Auction Modelling

Auction schemes serve as a competitive and market-oriented mechanism for determining subsidies and grant levels. For example, grant levels for electricity generated from renewable energy technologies, combined heat and power units or hydrogen is increasingly determined by technology-specific auctions. The shift from fixed remuneration to subsidy rates determined through tenders aims to bring climate-neutral and efficient technologies closer to the market. In order to determine subsidy levels in a competitive and market-oriented way, auction schemes represent also an option for the acquisition of secured generation capacity or the decom-missioning of emission-intensive technologies like coal.

Market participants aiming to gain access to these subsidies must participate in the tenders. The tenders, which are predominantly designed as pay-as-bid auctions, offer opportunities for economic optimisation. Developing a robust market assessment prior to a participation is essential to exploit any optimisation potential at hand. This in turn requires a thorough analysis of opportunities and risks of the auction round. In-depth market information and a well-founded assessment of the competitive position represent a competitive advantage.