Effectiveness and efficiency of auctions for supporting renewable electricity – What can we learn from recent experiences?

Jenny Winkler, Magdalena Magosch and Mario Ragwitz

Renewable Energy, 2018, vol. 119, issue C, 473-489

Abstract: The current debate about using auctions to support electricity from renewable sources is very polarised. While their proponents imply that auctions are the universal remedy, their opponents consider them a major threat to other formerly successful policies for renewables. In theory, auctions can improve the effectiveness and efficiency of support. However, the empirical effects of auctions on renewable support have not yet been fully analysed. Here, we use empirical data from Brazil, France, Italy, the Netherlands and South Africa to compare the effectiveness and efficiency of auction-based schemes with previous support schemes. Comparisons with countries that did not switch to an auction scheme in the time period assessed complement the study. The analysis shows mixed results. While auctions can indeed improve efficiency and effectiveness, this cannot be identified as a generic trend. The evidence based on existing data is neither sufficient to recommend the introduction of auctions as a generic instrument, nor does it show that previous support schemes were typically superior. Therefore, policy makers in countries which already have effective and efficient support schemes of any kind need to be very careful when designing auctions in order to achieve the targeted improvements.

Keywords: Renewable electricity; Support schemes; Auctions; Energy policy; Market-based instruments (search for similar items in EconPapers)
Date: 2018
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (29)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0960148117309357
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:renene:v:119:y:2018:i:c:p:473-489

DOI: 10.1016/j.renene.2017.09.071

Access Statistics for this article

Renewable Energy is currently edited by Soteris A. Kalogirou and Paul Christodoulides

More articles in Renewable Energy from Elsevier
Bibliographic data for series maintained by Catherine Liu ().