Renewable Energy Auctions and Tenders: How good are they?

This paper analyses the performance of two cases of renewable energy (RE) auction/tender systems in an effort to contribute to the evaluation of RE auction/tender systems and to study best practice in their delivery of RE projects. This is done by comparing regimes in different settings, one concerned with Danish offshore wind development, the other concerned with renewable energy development in South Africa. It is found that regulatory factors which promote certainty in deployment, including measures to ensure that projects achieve grid connection, are important in assuring delivery of the programmes. However cost reductions that are associated with renewable energy auctions are not caused mainly by the auction systems themselves, but rather are associated with general declines in the costs of renewable energy technologies. Moreover, the effect of renewable energy auctions systems may be more concerned with limiting renewable energy deployment rather than reducing the costs of energy generated by renewable energy projects that are deployed.