Results of First Auctions for Wind and Solar

The German Federal Ministry for Economic Affairs and Energy just published a press release about the results of the first technology-neutral auctions for both wind and solar.

In contrast to what would have been expected a couple of years ago, solar won against wind in a complete sweep. All successful bids were for solar projects and zero were for wind.

The average successful bid was at 4.63 cents per kWh.

This result explains the problem with technology-neutral auctions. If one of the technologies in the mix wins out (like this time), a system relying exclusively on technology-neutral auctions will be unbalanced. That in turn will lead to less stability.

Solar and wind are both needed, since they complement each other nicely. There is more solar potential in summer and more wind in winter, leading to a nice stable supply over the year of you have both.

Also, if one alternative wins out, the losing alternative will slow down its learning curve.

The move to an auction based system is responsible for the big slowdown in renewable deployment in Germany over the last couple of years. Now it will cause the additional problem of disturbing the balance of the renewable energy mix.

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