I wrote Where Power Lies because I was shocked by the extent to which the UK’s energy infrastructure was owned by multinational companies and foreign investors. I fear that, if anything, the situation will only have deteriorated over the three years and more since I wrote it.

I felt moved to return to the subject today when I read David Turver’s latest excellent piece about subsidies paid to renewables companies, with particular reference to Contracts for Difference (CfD). I was struck by the sheer scale of these payments in 2024, together with the fact that even were common sense to return to the DESNZ tomorrow (it won’t) so that the drive to renewables was slowed and future CfD rounds scrapped, we will be saddled with these payments for very many years to come. I have also written about the CfD regime before, but the situation seems to have deteriorated since then (for the taxpayers, but not for the – largely foreign – recipients). As David Turver says:

As well as 2024 being a record year overall, offshore wind received more subsidy than in any other year with £1.9bn paid out. Biomass conversion, a euphemism for burning trees, received £309m and biomass with combined heat and power (CHP) received a further £90m. Onshore wind received £73m and the two solar farms with active CfDs received just over £1m.

Incidentally, in December 2024, £260.3m was paid out in subsidies, the second highest month on record, with April 2024 being the highest at £269.8m.

Supporters of renewables often point out that when the market price of electricity is above the CfD strike price, then generators pay money back. This is true, but that was only significant in 2022 when a net £346m was repaid and compares to the net cost of the scheme of £9.6bn since inception.

The top thirteen CfD subsidy days all occurred in 2024, and a total of 16 days from the same year all appear in the Top-20. The day with the highest subsidy payments was 22 December 2024, with over £20m paid out in a single day. Offshore wind was the main recipient of this Government mandated largesse on that day, getting over £18.3m and biomass receiving over £1m.

The record subsidy days in December last year came despite elevated gas prices pushing up the reference price. The annual indexation of CfD strike prices with inflation means that as each year progresses, we are likely to see many more record subsidy days, especially if gas-prices fall back to more normal levels.

Let’s take a look at the recipients of the greatest sums of money.

Walney Offshore Wind Farm

Overall, Walney is the biggest recipient of CfD largesse, at almost £1.76Bn. In 2024 it was in second place for the year, receiving over £355 million. I wrote about Walney in Where Power Lies, saying this:

Another increasingly large offshore wind farm is that at Walney, comprising Walney I, Walney II and the Walney Extension, based 12 miles off the south Cumbrian coast.

While the 659MW facility, Walney Extension is co-owned by Orsted and Danish pension funds PFA and PKA, Walney I and II are apparently owned by Orsted (50.1%), SSE (25.1%) and OPW (24.8%). Orsted and SSE we have already met. OPW appear to be a wholly-owned subsidiary of the New York Stock Exchange Listed, Illinois based, Dover Corporation.

Ørsted, of course is a Danish company. Specifically (citing myself once more):

Ørsted has its origin in the Danish state-owned company Dansk Naturgas A/S. The company was founded in 1972 to manage gas and oil resources in the Danish sector of the North Sea. After some years, the company was renamed to Dansk Olie og Naturgas A/S (DONG), meaning Danish Oil and Natural Gas. At the beginning of the decade of the 2000s, DONG started to expand itself into the electricity market by taking long positions in electricity companies. In 2005, DONG acquired and merged Danish electrical power producers Elsam and Energi E2 and public utility (electricity distribution) companies NESA, Københavns Energi and Frederiksberg Forsyning. The result of the merger was the creation of DONG Energy.

