Appropriate design of auctions for renewable energy support – Prequalifications and penalties

Jan Kreiss, Karl-Martin Ehrhart and Marie-Christin Haufe

Energy Policy, 2017, vol. 101, issue C, 512-520

Abstract: Auctions are a promising tool to accomplish renewable energy support (RES). However, they involve diverse risks for the auctioneer and the bidders. The major risk for the auctioneer – with respect to the expansion target and the acceptance of auctions for RES in general – is the risk of non-realization: awarded bidders do not realize their projects. The main reasons are bidders' uncertainties concerning their project costs. The auctioneer can reduce the non-realization risk by taking various measures. The most discussed and implemented measures are financial and physical prequalifications and penalties.

Keywords: Renewable Energy Support; Auction design; Prequalification; Securities; Penalties; Sunk costs (search for similar items in EconPapers)
Date: 2017
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Citations: View citations in EconPapers (46)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:enepol:v:101:y:2017:i:c:p:512-520

DOI: 10.1016/j.enpol.2016.11.007

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