Title page
Contents
Executive summary 1
1. Clarity in supply, uncertainty in demand 2
2. Allocating renewable investment risk 4
3. Stylised scenario analysis 7
4. How should CfD costs be recovered? 10
5. Electricity supply and demand synchronisation 14
6. Conclusions 14
References 16
Table 1. DISC modelling scenarios 8
Figure 1. Projected annual EU renewable capacity installations vs. renewable targets 2
Figure 2. Future European electricity demand is uncertain 3
Figure 3. Most clean-electricity investment is state-backed (installed capacity, 2023-2024) 4
Figure 4. CfD design from the generator and state perspectives 5
Figure 5. Annual CfD liability increases with falling demand 8
Figure 6. The change in spot market price with falling demand depends on the generation mix 9
Figure 7. Wholesale costs are inversely proportional to CfD costs 10
Figure 8. Illustrative 2030 EU5 household electricity cost components: current approach 11
Figure 9. Illustrative 2030 EU5 household electricity cost components: even approach 12
Figure 10. How CfD costs are recovered could significantly affect final consumer prices 13
Boxes
Box 1. DISC 7