An article by Enikő Kácsor, senior research associate at REKK, has been recently published in the journal Energies. The paper assesses renewable energy support allocation through different types of auctions, based on the rules followed in the German photovoltaic (PV) Feed-in Premium auctions. It contains an extended levelised cost of electricity (or support need) calculation and a novel iterative approach to find a Nash-equilibrium bidding strategy in case of symmetric pay-as-bid auctions.
The results of the work suggest that the PV support allocation in the German auction system would be more cost efficient using the uniform pricing rule, since many participants bid above their true valuation in the pay-as-bid auction Nash-equilibrium. Thus from a cost minimising perspective, the application of uniform pricing rule would be a better policy decision.
The findings and methods developed in the study can be applied to other types of auctions and to other countries employing similar auction designs, including Greece, Spain and Portugal.

The paper is available here.


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