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1. Direct price support schemes for investment in new power-generating facilities for the generation of electricity from the sources listed in paragraph 4 shall take the form of two-way contracts for difference or equivalent schemes with the same effects. The first subparagraph shall apply to contracts under direct price support schemes for investment in new generation concluded on or after 17 July 2027, or, in the case of offshore hybrid asset projects connected to two or more bidding zones, 17 July 2029. The participation of market participants in direct price support schemes in the form of two-way contracts for difference and in equivalent schemes with the same effects shall be voluntary.

2. All direct price support schemes in the form of two-way contracts for difference and equivalent schemes with the same effects shall be designed to:

(a) preserve incentives for the power-generating facility to operate and participate efficiently in the electricity markets, in particular to reflect market circumstances;

(b) prevent any distortive effect of the support scheme on the operation, dispatch and maintenance decisions of the power-generating facility or on bidding behaviour in day-ahead, intraday, ancillary services and balancing markets;

(c) ensure that the level of the minimum remuneration protection and of the upward limit to excess remuneration are aligned with the cost of the new investment and the market revenues, to guarantee the long-term economic viability of the power-generating facility while avoiding overcompensation;

(d) avoid undue distortions to competition and trade in the internal market, in particular by determining remuneration amounts through an open, clear, transparent and non-discriminatory competitive bidding process; where no such competitive bidding process can be conducted, two-way contracts for difference or equivalent schemes with the same effects, and the applicable strike prices, shall be designed to ensure that the distribution of revenues to undertakings does not create undue distortions to competition and trade in the internal market;

(e) avoid distortions to competition and trade in the internal market resulting from the distribution of revenues to undertakings;

(f) include penalty clauses applicable in the case of undue unilateral early termination of the contract.

3. In the assessment of two-way contracts for difference or equivalent schemes with the same effects under Articles 107 and 108 TFEU, the Commission shall ensure compliance with the design principles pursuant to paragraph 2.

4. Paragraph 1 shall apply to investment in new generation of electricity from the following sources:

(a) wind energy;

(b) solar energy;

(c) geothermal energy;

(d) hydropower without reservoir;

(e) nuclear energy.

5. Any revenues, or the equivalent in financial value of those revenues, arising from direct price support schemes in the form of two-way contracts for difference and equivalent schemes with the same effects referred to in paragraph 1 shall be distributed to final customers. Notwithstanding the first subparagraph, the revenues, or the equivalent in financial value of those revenues, may also be used to finance the costs of the direct price support schemes or investment to reduce electricity costs for final customers. The distribution of revenues to final customers shall be designed to maintain incentives to reduce their consumption or shift it to periods when electricity prices are low and not to undermine competition between electricity suppliers.

6. In accordance with Article 4(3), third subparagraph, of Directive (EU) 2018/2001, Member States may exempt small-scale renewables installations and demonstration projects from the obligation under paragraph 1 of this Article.