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CfDs can pave the path for investment in clean energy for the U.K., says S&P in Responsible Investor

cfdsAs the U.K. looks to source more of its electricity from clean, low-carbon sources, Michael Wilkins, Managing Director of Infrastructure Finance at Standard & Poor’s argues that the ‘Contract for Difference’ (CfD) scheme will play a vital role in encouraging the investment such power projects need.

Writing for specialist magazine, Responsible Investor, Wilkins explains that with older carbon-heavy power plants increasingly becoming decommissioned, significant investment is needed to support the growth of the renewable sector in order to fill the inevitable gap. To this end, Wilkins explains that the U.K. needs to reform its energy market in order to incentivise such investment – here, a government provided CfD can mitigate demand and price risks by establishing a fixed “strike price”, providing revenue stability.

To read the article in full, please click here (please note this lies behind a paywall).

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