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| Srl | Item |
| 1 |
ID:
192712
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| Summary/Abstract |
We develop a concept to identify and quantitatively assess technology selection bias in multi-technology renewable energy auctions. We show that simple price rules are insufficient to efficiently select winning projects in multi-technology tenders when they incorporate individual costs of producers only, and exclude system effects, market benefits and external costs. With our concept of quantifying unit social value, all relevant external elements can be incorporated in the evaluation. The introduction of an objective measure (as difference of differences between unit social value and auction bid prices) allows the quantitative assessment of systematic selection bias between technologies under different remuneration designs. We illustrate our concept by applying it to generic European renewable energy technologies (wind and solar energy) and major applied remuneration types (contract-for-difference and fixed premium schemes). We also show that are concept is applicable for real auction data, by presenting a case study about Italy. The main conclusion of the study is that selection by price only, can constitute a systematic bias for all investigated remuneration designs. Both schemes are in our case biased toward a given technology. The internalisation of external cost may not necessarily lead to better social outcomes in the selection of auction winners, as it can be overshadowed by the initial bias of the chosen remuneration design. We conclude that considerate design, including the potential differentiation of rules, e.g., through introduction of a technology bonus, to minimise selection bias, and careful monitoring of the competitive situation between participating technologies in a multi-technology auction are required to ensure efficient selection.
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| 2 |
ID:
186413
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| Summary/Abstract |
Auctions for renewable energy support allocation are on a triumphant global advance. We compare performance of renewable energy auctions in terms of effectiveness (realisation rate and period) and efficiency (price outcomes) from two world regions: South Africa and European countries (Germany, France, the Netherlands). We develop an assessment framework for compliance incentivisation in auction design, covering qualification criteria, penalties, and compliance monitoring. We find that a 100% realisation rate in South Africa is connected to a strong compliance package, while European countries have moderate realisation rates (23%–87%) with relatively lenient compliance packages. We observe that realisation periods are correlated with project size rather than granted realisation period. Although South African projects generally have longer realisation periods (34 months for PV and 40 months for onshore wind) than European projects (16.5–30 months for PV and 19–25 months for onshore wind), they perform comparably considering that they are 10–13 times larger. Comparing average auction prices with equivalent technology-specific LCOE estimates, we find a general convergence towards the global average, with South Africa having the sharpest price decline (75% PV and 54% onshore wind), albeit starting from the highest level. Our findings, especially on importance of compliance incentivisation and weak impact of granted realisation periods, are valid across world regions and can support policymakers everywhere in designing effective and efficient renewable energy auctions.
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