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This seems unrealistic. The suggestion is to switch to 25 year contracts for a commodity? With current inflation uncertain and future inflation a pure guess a
by OrangeMonkey 4y ago
This seems unrealistic. The suggestion is to switch to 25 year contracts for a commodity?
With current inflation uncertain and future inflation a pure guess and the consumption rate of these resources unknown in the future, I have no idea who would sign this statement.
Europe literally just shut down LNG derivatives market and gave an emergency loan to the counterparties doing what is suggested because they are going bankrupt and can't fulfill their obligations. This doesnt make sense.
- makomk 4y agoThe UK's CfDs are adjusted for inflation each year, so that's not an issue, and the cost of specific renewable energy installations is much more predictable than natural gas - most of the cost is paid up front to construct them in the first place. The difficult part is that there isn't really any market-based way to set the price after the fact; the way the UK does it is via a reverse auction where anyone whose bid is too high doesn't get to build their wind farm, and that obviously doesn't work if it's already built.