Firms’ Bidding Behavior in a New Market: Evidence from Renewable Energy Auctions
Auctions are increasingly used by governments to select suppliers and determine levels of policy support. In the context of renewable energy (RE) investment, they have become dominant in the ongoing energy transition. Using unique bid-level data from German RE auctions (2015-2019), this paper documents bidding behavior and recovers bidders' costs under uniform and pay-as-bid pricing rules by estimating a structural model of multi-unit auctions that accounts for future cash flows from subsidies. By conducting counterfactual analyses on the impact of switching to a non-discriminatory auction, we find that such a change may have reduced subsidy expenditures and mitigated market power.
Mario Samano; Associate Professor of Economics, HEC Montreal
Professor Samano has expertise in energy and environmental economics, empirical industrial organization, and applied econometrics. His research focuses on applications of empirical industrial organization techniques to analyze policies that affect electricity (mergers, introduction of renewable energy sources), automobiles (CAFE standards, feebates), and gasoline markets. In addition, his research has also contributed to the understanding of dynamic games of research and development. Professor Samano’s work has been published in academic journals including, the Journal of Political Economy, the Economic Journal, the Energy Journal, and the Journal of Economic Dynamics and Control, among others. His recent publications include “(Mis)allocation of Renewable Energy Sources” in the Journal of the Association of Environmental and Resource Economists, “Large-scale Battery Storage, Short-term Market Outcomes, and Arbitrage” in Energy Economics, and “Incentivized Mergers and Cost Efficiency: Evidence from the Electricity Distribution Industry” in The Journal of Industrial Economics.