Effective Auctions for Renewable Energy Support

Challenge

Auctions, as a market-based and competitive mechanism, are on the verge of becoming a predominant feature in support policies for renewable energy in Europe. However, only some Member States have undertaken competitive auctions to allocate support for renewable energy sources in the electricity sector, and with mixed experiences. 

AURES is a European research project on auctions for renewable energy sources (RES) in the EU. The project addressed the important and urgent issue of improving current support policies for electricity from renewable energy sources through competitive market measures.

Solution

As part of the AURES consortium, Guidehouse investigated the applicability of auctions for RES under different market conditions in European countries.

Using tailored theoretical, empirical, experimental, and model-based approaches, the experts explored under which circumstances auctions are preferable to (e.g., administratively set tariffs or quotas, and how RES auctions should be designed to achieve desired outcomes). By facilitating an active and continuous stakeholder dialogue and by establishing a knowledge sharing network, the project also served as a capacity building platform.

Impact

AURES developed best practices and tailored policy recommendations for future auction designs, making it possible for policymakers and market participants to make informed decisions when dealing with renewable support policies. The final report, “Auctions for renewable energy support - Taming the beast of competitive bidding,” sums up the key findings from three years of research and stakeholder dialogue.