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Multi-objective auctions for utility-scale solar battery systems: lessons for ASEAN and East Asia

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  • Natsuko Toba
  • Tooraj Jamasb
  • Luiz Maurer
  • Anupama Sen

Abstract

Auctions are an increasingly popular means of competitively promoting and procuring renewable energy to meet energy, social, and climate change objectives. To succeed, the technology designs need to accommodate technological progress, declining costs, and increasing Environmental, Social and Governance (ESG) demand. This analysis examines international experiences with large-scale solar photovoltaic (PV) and battery energy storage systems (BESS) auctions, which may be useful for East and Southeast Asia. It revisits auctions' theoretical and conceptual frameworks while concentrating on the ESG aspect from the perspective of such key stakeholders as investors, government, bidders, and communities, regarding efficient allocations of risks, costs, and benefits. It then relates this framework to real-world practices and international evidence on solar PV with and without BESS. The analysis shows that integrating ESG in auction designs and business models is possible and can benefit business and sustainable development. This analysis’ focus on the ESG and solar PV plus BESS in auctions are nearly non-existent in the existing academic literature according to the review by del Río and Kiefer in Energy Policy 173 (2023).
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Suggested Citation

  • Natsuko Toba & Tooraj Jamasb & Luiz Maurer & Anupama Sen, 2023. "Multi-objective auctions for utility-scale solar battery systems: lessons for ASEAN and East Asia," Working Papers EPRG2312, Energy Policy Research Group, Cambridge Judge Business School, University of Cambridge.
    • Handle: RePEc:enp:wpaper:eprg2312
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    References listed on IDEAS

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    1. Côté, Elizabeth & Đukan, Mak & Pons-Seres de Brauwer, Cristian & Wüstenhagen, Rolf, 2022. "The price of actor diversity: Measuring project developers’ willingness to accept risks in renewable energy auctions," Energy Policy, Elsevier, vol. 163(C).
    2. 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.
    3. Diniz, Bruno Andrade & Szklo, Alexandre & Tolmasquim, Maurício T. & Schaeffer, Roberto, 2023. "Delays in the construction of power plants from electricity auctions in Brazil," Energy Policy, Elsevier, vol. 175(C).
    4. Lawrence M. Ausubel & Paul Milgrom, 2004. "The Lovely but Lonely Vickrey Auction," Discussion Papers 03-036, Stanford Institute for Economic Policy Research.
    5. Haufe, Marie-Christin & Ehrhart, Karl-Martin, 2018. "Auctions for renewable energy support – Suitability, design, and first lessons learned," Energy Policy, Elsevier, vol. 121(C), pages 217-224.
    6. Kruger, Wikus & Nygaard, Ivan & Kitzing, Lena, 2021. "Counteracting market concentration in renewable energy auctions: Lessons learned from South Africa," Energy Policy, Elsevier, vol. 148(PB).
    7. Anatolitis, Vasilios & Azanbayev, Alina & Fleck, Ann-Katrin, 2022. "How to design efficient renewable energy auctions? Empirical insights from Europe," Energy Policy, Elsevier, vol. 166(C).
    8. Cramton, Peter & Stoft, Steven, 2008. "Forward reliability markets: Less risk, less market power, more efficiency," Utilities Policy, Elsevier, vol. 16(3), pages 194-201, September.
    9. Maureen Lackner & Steven Koller & Jonathan R Camuzeaux, 2019. "Policy Brief—Using Lessons from Reverse Auctions for Renewables to Deliver Energy Storage Capacity: Guidance for Policymakers," Review of Environmental Economics and Policy, Association of Environmental and Resource Economists, vol. 13(1), pages 140-148.
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    JEL classification:

    • D0 - Microeconomics - - General
    • D4 - Microeconomics - - Market Structure, Pricing, and Design
    • D8 - Microeconomics - - Information, Knowledge, and Uncertainty
    • L0 - Industrial Organization - - General
    • L1 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance
    • L9 - Industrial Organization - - Industry Studies: Transportation and Utilities

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