Not all CfDs are created equal

Britain's contracts for difference paid out £1.37bn in the first half of 2026. The average tells you almost nothing about any of it.

In June I wrote about how hard it has been to subsidise Drax — three subsidy regimes, one power station, and a fix that finally looked clever. That piece was about one plant. This one steps back and looks at the whole contracts-for-difference fleet, new build and major existing, because Allocation Round 8 is running right now and it is worth being clear-eyed about what these contracts actually do.

The short version: CfDs are better than their critics say and worse than their defenders say, and the thing that trips up almost everyone — me included — is generalising from one contract to all of them.

Here is the number that makes the point. Between 1 January and 15 July 2026, the levy paid £1,365.8m to 81 generating units across 20.2 TWh. That is an average top-up of £67.63 per megawatt-hour.

Two of those 81 units are within £10 of that average.