Auctions for Renewable Energy Support: Lessons Learned in the AURES Project

Abstract

Market-based, competitive bidding processes, i.e., auctions, are becoming a dominant policy instrument for securing future electricity production from renewable energy sources (RES) around the world. The rapid growth is striking: in 2005, only six countries employed RES auctions, and by 2017 at least 84 countries had adopted the mechanism. This article outlines the rationale for the shift, describes some of the key design characteristics of auctions, together with best practices and potential pitfalls, and briefly considers the future of auctions in the face of declining support needs.