CFD subsidies with a record pound of pounds have been paid in 2024?

Daily doubt

David Turver

After the record payment under the prepaid plan of the deadline for the deadline for March 2024, the data can be used for subsidies for the 2024 calendar difference plan (CFDS) payment. From low -carbon contract company (LCCC). The data is smaller revised, and the data of the article is carried out on January 14, 2025.

Paying a record of 2.4 billion pounds among a series of technologies, but the biggest receiver is sea style. There are other interesting facts in the data we can explore now.

How does CFD work?

Some people often ask the working principle of CFD, so it is worth a brief explanation before the details of the data are studied in depth. I have pulled Figure 1 from below from below to illustrate their working principles from the renewable exchange.

The black line shows the market price (or reference price) of electricity prices at any day. The red line is the camping price of CFD, which reflects how much the generator will pay for its electricity, regardless of market value. Please note that, in fact, as we will see below, the average strike price of Active Offshore Wind CFD is more than 150 pounds/MW.

When the black line is below the red line, the market price of the power generated by the generator and CFD recharge (subsidy) of the differences (subsidies) of the difference. In a few cases, when the market price is higher than the strike price, the generator pays the LCCC, as shown in the blue line, so its net income is equal to the strike price.

Annual subsidy

Figure 2 shows the entire annual subsidy since the start of the plan at the end of 2016 and is broken down by the technical type.

In addition to 2024, the overall record of the overall record, there are more subsidies for offshore wind than any other year, and have paid 1.9 billion pounds. The biomass conversion is a euphemistic language of burning trees, which has obtained £ 309 million, and has gained 90 million pounds with heating and power biomass (CHP). The land winds got 73 million pounds, and the two effective CFD solar farms received more than 1 million pounds.

By the way, in December 2024, the subsidy paid 260.3 million pounds, which was the second highest month in the record. In April 2024, the highest was 269.8 million pounds.

Supporters of renewable energy often point out that when the price of the power market is higher than the CFD strike price, the generator will repay. It is true, but when this repay the net cost of £ 346 million in 2022, compared with the net cost of 9.6 billion pounds since its establishment.

The subsidy day of 20 days

From the beginning of the data, the top 20 subsidy date can be at the beginning of the plan. These are shown in Figure 3 below.

The subsidy days of the first 13 CFDs occurred in 2024, and in the same year, a total of 16 days appeared in the top 20. The one with the highest subsidy payment is December 22, 2024, and more than 20 million pounds were paid within a day. The offshore wind is the main recipient of the government's compulsory request that day. It has obtained more than 18.3 million pounds, and the biomass has received more than 1 million pounds.

Although the price of gasoline has increased the reference price, the record and subsidy date of last December was still. The annual index of CFD strike price means that with the significance of inflation, with the development of each year, we may see more recorded subsidies, especially if the price of natural gas is more normal.

Top CFD subsidy recipient

We can also see a large number of highest subsidies. The top ten history in Figure 4A below, of which the top 10 in 2024 are shown in Figure 4B.

Six of the top ten receivers in history are offshore wind farms. Walney's revenue was 1.76 billion pounds, and Hornsea Project 1 ranked second to 1.67 billion pounds. The third place is Drax (DRAX), which has paid £ 1.6 billion in burning tree subsidies. Note that DRAX also has another factory funded by renewable energy obligations, so this is just part of the story. The top ten other offshore wind farms are Dudgeon, Beatrice, Burbo Bank and East Anglia One. Lynemouth and Teesside biomass plants have also become the top 10 with Dorenell's land wind power.

The top ten in 2024 led at sea winds, Drax ranked sixth, Lynemouth biomass plants were ninth, and Teesside Biomass and CHP plants ranked tenth.

CFD power generation

Now, we can try to explain why subsidy payments are increasing. First of all, we can view the total power generation, as shown in Figure 5.

As Hornsea Project 2 and Moray East in March last year activated CFD, a generation in 2024 also reached another annual climax at the highest point of 2024. The biomass and biomass with CHP also saw a significant increase in output. There are only two active CFDs solar energy, and its output is almost impossible to detect.

CFD strike price

As shown in Figure 6, with the passage of time, the inflation in April every year will rise over time.

Since 2017, the strike price of biomass has risen every year, from £ 107/MW to more than 139 pounds last year. Similar situations have occurred in land winds and solar energy. The exception is sea style, and the price fluctuates within the range of 160-165 pounds/MWH from 2017 to 2022. Then, in 2023, the price of £ 171/MM from 2023, the price of £ 154/MWH in 2024. The decline in 2024 can activate its CFD interpretation through Hornsea Project 2 and Moray East in March 2024. The strike price of these two projects is much lower than other projects, and the price is 78 pounds/mWh, so even if the strike price strike price is indexed up.

CFD reference price

Since 2017, this year's weighted average reference price (equivalent to the black line in Figure 1) has fluctuated a lot, as shown in Figure 7.

Sea winds, land and solar charts are very close, so for the sake of clearing, the map only shows the intermittent reference price of offshore wind. The various flavors of biomass use different reference prices, called the basic load market reference price (BMRP), and we will handle it separately. From 2017 to 2019, the average range of offshore wind energy is 41-57/mWh. The price in 2020 declined due to gasoline prices and demand. The price in 2021 rose to an average price of £ 115/h, mainly due to the energy crisis began in the second half of the year. With the invasion of Russia's invasion of Ukraine, the price by 2022 rose to 1,77 pounds/MWTht, and with Russia's invasion, the price fell to 89 pounds/MWhm in 2023. The price in 2024 fell to £ 67/MW in 2024, even if the price increased in the second half of this year.

CFD subsidy per MW

The difference between strike price and reference price enables us to calculate the subsidies obtained per MWh, as shown in Figure 8.

In 2022, all technologies repaid the system on average, and negative subsidies were generated per MW. However, in 2023 and 2024, these three intermittent technologies resumed the main area.

We can see the share of market revenue and subsidy income of each technology specified in Figure 9 in 2024.

The subscribed price obtained by the sea is 86 pounds/MW, which exceeds the intermittent reference price of 67 pounds/MWT time, which means that the average CFD -funded offshore wind farm received from subsidies (56 %) More (56 %) the power in the market than selling their income. The on -site wind received 48 pounds/MW (43 %), and solar energy received 45 pounds/MW (41 %) income.

Load

We can also calculate the average load factor of the main intermittent technologies funded by differential contracts, as shown in Figure 10.

Compared with the capacity of all three technologies, we can see the general decline of the power generated. However, although the new wind farm is about to access the Internet, the load coefficient of the sea wind is only 38.7 %, which is the lowest. However, the average level of the eastern Mori is only 21 %, which may reflect the high level of the year. When the power generates exceeds the demand or the power that can be processed, it will be reduced, so WindFarms is required to close. Although Beatrice and Triton Knoll showed a significant increase in 2024 and 2023, East Anglia 1 and Hornsea (East Anglia 1) and Hornsea ) The projects are significantly reduced.

Subsidies for CFD biomass plants

Back to biomass plants, we can see how much subsidies they get per MW and the relationship between subsidies and power generation in Figure 11.

in conclusion

What conclusions can we get from all these data? It is almost certain that in the next few years, the overall subsidy payment will continue to rise, because more offshore wind farms will soon rise, which will improve the level of power generation.

Forecast strike prices are more difficult. However, we know that the new development of online, such as Gaoithe (NNG) at close range, the strike price is currently 158 pounds/MW, and the new index in April will have the effect of increasing the average strike price. However, other projects with lower strike (such as Dogger Bank and Sofia) may also be online and activate its CFD, which will promote the strike price in the opposite direction.

The reference price is even more difficult to predict, because we do not know the future of natural gas, this is the main driving force for reference price. Due to the rise in reference prices, higher natural gas prices will reduce subsidies. At present, natural gas prices have risen. Therefore, as long as the global tension will not be upgraded, we may expect natural gas prices to fall, so the reference price will also fall and subsidies will rise. In addition, when wind and wind, reducing more offshore wind on the grid will reduce the reference price. In most generations, lower reference prices will tend to increase subsidies per MW.

Unfortunately, as the bills of differential contracts continue to upgrade, we are adding higher bills.

David Turver writes Your own values Replacement, this article appeared for the first time. He will give a lecture on a sacred cow held in London on January 28, titled “Net Zero: Why treatment is worse than climate change diseases.” You can find more details and tickets here.

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