Navigant Research notes that worldwide, competitive auctions are the policy choice for promoting wind power as prices have dropped

Written By: Stratton Report
February 27, 2017

On February 27, Navigant Research competitive power contract auctions are sweeping the globe, becoming the prime mechanism for encouraging the spread of wind power as the price for this technology has plummeted.

Per the research firm, wind-related policy mechanisms in many countries provided 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, however, the firm finds that the cost of wind energy has decreased to the point where many countries have begun utilizing market-oriented policy options that decrease costs for supporting governments, utilities, ratepayers, and other purchasers of renewable energy electricity.

Jesse Broehl, senior research analyst at Navigant Research observed:

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. 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.