Elementum Energy is testing a mechanism to stabilise electricity prices

Under the terms of the contract, the parties agree on a "price corridor" – a range within which market fluctuations do not trigger additional payments between the producer and the consumer. If the market price exceeds the upper limit or falls below the lower limit, the difference is compensated by the respective party. Thus, if the price exceeds the upper limit, the producer compensates the consumer for the difference, and if the price falls below the corridor, the consumer compensates the producer. The calculations are based on an indicative price indicator (e.g., the basic DAM index) specified in the contract and the agreed volume of electricity. At the same time, there is no physical supply of electricity, and all transactions are carried out in the open market.
This approach minimises volatility risks for both parties and enables effective cost planning in the energy market.
This pilot project will test the viability of the CfD mechanism in the conditions of the current regulation of the Ukrainian energy market.