Negative bidding bad for consumers

Bild: PixabayBild: Pixabay
Negative bidding imposes additional costs on wind farm developers – and that developers have to pass these costs on to someone.

Official Press Release WindEurope:

Negative bidding in wind auctions is bad for consumers and bad for the supply chain

Wind Industry Profile of
Negative bidding in wind auctions is bad for consumers and bad for the supply chain

A number of governments are now tempted to apply ‘negative bidding’ in their wind energy auctions, to make companies pay them for the right to develop a new wind farm.

When renewables auctions started, the idea was that governments would offer some form of financial support to project developers. The most common form of support now is the Contract for Difference where governments pay developers when the market price is below the auction price but developers pay governments when it’s the other way round. That’s a good system: it’s cheap for governments – and cheap for society as it ensures stable revenues so minimises finance costs. Some governments have started using “zero-bid” auctions, where wind farms simply earn the market price... ... More: Official Press Release WindEurope

WindEurope, negative, bidding, auction, Europe, supply chain, wind farm, development, market price, electricity, CfD, costs

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