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Auctioning Wind Power Sites when Environmental Quality Matters

Author

Listed:
  • Gervasio Ciaccia

    (Italian Authority for Electricity and Gas (AEEG) and Sapienza University of Rome)

  • Nicola Doni

    (University of Florence)

  • Fulvio Fontini

    () (University of Padua)

Abstract

In this work we frame within auction theory an index that allows 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 attributes, encompassed in four categories: 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 to order different proposals and evaluate 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 a representative project and derive the corresponding iso-scoring curves.

Suggested Citation

  • Gervasio Ciaccia & Nicola Doni & Fulvio Fontini, 2008. "Auctioning Wind Power Sites when Environmental Quality Matters," "Marco Fanno" Working Papers 0081, Dipartimento di Scienze Economiche "Marco Fanno".
  • Handle: RePEc:pad:wpaper:0081
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    References listed on IDEAS

    as
    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. Yeon-Koo Che, 1993. "Design Competition through Multidimensional Auctions," RAND Journal of Economics, The RAND Corporation, vol. 24(4), pages 668-680, Winter.
    4. 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.
    5. Florence Naegelen, 2002. "original papers : Implementing optimal procurement auctions with exogenous quality," Review of Economic Design, Springer;Society for Economic Design, vol. 7(2), pages 135-153.
    6. 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.
    7. Asker, John & Cantillon, Estelle, 2005. "Optimal Procurement When Both Price and Quality Matter," CEPR Discussion Papers 5276, C.E.P.R. Discussion Papers.
    8. 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.
    Full references (including those not matched with items on IDEAS)

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    Cited by:

    1. Iglesias, Guillermo & del Río, Pablo & Dopico, Jesús Ángel, 2011. "Policy analysis of authorisation procedures for wind energy deployment in Spain," Energy Policy, Elsevier, vol. 39(7), pages 4067-4076, July.

    More about this item

    Keywords

    Renewable Energy; Wind Power; Scoring Rule; Environmental Externalities;

    JEL classification:

    • Q42 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Alternative Energy Sources
    • Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy
    • D4 - Microeconomics - - Market Structure, Pricing, and Design

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