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| 1 |
ID:
192709
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| Summary/Abstract |
Auctions are a widely used policy instrument to support the deployment of renewable energies (RE). Yet, their complex design raises concerns about explicitly or implicitly discriminatory effects against particular technologies. Such discriminatory effects would distort fair competition, reduce economic efficiency, and potentially violate European Union law.
Several studies analysed discriminatory auction design from a theoretical and simulation perspective but actual empirical evidence is limited. Here, we demonstrate the existence of technology discrimination in European RE auctions empirically. We apply a fractional logit model to empirically measure the impact of various auction design elements on the success of two technologies, solar PV and onshore wind, based on 57 European multi-technology RE auctions from 2011–2021.
Our results confirm the existence of discriminatory effects of several auction design elements in RE auctions, such as installation size restriction, support duration, realisation period, ceiling price, and financial prequalification. The results are stable against various robustness checks such as varying the countries included, the time frame, and the composition of the regions controlled for.
Our findings advance the understanding of explicitly and implicitly discriminatory effects against particular technologies in multi-technology auctions and we propose steps to reduce technology discrimination in future multi-technology RE auctions.
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| 2 |
ID:
186414
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| Summary/Abstract |
An increasing number of countries use auctions to allocate support for renewable energies. One major objective of policymakers when designing auctions is support cost efficiency, i.e., achieving low awarded prices. Based on a holistic database with auction outcomes from Europe covering the years 2012–2020, we conduct a fixed effects panel data regression to assess the effects of several auction design elements on the awarded prices. According to our results, policymakers aiming for low prices in renewable energy auctions should avoid restricting auctions to small-scale projects, implement ceiling prices, and ensure high levels of competition. Multi-technology auctions can also lead to higher efficiency, while quotas should be avoided. While PV tends to achieve lower prices in auctions restricted to small-scale projects, onshore wind performs better in auctions open to large-scale projects. Feed-in premia, multi-criteria auctions and allowing bidders to deviate from their awarded project capacity show no significant impact. The introduction of financial prequalification requirements and the length of the realisation period should be chosen carefully, as their effects are interrelated. While our results for individual design elements are largely in line with existing literature, we are able to produce new insights on the interdependencies between various auction design elements.
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