Gas, Power and Carbon Markets
De-risking the energy transition — from gas and power to carbon
Since the energy crisis of 2022, European energy markets have faced unprecedented volatility , creating unique exposures:
- Mark-to-market credit risk: long-term contracts (up to 10 years for electricity) expose market participants to potential counterparty default. Cofarco has been a pioneer in insuring this type of exposure since 2017.
- Environmental certificates and carbon credits: these emerging markets carry risks comparable to gas and power trading, with buyer default a growing concern not yet fully addressed by traditional brokers.
- Power Purchase Agreements (PPAs): while they secure prices and supply, PPAs create cross-credit risk between renewable producers and corporate buyers.
In these markets too, surety instruments, alongside credit insurance, are a valuable source of liquidity and bankability, particularly in the financing of renewable projects and long-term energy contracts