Promoting Renewable Energy through Auctions : The Case of China
This knowledge note singles out auctions as an important mechanism that has been implemented in a growing number of countries in recent decades. It features a case study of auctions designed to promote the generation of electricity from renewable s...
| Main Authors: | , , |
|---|---|
| Format: | Brief |
| Language: | English en_US |
| Published: |
World Bank, Washington, DC
2014
|
| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/2014/06/19670594/promoting-renewable-energy-through-auctions-case-china http://hdl.handle.net/10986/18676 |
| Summary: | This knowledge note singles out
auctions as an important mechanism that has been implemented
in a growing number of countries in recent decades. It
features a case study of auctions designed to promote the
generation of electricity from renewable sources in China.
Although feed-in tariffs are now the cornerstone of
China's renewable energy policy, auctions have played
and continue to play a role in identifying market prices for
renewable energy in the country. Experience with the
auctioning of wind and solar concessions enabled the Chinese
authorities to modify auctions over time to yield accurate
information about the costs of generation from renewable
sources, allowing them to set feed-in tariffs at efficient
levels. This case study is interesting, because China has
set aggressive renewable energy targets and introduced
policy incentives for rapid market development. Initial
renewable energy prices showed significant variation, and
the government s targets were not achieved prior to 2005.
The most important milestone in the development of renewable
energy in China was the 2005 Renewable Energy Law. China has
applied successive adjustments to concessions auctions to
improve their usefulness in setting appropriate feed-in
tariffs. The key lesson from China's experience with
auctioning of concessions is that winning bid prices that
are lower than actual costs wind up deterring the
development of renewable energy. |
|---|