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Financial twins: adapting long-term contract designs to new electricity systems

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  • Louis Soumoy
  • Ibrahim Abada
  • Andreas Ehrenmann
  • Olivier Massol

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  • Louis Soumoy & Ibrahim Abada & Andreas Ehrenmann & Olivier Massol, 2025. "Financial twins: adapting long-term contract designs to new electricity systems," Working Papers EPRG2525, Energy Policy Research Group, Cambridge Judge Business School, University of Cambridge.
    • Handle: RePEc:enp:wpaper:eprg2525
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    References listed on IDEAS

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    1. Frank A. Wolak, 2022. "Long-Term Resource Adequacy in Wholesale Electricity Markets with Significant Intermittent Renewables," Environmental and Energy Policy and the Economy, University of Chicago Press, vol. 3(1), pages 155-220.
    2. Boonstra, Boris C. & Oosterlee, Cornelis W., 2021. "Valuation of electricity storage contracts using the COS method," Applied Mathematics and Computation, Elsevier, vol. 410(C).
    3. R. H. Coase, 2013. "The Problem of Social Cost," Journal of Law and Economics, University of Chicago Press, vol. 56(4), pages 837-877.
    4. Waidelich, Paul & Krug, Joscha & Steffen, Bjarne, 2025. "Mobilizing credit for clean energy: De-risking and public loan provision under learning spillovers," Journal of Environmental Economics and Management, Elsevier, vol. 133(C).
    5. Lebeau, Alexis & Petitet, Marie & Quemin, Simon & Saguan, Marcelo, 2024. "Long-term issues with the Energy-Only Market design in the context of deep decarbonization," Energy Economics, Elsevier, vol. 132(C).
    6. Shu, Han & Mays, Jacob, 2023. "Beyond capacity: Contractual form in electricity reliability obligations," Energy Economics, Elsevier, vol. 126(C).
    7. Michael Magill & Martine Quinzii, 2002. "Theory of Incomplete Markets, Volume 1," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262632543, December.
    8. de Maere d’Aertrycke, Gauthier & Ehrenmann, Andreas & Smeers, Yves, 2017. "Investment with incomplete markets for risk: The need for long-term contracts," Energy Policy, Elsevier, vol. 105(C), pages 571-583.
    9. Jean-Jacques Laffont & Jean Tirole, 1993. "A Theory of Incentives in Procurement and Regulation," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262121743, December.
    10. Andreas Ehrenmann & Yves Smeers, 2011. "Stochastic Equilibrium Models for Generation Capacity Expansion," International Series in Operations Research & Management Science, in: Marida Bertocchi & Giorgio Consigli & Michael A. H. Dempster (ed.), Stochastic Optimization Methods in Finance and Energy, edition 1, chapter 0, pages 273-310, Springer.
    11. Ibrahim Abada & Julien Ancel, 2025. "Capacity investment decisions in equilibrium: a distributionally robust approach," Post-Print hal-05191310, HAL.
    12. Schlecht, Ingmar & Maurer, Christoph & Hirth, Lion, 2024. "Financial contracts for differences: The problems with conventional CfDs in electricity markets and how forward contracts can help solve them," Energy Policy, Elsevier, vol. 186(C).
    13. Ibrahim Abada & Gauthier de Maere d'Aertrycke & Yves Smeers, 2017. "On the multiplicity of solutions in generation capacity investment models with incomplete markets: a ris-averse stochastic equilibrium approach," LIDAM Reprints CORE 2909, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
    14. Ibrahim Abada & Julien Ancel, 2025. "Capacity investment decisions in equilibrium: a distributionally robust approach," Grenoble Ecole de Management (Post-Print) hal-05191310, HAL.
    15. RALPH, Daniel & SMEERS, Yves, 2015. "Risk trading and endogenous probabilities in investment equilibria," LIDAM Reprints CORE 2727, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
    16. Gauthier DE MAERE D’AERTRYCKE & Andreas EHRENMANN & Yves SMEERS, 2017. "Investment with incomplete markets for risk: the need for long-term contracts," LIDAM Reprints CORE 2849, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
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    JEL classification:

    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • C73 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Stochastic and Dynamic Games; Evolutionary Games
    • Q41 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Demand and Supply; Prices

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