The payout was necessary to make up the difference between the fixed prices set in the generators' 15-year contracts with the government and the actual wholesale prices, which were lower. This emphasises the potential conflict between the UK government's agenda to cut carbon emissions from the grid as quickly as possible while reducing bills for consumers.

With a record number of wind farms due to come online this decade, there is a risk that public costs will continue to rise, hampering efforts to drive economic growth and electrification. Last year's subsidy was 13% higher than that in 2020, according to data from the government-owned Low Carbon Contracts Company Ltd.

Too much, too fast

"The risk of clean energy is that you try to do everything at once, too quickly, and that leads to higher prices in the long run," said Tom Betts, an analyst at Aurora Energy.

The cost of subsidising generation comes on top of the rising cost of dealing with grid inadequacies. These so-called congestion payments will exceed £1.7bn this year, according to the grid operator's forecast data.

Much of this money will be spent on switching off distant wind farms in Scotland, which will not be able to deliver power across a congested grid, and then switching on other sources of electricity, often gas-fired power stations, closer to towns and cities in England.

Wave of investment through contracts for difference

The UK pioneered the introduction of a support system that sets fixed prices for electricity generated by wind farms. If wholesale prices are lower than the contract price, turbine owners receive a subsidy.

This government-backed security, known as a contract for difference, helps to reduce the cost of capital and has triggered a wave of investment in recent years.

If wholesale prices are higher than the contract allows, the producer pays back the excess revenue and ultimately helps to reduce consumers' bills.

The contracts are used to support other technologies such as biomass and the Hinkley Point C nuclear power station currently under construction.

Absurd market design

When wholesale prices are at their lowest, the country spends the most money on wind farm owners to get paid their contracted amount. But as electricity prices have skyrocketed in recent months due to the cost of natural gas, some of the newest and cheapest wind farms have started to go in the other direction.

From October to January, the Hornsea 2 wind farm developed by Ørsted A/S off the coast of eastern England and the Moray East wind farm off northern Scotland paid back a total of £25 million, according to LCCC data.

However, this is a fairly small rebate compared to the £573 million in subsidies paid over the same period. Many sites currently under contract are older and fetch higher prices because they were built when the technology was new and very expensive.