Measuring project developers’ willingness to accept risks in RE auctions: a new paper out

Researchers at University of St.Gallen and DTU Wind have recently published a paper titled “The price of actor diversity: Measuring project developers’ willingness to accept risks in renewable energy auctions” on the journal Energy Policy.

Based on insights from 559 experimental choices made by 61 European project developers, this study explores bidders’ risk premiums for different auction designs and focuses on rules to share project ownership with local communities. The authors show that developers are willing to accept the requirement to submit bid bonds up to a certain threshold, and that a 36-month realisation period is preferred overall.

While developers may be open to citizen co-investment, the risk premiums they require increase with the share of capital offered to local residents in auction settings, highlighting an apparent trade-off between promoting actor diversity and low-cost RE deployment.

Policymakers unwilling to compensate developers for the price of increasing actor diversity may have to find other ways to promote citizen participation in order to achieve RE objectives, as this factor may have important implications for the acceptance of RE deployment.

The (open-source) article is available for reading and download here.

2022-02-15T09:00:43+01:00February 15th, 2022|Tags: , , , |
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