Arbeitspapier
Financial Contracts for Differences
Contracts for differences are widely discussed as a cornerstone of Europe’s future electricity market design. This is a paper on CfD contract design. We summarize the dispatch and investment distortions that conventional CfDs cause, the patches that are used to overcome these shortcomings, and the problems these fixes introduce. We then propose an alternative contract that we dub “financial” CfD. It is a hybrid between conventional CfDs and forward contracts that mitigates revenue risk to a very large degree while providing undistorted incentives and avoiding margin calls. Like traditional CfDs, these contracts are long-term and tailored to technology-specific (wind, solar, nuclear) generation patterns but, like forwards, decouple payments from actual generation. We also propose to mitigate volume risk and to accept physical assets as collateral to avoid margin calls.
- Sprache
-
Englisch
- Erschienen in
-
doi:10.1016/j.enpol.2024.113981
- Klassifikation
-
Wirtschaft
- Thema
-
renewable energy
contracts for differences
CfDs
electricity
- Ereignis
-
Geistige Schöpfung
- (wer)
-
Schlecht, Ingmar
Maurer, Christoph
Hirth, Lion
- Ereignis
-
Veröffentlichung
- (wer)
-
ZBW - Leibniz Information Centre for Economics
- (wo)
-
Kiel, Hamburg
- (wann)
-
2023
- Handle
- Letzte Aktualisierung
-
10.03.2025, 11:43 MEZ
Datenpartner
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. Bei Fragen zum Objekt wenden Sie sich bitte an den Datenpartner.
Objekttyp
- Arbeitspapier
Beteiligte
- Schlecht, Ingmar
- Maurer, Christoph
- Hirth, Lion
- ZBW - Leibniz Information Centre for Economics
Entstanden
- 2023
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