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Competitive auction mechanisms for the promotion renewable energy technologies: The case of the 50MW photovoltaics projects in Cyprus

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  • Kylili, Angeliki
  • Fokaides, Paris A.

Abstract

There are a range of policy frameworks and support mechanisms to promote the penetration of renewable energy technologies into the energy mix assembled by the governments and regulatory bodies around the world. The three dominant and most common support schemes that have also been implemented within the EU and proven successful in the past include the competitive auctions, the Feed-in Tariff scheme (FiT), and Tradable Green Certificates (TGCs). This study reviews the use of the competitive auction mechanism for the promotion of power generation from renewable energy technologies. The process of the specific policy instrument as well as its pros and cons are introduced. Successful and failed case studies from countries that have already incorporated this mechanism into their renewable energy technologies development policies are also presented. Among these cases is the Cyprus auction procurement for the licensing of 50MW of photovoltaic power plants, conducted in January 2013, which is thoroughly elaborated in this paper. The timeline of the bids is presented, and the auction winner strategy is tracked and examined. A discussion is also presented on the feasibility of the awarded projects. Eventually, the entire auction procurement procedure is evaluated to expose the defects of the mechanism and to offer some recommendations for the viability of the process.

Suggested Citation

  • Kylili, Angeliki & Fokaides, Paris A., 2015. "Competitive auction mechanisms for the promotion renewable energy technologies: The case of the 50MW photovoltaics projects in Cyprus," Renewable and Sustainable Energy Reviews, Elsevier, vol. 42(C), pages 226-233.
    • Handle: RePEc:eee:rensus:v:42:y:2015:i:c:p:226-233
    DOI: 10.1016/j.rser.2014.10.022
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    References listed on IDEAS

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    1. Currier, Kevin M., 2013. "A regulatory adjustment process for the determination of the optimal percentage requirement in an electricity market with Tradable Green Certificates," Energy Policy, Elsevier, vol. 62(C), pages 1053-1057.
    2. Wand, Robert & Leuthold, Florian, 2011. "Feed-in tariffs for photovoltaics: Learning by doing in Germany?," Applied Energy, Elsevier, vol. 88(12), pages 4387-4399.
    3. Paul Klemperer, 2004. "Auctions: Theory and Practice," Online economics textbooks, SUNY-Oswego, Department of Economics, number auction1.
    4. Becker, Bastian & Fischer, Doris, 2013. "Promoting renewable electricity generation in emerging economies," Energy Policy, Elsevier, vol. 56(C), pages 446-455.
    5. Paul Klemperer, 2004. "Survey of Auction Theory, from Auctions: Theory and Practice," Introductory Chapters, in: Auctions: Theory and Practice, Princeton University Press.
    6. Lesser, Jonathan A. & Su, Xuejuan, 2008. "Design of an economically efficient feed-in tariff structure for renewable energy development," Energy Policy, Elsevier, vol. 36(3), pages 981-990, March.
    7. Paul Klemperer, 2004. "Auctions: Theory and Practice," Online economics textbooks, SUNY-Oswego, Department of Economics, number auction1.
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