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Auctioning wind power sites when environmental quality matters

  • Ciaccia, Gervasio
  • Doni, Nicola
  • Fontini, Fulvio

In this work, we propose an index that allows a public authority to order different projects for the construction of onshore wind energy plants and that explicitly takes into account their environmental quality. Wind farm projects are defined as vectors of four attributes: the technical properties of each project, its social impact, its environmental impact, and the share of earnings that proponents offer to the collectivity in compensation for the negative externalities of the wind plant. We define an absolute index that allows the ordering of different proposals and evaluation of the acceptability of each project, providing the monetary value of each point and inducing a truthful revelation of firms' private information. Moreover, we calibrate the index on the basis of data referring to wind plants in Southern Italy and derive the corresponding iso-scoring curves.

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Article provided by Elsevier in its journal Energy Policy.

Volume (Year): 38 (2010)
Issue (Month): 4 (April)
Pages: 1734-1740

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Handle: RePEc:eee:enepol:v:38:y:2010:i:4:p:1734-1740
Contact details of provider: Web page: http://www.elsevier.com/locate/enpol

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  1. Chan, Chris & Laplagne, Patrick & Appels, David, 2003. "The Role of Auctions in Allocating Public Resources," Staff Research Papers 31916, Productivity Commission.
  2. Nicola Doni, 2006. "The Importance Of Reputation In Awarding Public Contracts," Annals of Public and Cooperative Economics, Wiley Blackwell, vol. 77(4), pages 401-429, December.
  3. repec:att:wimass:9123 is not listed on IDEAS
  4. Yeon-Koo Che, 1993. "Design Competition through Multidimensional Auctions," RAND Journal of Economics, The RAND Corporation, vol. 24(4), pages 668-680, Winter.
  5. Ladenburg, Jacob & Dubgaard, Alex, 2007. "Willingness to pay for reduced visual disamenities from offshore wind farms in Denmark," Energy Policy, Elsevier, vol. 35(8), pages 4059-4071, August.
  6. Cason, Timothy N. & Gangadharan, Lata & Duke, Charlotte, 2003. "A laboratory study of auctions for reducing non-point source pollution," Journal of Environmental Economics and Management, Elsevier, vol. 46(3), pages 446-471, November.
  7. Berardino Cesi & Gian Luigi Albano, 2008. "Past Performance Evaluation in Repeated Procurement: A Simple Model of Handicapping," Working Papers 2008.19, Fondazione Eni Enrico Mattei.
  8. Asker, John & Cantillon, Estelle, 2005. "Optimal Procurement When Both Price and Quality Matter," CEPR Discussion Papers 5276, C.E.P.R. Discussion Papers.
  9. Florence Naegelen, 2002. "original papers : Implementing optimal procurement auctions with exogenous quality," Review of Economic Design, Springer, vol. 7(2), pages 135-153.
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