Lessons Learned from Photovoltaic Auctions in Germany

TL;DR

This paper develops an algorithm to analyze German photovoltaic auction data, revealing insights into project realization rates, delays, and developer participation, thereby evaluating auction effectiveness and influencing factors.

Contribution

It introduces a novel algorithm to overcome data limitations in renewable energy auctions and applies it to assess German solar auction outcomes.

Findings

German auctions were effective in promoting PV projects

Average project realization time was 1.5 years with delays and penalties

Small and inexperienced developers successfully participated

Abstract

Auctions have become the primary instrument for promoting renewable energy around the world. However, the data published on such auctions are typically limited to aggregated information (e.g., total awarded capacity, average payments). These data constraints hinder the evaluation of realisation rates and other relevant auction dynamics. In this study, we present an algorithm to overcome these data limitations in German renewable energy auction programme by combining publicly available information from four different databases. We apply it to the German solar auction programme and evaluate auctions using quantitative methods. We calculate realisation rates and - using correlation and regression analysis - explore the impact of PV module prices, competition, and project and developer characteristics on project realisation and bid values. Our results confirm that the German auctions were effective. We also found that project realisation took, on average, 1.5 years (with 28% of projects finished late and incurring a financial penalty), nearly half of projects changed location before completion (again, incurring a financial penalty) and small and inexperienced developers could successfully participate in auctions.