Policy makers may have an interest in promoting certain technical specifications in an auctionAn auction is a market mechanism with the aims of allocating..., be it technology-specific or technology-neutral. Such specifications may aim to improve environmental impact, innovation impact, or system integrationAt increasing shares of renewable electricity, policy makers....
Examples for desired technical specifications might include efficient CHP technology in a biomass auctionAn auction is a market mechanism with the aims of allocating..., innovative technologies such as thin-film in a PV auctionAn auction is a market mechanism with the aims of allocating..., certain environmental standards in a hydro power auctionAn auction is a market mechanism with the aims of allocating..., or technical prerequisites for system integrationAt increasing shares of renewable electricity, policy makers....
Conceptually, treating certain technical specifications separately is no different from differentiating between RES technologies (such as onshore wind, hydro, PV, etc.). Similar pros and cons apply as for technology-neutral vs. –specific supportJust like administratively set support, auction-allocated su... scheme designs: Providing favourable treatment for a certain technological design is a political decision, as the favoured technology is protected from free competition with other, potentially lower-cost options.
This may lead to higher supportJust like administratively set support, auction-allocated su... costs in the short term. On the other hand, the dynamic efficiencyDynamic efficiency refers to the ability of an instrument to... of the supportJust like administratively set support, auction-allocated su... scheme can be increased by favouring higher-cost but promising technology segments. for an individual technology segment runs the risk of insufficient competition within that segment. This risk will be more significant for smaller and more specialised technology segments.
In order to include certain technology characteristics as a secondary objective in your auctionAn auction is a market mechanism with the aims of allocating..., you can implement the following design elements:
1) Separate auctions for separate technology classes
SupportJust like administratively set support, auction-allocated su... for the favoured installations type is allocated in a separate auctionAn auction is a market mechanism with the aims of allocating..., in which only installations of this type participate. The principle is thus the same as for auctions limited to a certain technology, for instance PV or hydro.
This measure is of course not applicable if a policy maker wishes multi-technology auctions, in which not only technology classes but whole technologies compete in one single auctionAn auction is a market mechanism with the aims of allocating....
2) Contingents for technologies with certain specifications
A minimum contingent is defined for installations complying with a certain technical specification.
3) Criterion in auctionAn auction is a market mechanism with the aims of allocating... to favour desired technical specification
The auctionAn auction is a market mechanism with the aims of allocating... is held as a multi-criteria auctionAn auction is a market mechanism with the aims of allocating... in which compliance with the desired technical specification increases the overall score of a bidder.
4) Boni for desired technical specifications
Bidders submit a price offer and receive a bonus if they also comply with the technical specification.