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Performance of renewable energy auctions : experience in Brazil, China and India

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  • Elizondo Azuela, Gabriela
  • Barroso, Luiz
  • Khanna, Ashish
  • Wang, Xiaodong
  • Wu, Yun
  • Cunha, Gabriel

Abstract

This paper considers the design and performance of auction mechanisms used to deploy renewable energy in three emerging economies: Brazil, China, and India. The analysis focuses on the countries'experience in various dimensions, including price reductions, bidding dynamics, coordination with transmission planning, risk allocation strategies, and the issue of domestic content. Several countries have turned to public competitive bidding as a mechanism for developing the renewable generation sector in recent years, with the number of countries implementing some sort of auction procedure rising from nine in 2009 to 36 by the end of 2011 and about 43 in 2013. In general, the use of auctions makes sense when the contracting authority expects a large volume of potentially suitable bids, so that the gains from competition can offset the costs of implementation. A study of the successes and failures of the particular auction design schemes described in this paper can be instrumental in informing future policy making.

Suggested Citation

  • Elizondo Azuela, Gabriela & Barroso, Luiz & Khanna, Ashish & Wang, Xiaodong & Wu, Yun & Cunha, Gabriel, 2014. "Performance of renewable energy auctions : experience in Brazil, China and India," Policy Research Working Paper Series 7062, The World Bank.
    • Handle: RePEc:wbk:wbrwps:7062
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    Cited by:

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    3. del Río, Pablo & Kiefer, Christoph P., 2023. "Academic research on renewable electricity auctions: Taking stock and looking forward," Energy Policy, Elsevier, vol. 173(C).
    4. Grashof, Katherina & Berkhout, Volker & Cernusko, Robert & Pfennig, Maximilian, 2020. "Long on promises, short on delivery? Insights from the first two years of onshore wind auctions in Germany," Energy Policy, Elsevier, vol. 140(C).
    5. José V. P. Miguel & Eliane A. Fadigas & Ildo L. Sauer, 2019. "The Influence of the Wind Measurement Campaign Duration on a Measure-Correlate-Predict (MCP)-Based Wind Resource Assessment," Energies, MDPI, vol. 12(19), pages 1-15, September.
    6. Shahriyar Nasirov & Eugenio Cruz & Claudio A. Agostini & Carlos Silva, 2019. "Policy Makers’ Perspectives on the Expansion of Renewable Energy Sources in Chile’s Electricity Auctions," Energies, MDPI, vol. 12(21), pages 1-17, October.
    7. 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).
    8. Hansen, U.E. & Nygaard, I. & Morris, M. & Robbins, G., 2020. "The effects of local content requirements in auction schemes for renewable energy in developing countries: A literature review," Renewable and Sustainable Energy Reviews, Elsevier, vol. 127(C).
    9. Jakub Sawulski & Jan Witajewski-Baltvilks, 2017. "Optimal RES differentiation under technological uncertainty," IBS Working Papers 07/2017, Instytut Badan Strukturalnych.
    10. Diniz, Tiago B. & Caiado Couto, Lilia, 2024. "Achieving a high share of non-hydro renewable integration in Brazil through wind power: Regional growth and employment effects," Renewable and Sustainable Energy Reviews, Elsevier, vol. 197(C).
    11. Pandey, Rita & Mehra, Meeta Keswani, 2015. "Role of Fiscal Instruments in Promoting Low-carbon Technology Innovation," Working Papers 15/147, National Institute of Public Finance and Policy.
    12. Bayer, Benjamin & Berthold, Lennart & Moreno Rodrigo de Freitas, Bruno, 2018. "The Brazilian experience with auctions for wind power: An assessment of project delays and potential mitigation measures," Energy Policy, Elsevier, vol. 122(C), pages 97-117.
    13. Baumber, Alex & Metternicht, Graciela & Cross, Rebecca & Ruoso, Laure-Elise & Cowie, Annette L. & Waters, Cathleen, 2019. "Promoting co-benefits of carbon farming in Oceania: Applying and adapting approaches and metrics from existing market-based schemes," Ecosystem Services, Elsevier, vol. 39(C).
    14. Ibanez-Lopez, A.S. & Moratilla-Soria, B.Y., 2017. "An assessment of Spain's new alternative energy support framework and its long-term impact on wind power development and system costs through behavioral dynamic simulation," Energy, Elsevier, vol. 138(C), pages 629-646.
    15. Bayer, Benjamin & Schäuble, Dominik & Ferrari, Michele, 2018. "International experiences with tender procedures for renewable energy – A comparison of current developments in Brazil, France, Italy and South Africa," Renewable and Sustainable Energy Reviews, Elsevier, vol. 95(C), pages 305-327.
    16. Viana, Alexandre G. & Ramos, Dorel Soares, 2018. "Outcomes from the first large-scale solar PV auction in Brazil," Renewable and Sustainable Energy Reviews, Elsevier, vol. 91(C), pages 219-228.
    17. Kandpal, Divik & Dhingra, Tarun, 2021. "Migrating to reverse Auction mechanisms in wind energy sector: Status and challenges," Energy Policy, Elsevier, vol. 156(C).
    18. Zhu, Tong & Curtis, John & Clancy, Matthew, 2019. "Promoting agricultural biogas and biomethane production: Lessons from cross-country studies," Renewable and Sustainable Energy Reviews, Elsevier, vol. 114(C), pages 1-1.
    19. Daniel del Barrio Alvarez & Masahiro Sugiyama, 2020. "A SWOT Analysis of Utility-Scale Solar in Myanmar," Energies, MDPI, vol. 13(4), pages 1-17, February.

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    Keywords

    Energy Production and Transportation; Markets and Market Access; Climate Change Mitigation and Green House Gases; Debt Markets; Emerging Markets;
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