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.