The Concept of Contracts for Difference (CfDs) and their Impact on the Signing of PPAs
摘要
In order to enable market participants to manage location risk price differences, Nord Pool introduced CfDs in November 2000, this type of contract having the purpose to hedge against price changes by area over time. In addition, due to fact that urgent need to support vulnerable consumers existed, but themselves subject to fiscal constraints, governments have brought in revenue caps for generators. Being hedged against electricity price developments by long-term contracts would allow governments to support consumers during high-price periods, without such ad-hoc revenue recovery interventions existing the possibility to harm long-run investments.