Posters
Come meet the poster presenters to ask them questions and discuss their work
We would like to invite you to come and see the posters at our upcoming conference. The posters will showcase a diverse range of research topics, and will give delegates an opportunity to engage with the authors and learn more about their work. Whether you are a seasoned researcher or simply curious about the latest developments in your field, we believe that the posters will offer something of interest to everyone. So please join us at the conference and take advantage of this opportunity to learn and engage with your peers in industry and the academic community.
On 9 April at 17:15, we’ll also hold the main poster session and distinguish the 7 best posters of this year’s edition with our traditional Poster Awards Ceremony. Join us at the poster area to cheer and meet the laureates, and enjoy some drinks with all poster presenters!
We look forward to seeing you there!
PO101: Will the mandatory use of two-way contracts-for-difference threaten forward market liquidity? A novel modelling approach
Fabian Wagner, PhD Student, DTU
Abstract
With the objective of tackling the climate as well as the energy crisis, EU governing bodies broad a reform of the European electricity markets underway. Among other things, they agree to mandate so-called two-way contracts-for-differences (CfDs) (or equivalent contracts), if member states decide to give direct price support to intermittent renewable energy sources. This has raised concerns about potential negative effects on the liquidity of market-based long-term contracts. In front of this background, we developed a comprehensive model which quantifies expected forward market volumes for the German trading zone until 2050. The results show that average historical liquidity levels are unlikely to be retained, even without the introduction of CfDs. Yet, CfDs can reduce hedging needs and thereby market liquidity. The magnitude of this crucially depends on how CfDs are implemented, as different designs alter the volume of installations under CfDs as well as their incentives. Trade-offs between design elements emerged and given churn rates can be obtained through different configurations. Most relevant for the current debate, the model does not predict liquidity to fall beneath minimum requirements for most of the analysed scenarios. This makes us conclude that, while the broader deployment of CfDs is likely to reduce the liquidity of hedging markets, it does not pose a threat to their functioning. Hence, the effect of CfDs on market-based long-term contracts should be considered in their design but not prevent their wider use.
No recording available for this poster.