Hornsea 1 Offshore Wind Farm

Hornsea 1 is part of a huge offshore wind farm. Over all time it lies in second place, behind Walney, having received almost £1.67Bn in total. However, it was the highest paid recipient of CfD largesse in 2024, receiving almost £540 million. When I wrote Where Power Lies, Hornsea 1 was, so far as I could tell, wholly-owned and operated by Ørsted. Since then it appears that the situation has changed. A visit to its website tells me that the offshore wind farm is owned by Ørsted (50%) as well as partners Greencoat, TRIG & Equitix, GLIL & Octopus Renewables. Greencoat, I assume is Greencoat Renewables PLC, whose website tells us is an owner and operator of renewable energy infrastructure assets in Europe. It is listed on the Euronext Growth Market of Euronext Dublin and the AIM market of the London Stock Exchange. Who the ultimate owners are at any one time therefore depends on day to day trading on those two Stock Exchanges. It is incorporated in the Republic of Ireland. According to its most recent Report & Accounts for the year ended 21^st December 2023, its principal shareholders at that date were:

BlackRock Inc (10.1%); KBI Global Investors (8.9%); FIL Investment International (7.3%); Brewin Dolphin Wealth Management (5.3%); Abrdn plc (5.1%); Irish Life Investment Managers (4.8%); Newton Investment Management (4.5%); Cantor Fitzgerald (3.7%: M&G Investment Management (3.3%); Davy Stockbroker (3.3%); and CCLA (3.1%).

What its precise ownership of Hornsea 1 might be is difficult to say – I can’t find it in the Hornsea 1 website and Greencoat’s Annual Report & Accounts don’t mention it.

As for the other part-owners, I can find no confirmation of their share of Hornsea 1 either, though TRIG’s website does tell us that it is “a London-listed investment company whose purpose is to generate sustainable returns from a diversified portfolio of renewables infrastructure that contribute towards a net zero carbon future.” According to its most recent Annual Report & Accounts (also to 31^st December 2023) its investment in Hornsea 1 accounts for approximately 10% of its portfolio, and TRIG is actually “a Guernsey-registered closed-ended investment company.” The Report & Accounts also disclose the following shareholders with more than 5% of TRIG’s shares:

Rathbones (11.70%); Quilter Cheviot (5.44%); and RBC Brewin Dolphin (5.02%).

Rathbones (11.70%); Quilter Cheviot (5.44%); and RBC Brewin Dolphin (5.02%).According to the website of Equitix, it is “a leading international investor, developer and fund manager in infrastructure”, whose majority shareholder is Tetragon Financial Group Limited, a Guernsey close-ended investment company, with non-voting shares listed on Euronext in Amsterdam and also traded on the Specialist Fund Segment of the Main Market of the London Stock Exchange. So the beneficiaries of its shareholding could be almost anyone, but I assume that wherever they live, they won’t be paying a lot of tax on the money they make out of it, given the fund’s Guernsey location. All voting shares of the Fund are held by Polygon Credit Holdings II Limited, which is described in its most recent Financial Statement as “a non-U.S. affiliate of the Investment Manager. The Investment Manager, Tetragon Financial Management LP, is registered as an investment adviser under the U.S. Investment Advisers Act of 1940, as is TFG Asset Management L.P., Tetragon’s diversified alternative asset management business. So that’s as clear as mud to anyone except investment experts.

GLIL is, I assume GLIL Infrastructure, whose website tells us that it “can offer investors exposure to high-quality, predictable and consistent cashflow generating assets in a range of sectors covering greenfield sites, regulated utilities and transport upgrades.” It is based in the UK and claims to be “an innovative collaboration between aligned and like-minded investors who are seeking investment into core infrastructure opportunities predominantly in the UK”. Make of that what you will.

I assume that Octopus Renewables is Octopus Renewables Infrastructure Trust plc, whose website tells us that it is “is an Impact Fund helping accelerate the transition to net zero. It is an investment company focused on providing investors with an attractive and sustainable level of income returns, with an element of capital growth, by investing in a diversified portfolio of Renewable Energy Assets across Europe, the UK and Australia”. It is is a London-listed closed-ended investment company incorporated in England and Wales. If its most recent interim report & accounts mentions its stake in Hornsea 1, I’m afraid I missed it. Quite telling is this from page 30 of the interim report:

The UK remains a favourable market for renewable energy investments, and even more so following the formation of the new Labour government in July 2024 and the policy measures that it has rapidly implemented…

…With a significant portion of its investments in the UK, including three developer investments focused on the UK market, ORIT is poised to benefit from the government’s strong support for renewable energy initiatives (the UK is ORIT’s largest single market, 40% of total value of all investments at 30 June 2024). The positive recent policy changes will support the industry and ORIT expects an acceleration in new projects coming to market over the coming years, as well as greater potential for CfD support for ready to build assets developed by Wind2 and BLCe.

