Tendering Procedures

Auctions can be used to determine the winner of purchased power contracts. The procedures can also allocate investment support or production support (such as feed-in tariffs), or for other limited rights, such as sites on public property for wind energy or for hydroelectric sites. To avoid charges of political favoritism, it is best to have potential investors or producers participate through a competitive bidding system. Generally in such a system, a target amount of generating capacity is set forth, often specifying use of a particular type of renewable energy. The criteria for the evaluation of the bids are set before each bidding round. For example the government might decide on the desired level of electricity from each of the renewable sources, their growth rate over time, and the level of long-term price security offered to producers over time.