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Auctions and Bid Strategies for Offshore Wind

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1-Day

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Virtual (Live)

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Auctions and Bid Strategies for Offshore Wind

There is now a considerable track-record of both open auctions and tender-based competitive awards for the allocation of offshore wind (OSW) projects in the US and beyond. In the US, while BOEM has historically favored dynamic, iterative auctions for the award of lease areas, offtake contracts have more commonly been awarded via the use of competitive tenders.

While BOEM’s central Clock Auction design has remained relatively stable over the last 10 years or so, many other countries have experimented with different types of auction and tender processes for the award of lease concessions and / or subsidy and support contracts. Looking forward, BOEM’s recent proposals to evolve their Clock Auction format for the next wave of auctions are more significant than they seem at first glance.

The choice of auction format, packaging of the ‘products’, and the restrictions placed on bidders can greatly affect the risk profile, attractiveness, and practical implications of the award for bidders – how to win and at what price?

If you want to understand the lessons from previous awards and learn how to drive towards a successful outcome in your next auction, this course is for you. You’ll learn about the implications of different rules on optimal strategy, how to manage risks and opportunities, and even participate in a live auction simulation. All of which are critical for preparing your organization for success.

Course Objectives:

- Provide participants with a broad understanding of the use of auctions and tender mechanisms for the allocation of both leases and offtake contracts for OSW in the US - past, present and future

- Extract learnings and insights from previous auctions for OSW and cross-pollinate with relevant examples from auctions in other geographies and industries

- Introduce the various dimensions of auction design and highlight the risks and opportunities of different auction formats and what they mean in practice for bidders

- Discuss common concepts in bid strategy with game-theoretical examples and practical real-world case studies

- Provide the opportunity for participants to experience real-time bidding in an interactive auction simulation

- Equip participants with an understanding of critical success factors and processes for auction preparation as a bidder, auctioneer, or a steering board member / investor

Who Should Attend?

Developers: leaders, project managers, engineers and finance managers from developers considering participating in an auction, wanting to understand the key risks and opportunities and how to optimally prepare for bidding

Investors: considering financing OSW projects or interested in how auctions can affect the project risk / return profile

Industry analysts: wanting to understand how auction rules can affect market dynamics or favor one bidder or another, or needing to understand auction results

Policy makers: interested in understanding the practical implications of auction design decisions on bidders

Other industry stakeholders: wanting a firm grounding in auctions for OSW

Course Outline:

Introduction to the history of offshore wind auctions in the US and elsewhere

- Overview of previous BOEM lease auctions

- Case studies on previous OREC solicitations

- Overview of auctions in other countries and the interaction of auctions and support / subsidy models

Auction design in practice

- Deep dive on specific auction formats used in the past and planned by BOEM for offshore wind leases in 2024 and beyond (Central Atlantic, Oregon, Gulf of Maine, and Gulf of Mexico) and by states for offtake contracts, with relevant examples from other industries

- Common auction design dimensions and how they work together incl. evaluation criteria, product packaging, competition and outcome constraints, caps, and pricing rules

- Understanding risks and opportunities of auction design and practical implications for bidders

- Auction design mistakes and the consequences

Introduction to bid strategy for auctions

- Auction and game theory primer

- Strategic considerations of auctions

- Practical examples of bid strategy in action

- What does ‘winning’ really mean?

Real-time auction simulation

- Introduction to the auction simulation scenario

- Primer on the specific auction mechanism

- Introduction to auction systems and analytics

- Bidding mandate and bid strategy development exercise

- Live bidding exercise

Best practice auction preparation

- Critical success factors for auction preparation

- Value-at-stake in auction rule shaping

- Managing stakeholders for success

- Organizing for flawless execution

Teaching Team

The course will be delivered by experts from Boston Consulting Group’s Center for High-Stakes Auctions and Tenders – a global center of excellence for auctions active in multiple industry verticals including OSW. The team has supported multiple US offshore wind auctions and tenders in recent years, both for BOEM leases and offtake solicitations.

Dr Ernesto Wandeler

Managing Director & Partner, BCG Center for High-Stakes Auctions and Tenders

Ernesto leads BCG’s Global Center for High-Stakes Auctions & Tenders and has over 15 years’ experience supporting clients across the globe and across industries through multi-billion-dollar auction processes. He is an expert in game-theory and bidding strategy and has in total already spent over two years in live bidding rooms advising C-levels and bid teams during auctions. Ernesto has extensive experience in energy, telecommunications, sports and infrastructure auctions and tenders.

Jeremy Merz

Partner, BCG Center for High-Stakes Auctions and Tenders

With almost a decade of experience, Jeremy has been advising clients in various industries, including renewables, fossil fuels, telecommunications, and sports, on high-stakes auctions and tenders. His expertise spans from evaluating opportunities and developing bid strategies to managing bids and delivering critical bid content. Additionally, Jeremy has assisted auctioneers in designing and executing best in class auctions and tenders. He focuses on renewable auctions, including the US BOEM and OREC Solicitations. He has also worked for Offshore Wind developers on topics such as O&M strategies, Route to Market optimization, and contracting.

Simon Edkins

Partner and Associate Director, BCG Center for High-Stakes Auctions and Tenders

Simon is an experienced auction expert in the BCG Center for High Stakes Auctions with over 15 years’ experience in supporting awards across multiple industry verticals including energy and telecommunications in both the US and Europe and beyond. Simon has deep expertise in auction formats and the implications for optimal bidding and risk management. He has advised companies on the buy-side in addition to regulatory authorities and governments on the sell-side. He has significant experience with auction analytics, data science, geo-spatial modelling, and was instrumental in the development of BCG’s bid tools suite.

Stéphanie Schon

Consultant, BCG Center for High-Stakes Auctions and Tenders

Stéphanie has supported multiple auction and tender projects in recent years in both the US and Europe. She has developed bespoke winning bid content, integrating tightly with various client subject matter experts, and knows how to make the magic happen when delivery deadlines are tight. She is an expert analyst, able to deliver superior in-auction insights drawing on a range of technologies and programming languages and is a key contributor to BCG’s bid tools suite.

The course outline is subject to change and a detailed agenda will be shared after enrollment.