Financing the Green Transition: The Evolution of Contracts for Difference

“The CfD scheme in the UK has been very successful in driving successful deployment of renewables at scale while rapidly reducing costs. Whether it remains an interesting tool for projects that no longer need a subsidy but would benefit from price stabilisation remains to be seen, given that paying out monies when the strike price is below the wholesale price of electricity could be seen as paying out profits.

In relation to new and evolving technologies, the key will be for the CfDs to be able to continue to evolve. The next step to watch out for is which technologies will benefit from the 12GW of capacity that will be available in the next CfD auction in 2021 and thereafter how CfDs can help encourage the hydrogen revolution.”

Read Victoria’s full take in Financier Worldwide here.