Recommendations on the design of renewable auctions
SolarPower Europe has compiled a set of recommendations aimed at ensuring that auctions are organized to support the rapid growth of solar capacities throughout all EU Member States. We advocate for an implementation of the regulations in the Net-Zero Industry Act tailored specifically to the photovoltaic sector.
Read the paper
SolarPower Europe strongly supports the EU's energy and climate goals for 2030. Their success hinges on a substantial increase in solar and renewables and requires clear regulations.
Auctions, power purchase agreements, and merchant projects are crucial routes for solar developers, hence, SolarPower Europe's latest position paper provides six recommendations for tailoring the implementation of the recently approved Net-Zero Industry Act to the photovoltaic industry, ensuring auctions support rapid solar capacity growth across all EU Member States.
Promoting a technology-specific approach to tender design
The EU commission should promote a technology-specific approach to the design of relevant features of the auctions recognizing differences between solar and wind technologies
Non price criteria should be carefully designed to avoid slowing down solar deployment and must reflect industry dynamics
The role of auctions to succeed in the deployment of EU renewables targets will only be achieved by designing prequalification and non-price award criteria in an effective and proportionate way
Incentivising full and timely project completion : flexible penalties, bonus for faster realisation and prequalification rules.
Penalties and / or guarantee mechanisms are key to ensure project completion, but they should be flexible enough to avoid negative effects.
Provide investment signals and visibility to developers and investors thanks to clear auction schedules and price indexation
To provide certainty to developers and investors, we suggests defining long auction schedules and price indexation whilst emphasising the importance of indexation to inflation throughout the project lifetime for revenue certainty.
Improving auctions subscription rates with tailored bid ceilings
To address undersubscription issues, we recommend high, regularly updated, and flexible bid ceilings. The bid ceilings should consider project development costs, levelized cost of electricity (LCOE), and other economic indicators.
Exclude smaller installations under 1MW from mandatory tender processes
We advocate for maintaining a 1 MW threshold for mandatory tenders to avoid undersubscribed tenders and highlight the administrative burden on smaller rooftop owners and discourages disincentivising hybrid projects by addressing State Aid Guidelines related to renewable electricity storage.
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