Thread by @LionHirth

As we will talk more about split markets for electricity in the coming days let's recap a few issues with the Greek proposal of July.

#Servicetweet

euractiv.com/section/electr…

First, it erases dispatch signals for pool generators. With so many generators in the pool, including nuclear and fossil, combined heat and power, this large and diverse group of techs receives no dispatch signals.

Second, the proposal essentially outlaws market-based renewables. The CFD is mandatory, so investments outside the scheme are no longer possible. In our view, this would be a huge mistake.

Third, the scheme dilutes price signals for the demand side. Consumers pay a constant price for energy from the CFD pool, so the price seen is a mix between pool generators’ levelised cost (LCOE) and marginal cost.

Fourth, imposing CFDs on existing generators is likely to be challenging. It is quite unclear how strike prices should be determined for existing generators.

4) is something that can be solved with money.

1) through 3) seem pretty fundamental to me.

Full text: euractiv.com/section/electr…