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Offshore wind provides the bulk of electricity generation under the CfD scheme. Even with today’s elevated gas prices, the reference prices in March 2026 (£77/MWh) were much lower than the current strike prices of projects awarded contracts in AR6 (£88/MWh) and AR7 (£97/MWh). Onshore wind strike prices are slightly lower and those for solar much lower. But these projects produce trivial amounts of electricity compared to offshore wind, so we can expect subsidies to keep rising and bills to go ever higher.
Labour’s announcement that it will scrap the Carbon Price Support mechanism in April 2028 is a welcome, if tardy, intervention that will reduce wholesale electricity prices and hence reference prices. However, this means that CfD-funded generators will simply collect more of their revenue from subsidies rather than the market.
Conclusions
Even with elevated gas prices, CfD subsidies are soaring and the outlook is that Miliband’s AR6 and AR7 auctions are going to send bills even higher. This has not stopped Ember putting out another shonky report that tortures the data to produce the result they want.
It should be obvious, even to them, if subsidies are being paid to renewables then they are more expensive than gas. With this level of desperation from Ember, we really must be witnessing the dying embers of Net Zero propaganda.
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