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Renewables are heavily effected by capital costs. So a renewable energy scheme selling at wholesale prices may sometimes be ridiculously profitable. But it will also have higher interest rates that could wipe out that benefit for the developer. The more successful renewable energy is the lower the average wholesale price is likely to be. And the temporary peaks are likely to correlate with times where the weather conditions will reduce renewable output.

All these reasons make CfD's positive for both consumers and developers. The fact that schemes can be developed outside of this just shows how good the technology is.

"sunlight is free"

This is the UK btw...

that is the idea

but under the cfd mechanism the treasury takes the excess over the strike price

It does. It's basically scamming taxpayer into funding private companies renewable investments.

https://news.ycombinator.com/item?id=46982694 It's not a scam. Interesting your mind went there though. We know what you're about.