Is small always beautiful? Analyzing the efficiency effects of size heterogeneity in renewable electricity auctions

The size of bidders has been the focus some research in empirical literature renewable electricity auctions, mostly related to (negative) impact auctions and auction design elements on participation award small bidders. main result this is that actors are discouraged from participating being awarded a detrimental outcome auctions. However, efficiency not received comparable degree attention. aim paper contribute with an analysis effects different sizes Our results show greater diversity bidders’ increases probability will be efficient. In other words, promoting respect large ones comes at cost terms lower allocative i.e., lowest-cost awarded. Although governments have goal our findings suggest reason for actor auction, but must lie elsewhere competition, mitigation risk collusion, social acceptability or decentralization energy production. • (RE) researched. analyze RE Results Promoting probably efficiency. there should non-efficiency reasons (social acceptability).