EU Electricity Market reform: BEE warns again for »Contracts for Difference«

In the context of the reform of the European electricity market, the German Renewable Energy Federation (BEE) has reiterated its rejection of Contracts for Difference (CfD). This concept, which is being discussed by the European Commission, is a »planned economy model«, according to BEE, and could only »support an incipient market ramp-up of technologies under certain conditions.« Renewable energies, however, could already »take over the central role in the electricity market« today.
In CfD models, electricity producers receive compensation if the price they achieve in trading is below the agreed amount; any surpluses, on the other hand, must be refunded. This, the BEE criticizes, would cut off »price signals« and thus block economic opportunities. The BEE argues that price signals are urgently needed, especially for flexible producers »such as green cogeneration, hydropower and bioenergy plants, storage facilities and sector coupling technologies.«
Earlier this week, the European Commission launched a consultation process on reforming electricity market design in the EU. The proponents of CfD models see in particular the opportunity to offer plant operators the prospect of a guaranteed level of remuneration and at the same time to block exorbitantly high profits, as they are currently occurring due to the distortions on the electricity market.
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