Beyond Price - Assessing the Impact of Non-Price Criteria in Solar Photovoltaic Auctions

Auctions are the main policy instrument to allocate support for the deployment of renewable energy (RE). In the past, RE auction design mainly focused on price discovery and support cost minimisation. Recently, other policy objectives, such as resilience of supply chains, have become increasingly important. These further policy objectives are typically considered in RE auctions by incorporating non-price criteria (NPC) in the selection process, as proposed, e.g., by the European Union's (EU) Net-Zero Industry Act. We examine the potential effects of NPC and their parametrisation on auction outcomes by developing a techno-economic model for simulating multi-criteria solar photovoltaic (PV) auctions in the EU. We find that resilience and sustainability NPC can have substantial effects on supply chain diversification and GHG intensity of deployed PV modules. Practically, a combined NPC weight between 15% and 30% is advisable. In line with existing literature, we find that NPC tend to increase support costs.