A Counterfactual Analysis of Regional Renewable Energy Auctions Taking the Spatial Dimension into Account

Siamak Shyekhha (), Frieder Borggrefe () and Reinhard Madlener
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Siamak Shyekhha: E.ON Energy Research Center, Future Energy Consumer Needs and Behavior (FCN), Postal: School of Business and Economics / E.ON Energy Research Center, RWTH Aachen University, Mathieustrasse 10, 52074 Aachen, Germany, https://www.fcn.eonerc.rwth-aachen.de
Frieder Borggrefe: German Aerospace Center (DLR), Postal: Institute of Engineering Thermodynamics, Energiesystemanalyse, Curiestr. 4, Stuttgart, Germany, https://www.dlr.de/tt/

No 22/2019, FCN Working Papers from E.ON Energy Research Center, Future Energy Consumer Needs and Behavior (FCN)

Abstract: Auctions have recently been introduced in many countries as a useful alternative to accomplish renewable energy supports. However, they are often accompanied by a high concentration of renewable energy power plants at productive sites, at the expense of other, less favorable sites. This paper studies the impact of alternative renewable energy auction designs on the promotion of renewable energy in Germany using a novel multi-level approach. To do so, we analyze auctions on three different spatial levels: the national auction, the regional auction-type I (federal states level) and the regional auction-type II (north/south auction). The initial step for modeling renewable energy auction schemes in Germany is to investigate the onshore wind potential with a high regional and temporal resolution, using the GIS-data-based tool REMix-ENDAT. The results of this analysis show a considerable as yet untapped onshore wind potential in the southern federal states of Germany. Second, an onshore wind auction model is developed using a system dynamics approach. Finally, the comparison of the support payment for different auction designs is evaluated using the electricity market simulation model (HECTOR). Findings indicate that more bidders from the southern federal states can win in the regional auctions. Detailed spatial analysis reveals a trade-off between balanced diversity of bidders and average auction price (the price difference varies from 0.5 €-ct/kWh to 1.5 €-ct/kWh in different scenarios). We conduct that, a noticeable potential support payment saving from regional auctions should be exploited in long-term renewable energy policy designs.

Keywords: Renewable auction design; System dynamics; Support payment (search for similar items in EconPapers)
JEL-codes: D44 D47 Q28 Q47 (search for similar items in EconPapers)
Pages: 32 pages
Date: 2019-12-01
New Economics Papers: this item is included in nep-ene, nep-env and nep-reg
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

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Persistent link: https://EconPapers.repec.org/RePEc:ris:fcnwpa:2019_022

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