“Contracts for difference are our preferred instrument” Interview with Catrin Jung, Vattenfall Europe GmbH

In the following interview, Catrin Jung, Head Of Business Unit Offshore at Vattenfall / Vice Chair of the Management Board at the German Federal Association of Offshore Wind Farm Operators [BWO], explains the advantages of “contracts for difference” (CFD) for the offshore wind industry.

Renewable Energy Hamburg: The BWO heavily endorses the introduction of CFDs. Why? What do you see as the advantages?

Catrin Jung: “CFDs are our preferred instrument. They allow for inexpensive financing and cheap electricity prices for consumers due to the resulting lower bid amounts. Politics can safely manage the expansion and diversity of stakeholders by using CFDs.”

Renewable Energy Hamburg: In what countries have mainly CFDs already been concluded and why?

Catrin Jung: “CFDs are used in many countries throughout Europe – for many years in the UK, also in France and soon in Denmark and Poland as well. In France and the UK, for example, it has been found that the bid amounts are below the electricity prices expected in the future and therefore the wind farm operators will repay money to the regulator in the future.”

Renewable Energy Hamburg: What alternatives are there to CFDs, in your opinion?

Catrin Jung: “At Vattenfall, we have experience with ‘beauty contests’, as in the Netherlands, where the awarding of a contract is based on criteria, and certificate systems with the possibility of independent project development, as in Sweden. Both are more disadvantageous, in our opinion.”