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

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

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.

Suggested Citation

  • Kreiss, Jan & Ehrhart, Karl-Martin & Haufe, Marie-Christin, 2017. "Appropriate design of auctions for renewable energy support – Prequalifications and penalties," Energy Policy, Elsevier, vol. 101(C), pages 512-520.
    • Handle: RePEc:eee:enepol:v:101:y:2017:i:c:p:512-520
    DOI: 10.1016/j.enpol.2016.11.007
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