Greater potential for CfD “support”, eh?

According to the most recent Annual Report & Accounts made up to 31^st December 2023, the most significant shareholder are:

Sarasin & Partners LLP (9.94%); Rathbone Investment Management Ltd (7.40%); Brewin Dolphin Limited (5.24%); Schroders plc (5.01%); Baillie Gifford & Co (5.00%); EFG Private Bank Limited (4.99%); Quilter Plc (4.29%); and Newton Investment Management Limited (3.06%).

Drax

Drax figures third in overall receipts (just short of £1.6Bn), though it fell to sixth place in terms of 2024 recipients of largesse from the taxpayer, receiving just over £216 million. For once it’s a UK company. If you want a laugh, you could visit its website, or if you want to read a more realistic version, you could try Jit’s The Beast of Selby. According to its most recent Annual Report & Accounts, however, its major shareholders were:

Bank of American Corporation (10.69%); Invesco Limited (9.71%); Schroders plc (9.64%); and Orbis Holdings Limited (5.01%).

Beatrice Offshore Wind Farm

Beatrice is in fifth place overall for the receipt of CFD payments, having received a total of £1.045Bn. In 2024 it was in third place, with CfD receipts of just under £270 million. As its website tells us, it is a joint venture between SSE Renewables (40%); Red Rock Renewables (25%); Trig (17.5%); and Equitix (also 17.5%). We have looked at TRIG and Equitix above. SSE Renewables is a subsidiary of London Stock Exchange quoted SSE plc. It may be quoted on the London Stock Exchange, but according to its most recent Annual Report & Accounts (for the year 2023/24), its major shareholders – by voting rights – are multinational: Black Rock Inc (7.44%); Barclays Bank PLC (5.22%); JP Morgan Chase & Co (5.2%); The Capital Group Companies Inc (4.9%); Invesco Limited (4.69%); Caisse de dépôt et placement du Québec (3.98%); Bank of America Corporation (0.43%).

As for the other joint venture partner in Beatrice, its website tries to tell us that Red Rock Renewables is a Scotland-based investor, developer, owner and operator of renewable energy projects. Scotland-based, perhaps, but Chinese-owned. As its website tells us, it is in fact “the European subsidiary of SDIC Power, a global energy company based in Beijing….SDIC Power Holdings Co., Ltd, is a listed company in Shanghai Stock Exchange (SH.600886), with State Development and Investment Corporation (SDIC), a State-Controlled Enterprise, holding 51.32% of its shares as of 2022.”

Dudgeon Offshore Wind Farm

Dudgeon features in fourth place in both the overall and 2024 CfD payments league tables, having received just under £234 million in 2024, and almost £1.22Bn overall. By the way, I recommend Jit’s piece, High Dudgeon to you, when you’re finished reading this. According to Dudgeon’s website:

Through the joint venture company Dudgeon Offshore Wind Limited, the wind farm is owned by Equinor, Masdar and China Resources (Holdings), and Equinor is its operator having developed the £1.4b power plant between 2012 and 2017.

Equinor is Norwegian-owned. According to its website:

In 1972, Statoil was formed by a decision of the Norwegian parliament and owned 100% by the Norwegian State. In 2001, Equinor was listed on the Oslo and New York stock exchanges with a 67% majority stake owned by the Norwegian State. In 2018 we changed our name to Equinor.

Well, you would change your name, wouldn’t you? Statoil isn’t likely to burnish your “green” credentials when you’re looking for UK “green” subsidies, is it?

Masdar is a United Arab Emirates Company. According to its website :

With three leading UAE energy champions as our shareholders – the Abu Dhabi National Oil Company (ADNOC), Mubadala Investment Company, and Abu Dhabi National Energy Company PJSC (TAQA) – Masdar is supporting the UAE’s transition toward a knowledge-based economy. A catalyst for renewable energy development in the Arab world over the past decade, Masdar is demonstrating how the business community can deliver on the global sustainability agenda.

