The CfD preserves efficient dispatch incentives, even when prices are low: a plant will choose not to generate when prices are below its marginal cost. For example, say the assumed marginal costs of the reference plant is zero. Thus, the reference plant is expected to dispatch even when prices are only just above zero. Say for example a 1MW plant with CfD has a marginal cost of €4/MWh, and prices for a particular hour are €2/MWh. If it dispatches, it incurs costs of €4 and gains revenues of €2, which it is obliged to pay back. Dispatching, therefore, leaves it with a loss of €4. If, on the other hand, it elects not to dispatch, it does not incur the marginal costs of €4 and does not earn market revenues of €2, but it is still obliged by the CfD to pay back €2. Not dispatching, therefore, leaves it with a loss of €2. The plant compares the two scenarios and chooses not to dispatch.

Welcome to the Power System Blueprint!

Climate neutrality requires the full decarbonisation of the power sector. As this is one of Europe’s biggest challenges today, there is a need for speed.

The Power System Blueprint lays out how to design the regulatory context to achieve a clean, reliable, equitable and affordable European power system by 2035. The Regulatory Assistance Project (RAP) pulled together the latest insights to support regulators, NGOs, governments and anyone pursuing a decarbonised European power system.

Quick guide on how to use this website:

  • The Blueprint is a schematic of regulatory solutions linked to six important central principles.
  • In the suite of regulatory solutions (also known as factsheets), you will find comprehensive information, the most important regulatory steps and further reading.
  • You can systematically work through the whole Blueprint, only select specific solutions or start from one of the eight main barriers (see barriers menu at the bottom of the homepage). Choose your own path!

You can start exploring the Blueprint right away or read more about the context.