Renewable energy auctions: an overview

Auctions have become one of the main support schemes for renewable energies (RE), with more than 130 countries using auctions to determine the support levels for RE projects. In this chapter, we start by presenting the history of RE auctions. We continue by describing how RE auctions work, their main advantages (e.g., efficient control of RE deployment and lower support expenditures) and their drawbacks (e.g., potentially low realisation rates of projects). Moreover, we present several policy objectives that can be pursued with auctions, among others, support cost efficiency and effectiveness. We provide an exhaustive overview of auction design elements and their effects on these policy objectives. Furthermore, we discuss the emergence of zero-price bids in offshore wind auctions and approaches to effectively select winners. We conclude with a discussion of the future of RE auctions and the role of auctions in related sectors, such as the support of green hydrogen.