Low-carbon financing: long-term contract options
Note · 18 January 2026. CfD, PPA, guarantees: how to reduce risk, protect consumers and remain EU-compatible.
Problem
Capital-intensive low-carbon technologies face financing costs that are sensitive to volatility and regulatory uncertainty.
Tools
- CfD: stabilise the price, share the gains.
- PPA: direct contracts (industry/energy)
- Guarantees: lower risk (construction, market)
Safeguards
- Transparency on parameters.
- Pre-defined revisions (not ad hoc).
- Compatibility with competition and state-aid rules.
"Amendments" format (example)
Introduce a provision authorising long-term contracts for dispatchable low-carbon technologies, subject to transparency, competition and evaluation requirements.