Unlocking the power of CfDs to accelerate the energy transition

The Electricity Market Design reform highlighted the need for an appropriate investment framework to support capital-intensive large-scale investment in clean and flexible resources

In the flagship study “Electricity market design, Fit for Net Zero”, Eurelectric and Compass Lexecon defined high-level recommendations on CfDs and other types of long-term contracts, stressing that guidance for the design of public de-risking schemes should be developed on best practices.

The recent reform of the electricity market design puts forward two-sided CfDs(and equivalent schemes) as the single support mechanism for direct price support to new capacity. However, the reform leaves a range of design issues open.

Against this backdrop, ‘Unlocking the power of CfDs to accelerate the energy transition’:

–Highlights key challenges and trade-offs associated with design and implementation of two-way CfDs for RES and low-carbon technologies

–Includes a range of alternatives addressing these key challenges

–Provides guidance on best practices to design an efficient CfD

This document is the executive summary of an extensive report available upon request