Contracts for Difference to enable Germany's planned »industrial power price«

The »industrial power price« proposed by Germany’s Federal Ministry of Economics and Climate Protection (BMWK) would, among other things, allow energy-intensive companies to access electricity from newly constructed renewable energy plants at prices »close to the production costs« and that these plants would therefore be financed via Contracts for Difference (CfD). In a BMWK release on the working paper presented on Friday (May 5), it is further stated that the conclusion of power purchase agreements (PPAs) should be secured with guarantees in this context, following the example of Norway, »in order to reduce the risk premium of these contracts.«
Until such long-term concepts for a »transformation power price« take effect, short-term measures should produce quicker results. »For a clearly defined group of recipients«, the BMWK proposes a »bridge power price« of six Euro cents (¢ 6.6) per kilowatt hour for 80 percent of consumption: If power exchange prices are above this limit on an annual average, companies are to be reimbursed for the difference. However, there are to be »clear obligations« for the use of such aid, in particular tariff compliance for wages and salaries, a transformation obligation and location guarantees.

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