Reaching India’s Renewable Energy Targets:Effective Project Allocation Mechanisms

Gireesh Shrimali, Charith Konda, Arsalan Farooquee and David Nelson

MPRA Paper from University Library of Munich, Germany

Abstract: Auctions for renewable energy are gaining popularity around the world. In this context, we examined 20 renewable energy auctions in India and elsewhere to answer two questions: first, have auctions been effective; and second, how can they be designed to achieve India’s renewable energy targets? We found that auctions are almost always cost-effective, with savings up to 58% from baseline feed-in tariffs. However, auctions have not resulted in adequate deployment, with only 17% of the auctions with greater than 75% deployment. We then examined how to best design auctions by assessing seven major risks, and found the following: first, for every 1% increase in total risk, deployment effectiveness decreased by 2 percentage points; second, project specific risks have 60% greater impact than auction specific risks; and third, deployment effectiveness is most affected by auction design, completion, and financial risks. We also found that right policy design can lower these risks to improve both deployment and cost effectiveness.

Keywords: Renewable energy auctions; competitive bidding; electricity auctions; effectiveness of auctions (search for similar items in EconPapers)
JEL-codes: Q4 Q5 (search for similar items in EconPapers)
Date: 2015-05
New Economics Papers: this item is included in nep-ene, nep-env and nep-ppm
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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