As the renewable energy sector matures, policies must be adapted to reflect changing market conditions. With the increasing use of auctions, policy makers seek to procure renewables-based electricity at the lowest price and also fulfil socio-economic objectives.
This brief outlines the latest research on auctions by the International Renewable Energy Agency (IRENA), with a focus on market developments in 2017-2018.
Among the preliminary findings:
Renewable energy auctions continue to reveal competitive prices for renewable power in markets around the world.
Solar PV and wind are the most widely auctioned technologies.
Global prices for solar PV power continued their downward trend, albeit at a slower rate, while onshore wind power showed a slightly higher average global auction price in 2018 compared to the year before.
Renewable energy auctions are increasingly used to achieve objectives beyond price, including timely project completion, solar and wind integration, and supporting a just and inclusive energy transition.
Auctions can strengthen solar and wind integration by ensuring procurement of the system-friendliest power plants.
Auctions design, in combination with, financial, industrial, labour and education policies, can contribute to fulfilling broader socio-economic aims.
These broad findings on renewable energy auctions – presented at the 17th IRENA Council meeting in June 2019 – are set to be explored further in a more extensive study.