Electricity Auctions : An Overview
of Efficient Practices

Electricity Auctions : An Overview of Efficient Practices

This report assesses the potential of electricity contract auctions as a procurement option for the World Bank's client countries. It focuses on the role of auctions of electricity contracts designed to expand and retain existing generation ca...

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Bibliographic Details
Main Authors:	Maurer, Luiz T. A., Barroso, Luiz A.
Format:	Publication
Language:	English
Published:	World Bank 2012
Subjects:	AGGREGATE DEMAND ARBITRAGE AUCTION AUCTION DESIGN AUCTION DESIGNS AUCTION MECHANISM AUCTION MECHANISMS AUCTION PRICE AUCTION SYSTEM AUCTIONS AVERAGE PRICE BANDWIDTH BARRIERS TO ENTRY BEST PRACTICES BID PRICE BIDDING BIDDING PROCESS BIDS BUDGET CONSTRAINTS BUSINESS MODEL BUSINESS MODELS BUSINESSES BUYER BUYERS CALL OPTIONS CAPACITY EXPANSION CAPACITY PAYMENTS CAPTIVE CUSTOMERS CAPTIVE MARKET CLIENT COUNTRIES COMMODITY COMMON DENOMINATORS COMPETITION IN ELECTRICITY COMPETITIVE AUCTION COMPETITIVE AUCTIONS COMPETITIVE BID COMPETITIVE BIDDING COMPETITIVE PRICE COMPETITIVE PROCUREMENT COMPETITIVENESS COMPLEX INSTRUMENTS CONCESSION CONCESSIONS CONTINGENT LIABILITIES CONTRACTUAL TERMS COPYRIGHT COPYRIGHT CLEARANCE COPYRIGHT CLEARANCE CENTER COST STRUCTURES DECENTRALIZATION DEMAND CURVE DEMAND FUNCTION DEMAND GROWTH DEREGULATION DEVELOPING COUNTRIES DISSEMINATION OF INFORMATION DISTRIBUTION BUSINESSES DISTRIBUTION COMPANIES DIVESTITURE DUTCH AUCTION DUTCH AUCTIONS E-MAIL ECONOMIES OF SCALE ELECTRIC SECTOR ELECTRICITY ELECTRICITY GENERATION ELECTRICITY INDUSTRY ELECTRICITY MARKET ELECTRICITY SECTOR ELECTRICITY SUPPLY END-USER END-USERS ENERGY AUCTIONS ENERGY PRICE ENERGY PROCUREMENT ENFORCEMENT OF CONTRACTS EXCESS SUPPLY EXPANSION OF GENERATION CAPACITY EXPOSURE FAIR FORWARD CONTRACT FUTURE CONTRACTS GENERATION GENERATION CAPACITY GENERATION EXPANSION GENERATORS GOVERNMENT CONTRACTS GOVERNMENT GUARANTEES GOVERNMENT INVESTMENTS GOVERNMENT POLICY GOVERNMENT SUPPORT GROWTH RATES IMAGES INCOME INDEPENDENT POWER PRODUCERS INDIVIDUAL MARKET INDIVIDUAL MARKETS INFORMATION DISCLOSURE INFORMATION TECHNOLOGY INSTALLATION INSTITUTIONAL FRAMEWORKS INSTRUMENT INTERNATIONAL BANK JURISDICTIONS LACK OF TRANSPARENCY LEVELS OF COMPETITION LIBERALIZATION LICENSES LIMITED ACCESS LIQUID MARKETS LOAD CURVE LOAD SHAPE LOWER PRICES MARGINAL COST MARKET CONCENTRATION MARKET DESIGN MARKET FORCES MARKET MECHANISM MARKET MECHANISMS MARKET PARTICIPANTS MARKET POWER MARKET REQUIREMENTS MARKET VALUE MARKETPLACE MATERIAL MIDDLE-INCOME COUNTRIES MOBILE SERVICES NEW PRODUCTS OFFER PRICE OPEN AUCTION OPPORTUNITY COSTS OUTSOURCING PAYMENT GUARANTEES PHYSICAL ASSETS POLICY FORMULATION PORTFOLIO POTENTIAL INVESTORS POWER CONTRACTS POWER MARKETS POWER PLANTS POWER PURCHASE POWER PURCHASE AGREEMENTS POWER PURCHASE COSTS POWER SECTOR POWER SECTOR REFORM PRICE AUCTION PRICE BIDS PRICE COMPETITION PRICE DECREASES PRICE DISCOVERY PRICE ELASTICITY PRICE INFORMATION PRIVATE INFORMATION PRIVATE SECTOR PROCUREMENT PROCUREMENT PROCESS PROCUREMENT PROCESSES PURCHASING QUERIES RADIO RADIO SPECTRUM REGIONAL POWER REGULATOR REGULATORS REGULATORY FRAMEWORK REGULATORY OVERSIGHT REGULATORY REQUIREMENTS RELIABILITY RENEWABLE ENERGY RESERVE RESULT RESULTS RETAIL REVERSE AUCTION REVERSE AUCTIONS RISK AVERSION RULE OF LAW SALE SALES SAVINGS SITES SPOT ELECTRICITY SPREAD STATE UTILITIES SUBSTITUTES SUPPLIERS SUPPLY CHAIN SUPPLY CONTRACTS SUPPLY CURVE SUPPLY FUNCTION SUSTAINABLE DEVELOPMENT TELECOMMUNICATIONS TELECOMMUNICATIONS COMPANIES TELEPHONE TENDERS TIME FRAMES TRADING TRANSACTION TRANSACTION COSTS TRANSMISSION TRANSMISSION ASSETS TRANSMISSION FACILITIES TRANSPARENCY TRANSPARENT PROCUREMENT TRANSPARENT PROCUREMENT PROCESS TRANSPARENT WAY UNIFORM PRICE UNIFORM PRICE AUCTION USES UTILITIES UTILITY COMPANIES VALUATIONS VERTICAL INTEGRATION WEB WEB SITE WHOLESALE MARKET WHOLESALE MARKETS WINNING BIDDERS
Online Access:	http://www-wds.worldbank.org/external/default/main?menuPK=64187510&pagePK=64193027&piPK=64187937&theSitePK=523679&menuPK=64187510&searchMenuPK=64187283&siteName=WDS&entityID=000356161_20110818032547 http://hdl.handle.net/10986/2346

Description
Summary:	This report assesses the potential of electricity contract auctions as a procurement option for the World Bank's client countries. It focuses on the role of auctions of electricity contracts designed to expand and retain existing generation capacity. It is not meant to be a 'how-to' manual. Rather, it highlights some major issues and options that need to be taken into account when a country considers moving towards competitive electricity procurement through the introduction of electricity auctions. Auctions have played an important role in the effort to match supply and demand. Ever since the 1990s, the use of long-term contract auctions to procure new generation capacity, notably from private sector suppliers, has garnered increased affection from investors, governments, and multilateral agencies in general, as a means to achieve a competitive and transparent procurement process while providing certainty of supply for the medium to long term. However, the liberalization of electricity markets and the move from single-buyer procurement models increased the nature of the challenge facing system planners in their efforts to ensure an adequate and secure supply of electricity in the future at the best price. While auctions as general propositions are a means to match supply with demand in a cost-effective manner, they can also be and have been used to meet a variety of goals.