I love this bit:

Abu Dhabi National Oil Company (ADNOC) is one of the world’s leading energy producers and a primary catalyst for the growth and diversification of the Abu Dhabi economy. With a production capacity of more than 4 million barrels of oil per day and 11.5 billion cubic feet of natural gas per day…

China Resources (Holdings) is a Chinese state-owned conglomerate, based in Hong Kong. Enough said.

EA1 Offshore Wind Farm

EA stands for East Anglia. Overall, it stands in 8^th place, with total CfD payments of more than £650 million. In 2024, it featured in fifth place, with payments in the year of more than £230 million.

As its website tells us, it is “a joint venture between ScottishPower Renewables and Macquarie’s Green Investment Group (GIG)”. Despite the name, Scottish Power is of course a wholly-owned subsidiary of Spanish Company Iberdrola, and indeed the website describes it as the largest wind farm in Iberdrola’s history. Who knows, perhaps it’s the one that makes it the most money in subsidies, too?

Macquarie, meanwhile, and its Green Investment Group, are Australian.

Burbo Bank Offshore Wind Farm

This is in 6^th place overall, with total CfD payments over the years of more than £700 million. In 2024, it was in 7^th place, with CfD payments of more than £124 million.

It is one of 12 operational wind farms in the UK or its offshore waters, owned by Ørsted, and is Danish.

Lynemouth Biomass

This (like Drax) is a former coal power station, converted to biomass. It’s in 7^th place overall, with total CfD payments of almost £675 million. In 2024 it was in 9^th place, with CfD payments in the year of more than £92 million. It is owned by Czech company, EPH (“We keep the remaining coal capacities operational solely to ensure security of supply in the near term, while we have a clear coal exit plan”). As for Lynemouth, it “uses sustainably-sourced, renewable wood pellets, primarily from the USA and Canada, which are transported to the UK by sea.” Right….

Triton Knoll Offshore Wind Farm

It doesn’t feature in the overall top ten, but its in 8^th place in 2024, with CfD payments of more than £108 million. As its website tells us: “The project is owned by RWE (59%) and partners J-Power (25%) and Kansai Electric Power (16%), with RWE responsible for operating and maintaining the wind farm”. RWE is a German company, based in Essen. J-Power is a subsidiary of Sumitomo Electric Industries, in Japan. Kansai Electric Power is also Japanese.

Teesside Biomass Plant

This features in 9^th place overall, with total CfD payments of more than £90 million. It’s in 10^th place in 2024, but it looks as if it will be moving up the overall rankings, as it received almost £88 million in 2024. It is owned by MGT Teesside Limited, a company limited in England, but if you looked no further, you would be misled. Its ultimate owner is the Australian company, Macquarie.

Dorenell Onshore Wind Farm

Dorenell is the poor relation among this company. It’s not in the 2024 top ten, and scrapes into the overall top 10 in tenth place, with CfD receipts of just under £45 million. It’s owned by EDF Renewables, a French company.

Ongoing foolishness

Hot off the press (or the online equivalent) the Herald today reports that the Scottish government is considering handing £60 million to two Chinese companies (Minyang Smart Energy and Orient Cable) to build wind farm factories in Scotland. Except that I don’t believe in any “net zero transition”, I’m with Lord Alton, when he asks:

What are we thinking of, handing over such important capability in the net-zero transition to an entity that comes from an authoritarian and hostile state, and doing so as the European Union is launching its antitrust investigation into Chinese turbine manufacturers?

Conclusion

When considering all the above money that is leaching out of the country, bear in mind that these are just the CfD payments, an absurdly large, but only one part of the overall subsidy regime. And of course, subsidies represent only some of the vast amounts of money we are paying for renewable energy. It’s bad enough that we are over-paying for energy. In addition, to damage our already weak balance of payments in an ongoing and growing manner, while making us dependent on foreign companies whose overriding objective is to make money (except possibly the Chinese companies, for whom national security objectives might rank higher) is absurd. This not what national financial or energy security looks like.