Competitive Power Contract Auctions Increasing Steadily Worldwide
In a changing policy environment, some mature country markets for wind energy growth have plateaued while others are experiencing or preparing for further expansion
A new report from Navigant Research examines the strengths and weaknesses of policies to promote the development of wind power capacity in 28 countries.
Until recently, most wind-related policy mechanisms were transparent, with fixed power purchase prices upfront for developers, in order to encourage wind plant investment despite the higher cost of wind compared to traditional power generation sources. Now that the cost of wind energy has plunged due to technology improvements and efficiencies of scale, many countries have begun exploring or implementing market-oriented policy options that decrease costs for supporting governments, utilities, ratepayers, and other purchasers of renewable energy electricity. Click to tweet: According to a new report from @NavigantRSRCH, in particular, competitive power contract auctions are sweeping the globe.
“One of the biggest stories in the wind energy markets is the steady rise of competitive power contract auctions, which is driving down the cost of wind power to utilities and ratepayers while still enabling the profitable construction and financing of wind plants,” says Jesse Broehl, senior research analyst at Navigant Research. “The concept is not new but the pace of implementation is significant. Since the previous version of this report was published in 4Q 2015, nine countries have seen positive, substantial progress implementing power contract auctions, two countries are likely to enact new power contract auction schemes, and three countries have stumbled in their implementation of these auction programs—leading to a higher risk environment.”
The global wind industry has faced a series of policy changes as markets mature and as various countries position to take advantage of wind energy’s newfound competitiveness against fossil-based power plants. According to the report, within this changing environment, growth has plateaued in some of the mature country markets with the most installed wind power capacity, while others are warming up for further expansion.
The report, Global Wind Energy Policy and Market Risk Assessment, examines the strengths and weaknesses of the policies to promote the development of wind power capacity in 28 countries. Navigant Research summarizes the key details of each country’s policies for wind energy and assesses how the wind plant development and investment community is reacting to those policies to evaluate which markets are most likely poised to attract wind plant development and investment and experience further wind power capacity expansion. The criteria by which countries are compared include Policy Stability, Past Performance, Sector Potential, and Economic Forecast. Countries are grouped into the four categories of Booming, Outperformers, Growing and Stable, and Stalled or High Risk. Policy summaries include quantitative data on Feed-in-Tariff rates and average prices in multiple recent power contract auctions. An Executive Summary of the report is available for free download on the Navigant Research website.
Contact: Lindsay Funicello-Paul
* The information contained in this press release concerning the report, Global Wind Energy Policy and Market Risk Assessment, is a summary and reflects Navigant Research’s current expectations based on market data and trend analysis. Market predictions and expectations are inherently uncertain and actual results may differ materially from those contained in this press release or the report. Please refer to the full report for a complete understanding of the assumptions underlying the report’s conclusions and the methodologies used to create the report. Neither Navigant Research nor Navigant undertakes any obligation to update any of the information contained in this press release or the report.