Contracts for difference support the expansion of renewable energy sources while reducing electricity price risks

Artikel

The German Federal Government passed the "Easter Package" in July 2022, which envisages a number of measures for the expansion of renewable energy sources. The package retains sliding market premiums as a remuneration mechanism, which protect electricity producers unilaterally, while contracts for difference (CfDs), which also protect electricity customers, are only used in the offshore wind sector. However, CfDs could lead to a reduction in financing costs and reduce electricity price risks for producers as well as households and companies. The decline in financing costs would strengthen the expansion of renewable energy sources. In this context, a simplified market value model and further developing the reference yield model could ensure a system-friendly expansion of renewable energy sources.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Journal: DIW Weekly Report ; ISSN: 2568-7697 ; Volume: 12 ; Year: 2022 ; Issue: 35/36 ; Pages: 205-213 ; Berlin: Deutsches Institut für Wirtschaftsforschung (DIW)

Classification and Topics

• Classification: Wirtschaft ; Energy: General ; Energy: Demand and Supply; Prices ; Alternative Energy Sources ; Energy: Government Policy ; Auctions ; Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
• Subject: Contracts for Differences ; Renewable Energy ; Support Mechanisms

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Kröger, Mats ; Neuhoff, Karsten ; Richstein, Jörn C.
• Event: Veröffentlichung
• (who): Deutsches Institut für Wirtschaftsforschung (DIW)
• (where): Berlin
• (when): 2022

Further information

• DOI: doi:10.18723/diw_dwr:2022-35-1
• Handle: http://hdl.handle.net/10419/264921
• Last update: 10.03.2025, 11:43 AM CET