying data is still valid but the chart becomes unreadable.
Reference benchmarks¶
Two horizontal reference lines on the flagship chart:
- DEFRA Social Cost of Carbon (~£280/tCO₂, 2024 central value) — the societal damage cost published for UK policy appraisal.
- UK ETS auction price (~£50/tCO₂, 2024-25 average) — the market price of a traded UK emissions allowance.
Gas counterfactual¶
The underlying displaced-gas assumption is the same one used in Cost: