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CfDs set to pay back £10.5bn a year to consumers by 2027

CfD auctions are set to run every year from 2023 to further accelerate the rollout of renewables.

CfD auctions are set to run every year from 2023 to further accelerate the rollout of renewables.

Contracts for Difference (CfD) supported renewables could pay back £10.49 billion a year to customers by 2027.

According to a new report from think tank Onward, from November 2021 to January 2022, CfDs have already paid back £114.4 million to energy suppliers. This is equivalent to each household saving £6.46.

While this may seem small now, further renewables are set to come online over the next five years, through the scheme, leading to each household saving £97.53 per year by 2027.

The report highlights that, despite some MPs and groups pointing to the investment in renewables as a driver of growing energy bills, they are actually already helping to lower the cost of electricity.

In 2021, renewables made up 29% of electricity generation in the UK, displacing around £6.1 billion worth of gas. This is equivalent to £221 of gas per household, according to Onward.

Conversely, 90% of the increase in bills in the UK is due to increased gas prices in Europe during 2021. While customers have thus far been protected from the increased costs, the price cap is increasing by 54% in April.

“As this analysis shows, those who seek to pin the blame on the net zero agenda for the current energy price crisis are mistaken,” said Alex Luke, Senior Researcher at Onward.

“The UK’s investment in renewables supported by the Contracts for Difference scheme is now helping to limit the damage of skyrocketing gas prices, and will insure consumers against any future spikes by saving them money on their bills.”

The report follows analysis from the Energy and Climate Intelligence Unit earlier in March, which suggested the CfD scheme will pay back £660 million between October 2021 to April 2023.

As concern over high power prices continues to grow, charities, political parties and organisations have been calling on the government to act to mitigate the impact on households. Core to much of this is the push for more energy independence through a higher share of renewables and greater energy efficiency measures.


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