Two basic types of auctions are regularly applied to allocate supportJust like administratively set support, auction-allocated su... for renewable energy installations: Single-item auctions and multiple-item auctions.
a) In a single-item auctionAn auction is a market mechanism with the aims of allocating..., the auctioneer selects a site for the future installation and usually pre-develops the site to a certain degree (this may include environmental evaluations, measurement of resource availability, evaluations on geological structure, etc.). Bidders then compete for the right to construct their renewable installations at this specific site. Single-item auctions tend to be suitable in cases where individual projects are rather large in comparison to the target volume of the auctionAn auction is a market mechanism with the aims of allocating... scheme; where the project pipeline tends to contain few, but large projects at any given time; and where grid infrastructure is mostly non-existent and must be developed in coordination with new projects (for instance at sea or in remote regions).
b) In a multiple-item auctionTwo basic types of auctions are regularly applied to allocat... More, the auctioneer has a target volume [x MW] for the auctionAn auction is a market mechanism with the aims of allocating... round, and bidders compete with their projects which they have pre-developed at their chosen sites. Winning projects are accepted until the target auction volumeThe auction volume refers to the amount of renewable electri... is full. This auctionAn auction is a market mechanism with the aims of allocating... format tends to be suitable when individual project size is small compared to the target volume, so several projects will be needed to fill it; when a large number of small/medium-sized projects regularly enters the project pipeline; and when most grid infrastructure is already available.