technology neutral auctions¡szló szabó_rekk...technology neutral auctions lászló szabó...
TRANSCRIPT
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Technology neutral auctionsLászló Szabó
Director, REKK
Budapest, 24.06.2019
AURES has received funds for the years 2018-2021 from the European Union’s Horizon 2020 research and innovation programme under grant agreement no. 817629
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• 9.15-10.45: Session I: Multi-technology auctions• Coffee Break
• 11.15-12.45: Session II: Financing issues in auctions• Lunch Break
• 13.45-15.15: Session III: Special topics of auction design
• Conclusion Session
Programme of the AURES Regional Workshop
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Why financing is in the focus?
WACC estimations can
change significantly, SEE
change between 2014-16
Source: Diacore, Ecofys 2016
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Further information
On further events please visit:
https://rekk.hu/events
Or subscribe to the newsletter.
Our energy economic course:
https://rekk.hu/education/energy_economics_course
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Agenda
• Overview
• Hungarian auction design
• Lessons from multi-technology auctions
• Concluding remarks
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Hungary plans for first RES auctions in 2019 (1)
Main objectives:
• lower support expenditure of RES
• comply with policy/regulatory requirements (EU State Aid)
Risks to avoid:
• Low competition level: in case of low competition,
inefficiencies in the auction outcome can arise
• Strategic behaviour of bidders: bidders can behave in
certain, unfavourable ways, which can increase support
costs
• Non-compliance of targets: in case of low realisation
rates, RES targets might be missed
• Actor concentration: auctions tend to favour bigger
players, which can decrease actor diversity
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Main design Objectives
Hungary plans for first RES auctions in 2019 (2)
Technology neutral
Budget limit
Price only
No technology discrimination -
however wind cannot participate
EU requirement –
but not too much experience yet
Makes design more complex –
no certainty on the volume!
Control for support expenditure
Awarding lowest-cost projects
Ensure support efficiency
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Guiding principles in technology neutral auctions
• Ensure sufficient competition! • Supply > demand
• Decrease (administrative) barriers for developers
• If uncertain, reduce auction volume or set a ceiling price
• Ensure equal level of playing field:• Not the same constraints but same rules on technologies
• E.g. on deposit level: the same % of investment costs
• E.g. realistic realisation period – which can differ by technology
• Ensure fairness and avoid unfavourable incentives:• Bids are binding/realisation commitment
• Lowest bid wins
• Winning bidders never receive less support than they asked for in their bid
Same rules for all
participants!
Clear, simple rules!
No frequent changes!
Retroactive changes
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European PV auctions
9
Source: Aures I: Ecofys, REKK
0
5
10
15
20
25
€cent/kW
h
French PV (small size: up to 250 kW) French PV (above 1 MW)German PV (up to 10 MW, 20 year) Dutch PV (15 year)Polish PV (under 1 MW) multi-tech Polish Wind* (above 1MW) multi-tech
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European PV auctions
10
Source: Aures I: Ecofys, REKK
0
5
10
15
20
25
€cent/kW
h
French PV (small size: up to 250 kW) French PV (above 1 MW)German PV (up to 10 MW, 20 year) Dutch PV (15 year)Polish PV (under 1 MW) multi-tech Polish Wind* (above 1MW) multi-tech
Multi-technology and
tech. neutral autions
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Ensuring competition: onshore wind auctions in Germany
0
0,5
1
1,5
2
2,5
3
3,5
0,00
10,00
20,00
30,00
40,00
50,00
60,00
70,00
80,00
2017_1 2017_2 2017_3 2018_1 2018_2 2018_3 2018_4 2019_1
Bid
volu
me/a
uctioned v
olu
me
EU
R/M
Wh
Support levels Ceiling price Average support level Competition Source: V. Anatolities
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Concluding remarks
• Hungary selected a general auction design with high complexity
• Further complications e.g. on pricing rules, differentiation of auction baskets (e.g. by size, technologies) should be avoided in order to keep number of participants high
• The clear rules would also make financing more readily available
• Keep the present regulatory directions:
• E.g. present support level reduction was moving support level closer to LCOE
• Continue with the suspension of the other renumeration schemes – actors should concentrate on the auctions now
• Further clear the rules for grid connection
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AURES has received funds for the years 2018-2021from the European Union’s Horizon 2020 research and innovation programme
under grant agreement no. 817629
László Szabó
Regional Centre for Energy Policy Research (REKK)
AURES II
Website: http://aures2project.eu/
LinkedIn: AURES II
Twitter: @auctions4res
Newsletter: http://eepurl.com/gd42zz