Electricity market design reform—schemes for low-carbon generation
As part of its proposals for reform of the electricity market design, the Commission has proposed that any low-carbon generation that requires financial support from governments should be supported by two-way Contracts for Difference (CfDs) or other mechanisms that provide, in addition to a revenue guarantee, an upper limit on the revenues that generators can earn.
The Commission is also seeking to ensure that generators can access the market independently of government support and is therefore looking to expand the size of the Power Purchase Agreement (PPA) market.
This note summarises the measures that the European Commission has proposed to replace existing support schemes for low-carbon generation and expand the PPA market. It then sets out the main implications of these measures for generators.