20 May 2025
Recommendation on the design of two-sided Contracts for Difference
The revised Electricity Market Regulation makes two-sided Contracts for Difference (CfDs) as the default state aid mechanism, while granting Member States flexibility in their design. To meet the EU’s 2030 wind targets, these CfDs must be carefully designed to reduce project-level risks, ensure bankability, and maintain market competitiveness. Well-designed two-sided CfDs should also enhance system performance, encourage market-responsive behaviour from wind farms, while supporting timely grid development.
This paper discussed two main designs under consideration: generation based and generation independent two-sided CfDs. It outlines WindEurope’s recommendations on key implementation factors that governments should thoroughly evaluate before selecting the appropriate CfD design.
