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Contracts for differences are widely seen as a cornerstone of Europe's future electricity market design. This paper is about designing such contracts. We identify the dispatch and investment distortions that conventional CfDs cause, the patches used to overcome these shortcomings, and the problems these fixes introduce. We then propose an alternative contract we call “financial” CfD. This hybrid between conventional CfDs and forward contracts mitigates revenue risk to a substantial degree while providing undistorted incentives. Like conventional CfDs, it is long-term and tailored to technology-specific (wind, solar, nuclear) generation patterns but, like forwards, decouples payments from actual generation. The proposed contract mitigates volume risk and avoids margin calls by accepting physical assets as collateral.
The global energy system is undergoing a major transition, and in energy planning and decision-making across governments, industry and academia, models play a crucial role. Because of their policy relevance and contested nature, the transparency and open availability of energy models and data are of particular importance. Here we provide a practical how-to guide based on the collective experience of members of the Open Energy Modelling Initiative (Openmod). We discuss key steps to consider when opening code and data, including determining intellectual property ownership, choosing a licence and appropriate modelling languages, distributing code and data, and providing support and building communities. After illustrating these decisions with examples and lessons learned from the community, we conclude that even though individual researchers' choices are important, institutional changes are still also necessary for more openness and transparency in energy research.
The quality of electricity system modelling heavily depends on the input data used. Although a lot of data is publicly available, it is often dispersed, tedious to process and partly contains errors. We argue that a central provision of input data for modelling has the character of a public good: it reduces overall societal costs for quantitative energy research as redundant work is avoided, and it improves transparency and reproducibility in electricity system modelling. This paper describes the Open Power System Data platform that aims at realising the efficiency and quality gains of centralised data provision by collecting, checking, processing, aggregating, documenting and publishing data required by most modellers. We conclude that the platform can provide substantial benefits to energy system analysis by raising efficiency of data pre-processing, providing a method for making data pre-processing for energy system modelling traceable, flexible and reproducible and improving the quality of original data published by data providers.