International experiences with tender procedures for renewable energy - A comparison of current developments in Brazil, France, Italy and South Africa

Tenders are a fast spreading instrument for the expansion of renewable energies. However, there is aneed for current analysis of experiences and results as in many countries tenders were introducedonly few years ago. The objective of this study is to provide an up‐to‐date comparison of tenderresults for wind power and photovoltaics in Brazil, France, Italy and South Africa. We analyze anddiscuss rates of completion, market concentration and auction prices, based on data and literatureresearch as well as expert interviews.Data on project status shows that rates of on‐schedule completion are well below 100% rangingbetween 14% in Brazil and 41% in South Africa (wind). However, final rates of completion of 100%are possible (South Africa). With exception of France current data suggests cancellation rates of lessthan 5%. A systematic connection between project cancellations and the instrument of tenders couldnot be identified.The market share of the five largest owners differs largely between the countries and ranges from33% (Italy) to 70% (South Africa). Despite the high level in South Africa, the significantoversubscription of tender volumes suggests that free price formation likely was not constrained.Nevertheless, small actors (<50 MW total capacity) are rare in Brazil and South Africa. For Italy theirshare cannot be determined due to lack of disclosure obligations on ownership structure.In all countries except Brazil auction prices have continuously fallen by 33% (Italy, wind energy) to76% (South Africa, photovoltaics). In Brazil, the auction price increased from auction round eight to14 from 50% to 85% of the first auction price. However, auction prices are highly dependent onfactors outside of the support scheme of tenders (e.g. interest rates), so that their evolution andlevel are not a suitable indicator to determine whether tenders lead to minimal support costs.