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Keywords = photovoltaic procurement auction

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24 pages, 1649 KB  
Article
When Will First-Price Work Well? The Impact of Anti-Corruption Rules on Photovoltaic Power Generation Procurement Auctions
by Peng Hao, Jun-Peng Guo, Eoghan O’Neill and Yong-Heng Shi
Sustainability 2023, 15(4), 3441; https://doi.org/10.3390/su15043441 - 13 Feb 2023
Viewed by 2296
Abstract
Along with the prevalence of photovoltaic (PV) procurement contracts, the corruption between auctioneers and potential electricity suppliers has attracted the attention of energy regulators. This study considers a corruption-proof environment wherein corruption is strictly suppressed. It elaborates a mechanism to explore the impact [...] Read more.
Along with the prevalence of photovoltaic (PV) procurement contracts, the corruption between auctioneers and potential electricity suppliers has attracted the attention of energy regulators. This study considers a corruption-proof environment wherein corruption is strictly suppressed. It elaborates a mechanism to explore the impact of corruption-proof measures on PV procurement auctions. It adopts incentive compatible constraints based on revelation principle to reflect PV firms’ optimal utilities. It employs first-price and first-score auctions and uses the Bayesian Nash equilibrium to provide a description of market outcomes. The results show that several strategies have different impacts on social welfare, PV firms’ utility, and the benefits of corruption. First, a first-price auction cannot act as a suitable policy because it may encourage corruption. Second, the first-score choice is desirable for social welfare to fit the forthcoming high-quality and low-price surroundings. Third, the first-score strategy maximizes PV firms’ utility and total income. The implications suggest that regulators ought not to employ first-price auctions in the future PV market from the perspective of social welfare. Another disadvantage of the first-price approach is that it enables the PV firm to maintain the utmost benefit from corruption. Full article
(This article belongs to the Special Issue Renewable Energy: Social Acceptance, Markets and Innovation Policies)
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