On 5 March, Senior Consultant/Principal Clemens Koenig will speak at the Franco-German Office for the Energy Transition (DFBEW/OFATE) virtual conference in a session titled “The Development and Future of Market Premium Contracts for Onshore Wind Projects in Germany.” Market premium contracts have been instrumental in facilitating the large-scale deployment of onshore wind projects in Germany to date. They support and de-risk renewable energy projects by providing certain types of “premium” payments, complementing projects’ market income.

Unlike many other European countries, Germany has so far opted for a “one-sided” premium, meaning projects receive premium payments in case of low electricity prices but can keep the “upside” from high prices.

In light of the need to facilitate further large-scale deployment of onshore wind capacity to attain ambitious decarbonization targets for the electricity sector, Dr. Koenig will analyze the case for moving to a “two-sided” market premium contract. He will also review recent proposals to make two-sided premium contracts less distortive when it comes to projects’ investment and dispatch decisions.