Renewable Energy Auctions: A Global Assessment of Design Elements and their Differential Effects

The transition of the power sector from fossil-fuel based electricity generation to renewable energy technologies (RET) is crucial for decarbonisation and mitigating climate change (Geels et al. 2017). In this transition, technology deployment policies play a key role and have been introduced in many countries (REN21 2018) to support innovation and diffusion of new technologies (Sandén & Azar 2005; Fouquet 2016; Haelg et al. 2018). Historically, feed-in tariffs were the deployment policy instrument of choice in many countries in order to establish niches for renewable energy technologies. Yet more recently, with rapidly falling RET prices, many governments are now switching to more cost-efficient policy instruments, such as auctions (REN21 2018). Studies in the innovation literature suggest that instrument design is key in inducing technology innovation and diffusion and thus in determining the effectiveness of the policy instrument (Haelg et al. 2018; Carley 2011; Schmidt & Sewerin 2018; Kemp & Pontoglio 2011; Del Río 2014). In the case of auctions, research has analysed the designs of auctions in various contexts and its role in triggering a specific outcome, such as low prices (Dobrotkova et al. 2018; Del Río & Linares 2014), high effectiveness (Del Río & Linares 2014; Winkler et al. 2018), but also delays in commissioning (Bayer et al. 2018) and project cancelation (Kreiss et al. 2017). Yet, the main body of literature on auctions focuses on single case studies (e.g. Bayer 2018; Steinhilber 2016; Tiedemann et al. 2016; Del Río 2016; Fitch-Roy & Woodman 2016; Förster & Amazo 2016; Hochberg & Poudineh 2018; Shrimali et al. 2016), and only few studies apply a systematic comparative approach which encompasses various countries and design elements (Del Río 2017; IRENA & CEM 2015; Becker & Fischer 2013). Global systematic analyses of all auction design elements and their combinations as well as their effectiveness are still missing. This paper addresses this gap by exploring the causal links between auction design elements and policy effectiveness. Methodologically, we use qualitative comparative analysis (QCA) which is ideally suited to unravel causal complexity in small-and intermediate-N datasets (Meuer & Rupietta 2017; Ragin & Rihoux 2004). The paper thus aims at informing policymakers how they should design their auctions in order to obtain the desired results and a fast transition to more sustainable electricity generation. We think that our paper would fit very well in your panel (T14P19) since we offer one perspective on the effectiveness of instruments in actually mitigating climate change in the form of a comparative, mixed-method study.