Auctions for mature technologies/market



A growing number of countries are shifting towards the more cost-efficient instrument of auctioning renewable energy capacities or electricity generation. Auctioning introduces competition in the market, leading to least-cost price realisation. The sharp reduction in the prices of renewable energy, in many cases, cheaper than conventional power, has been attributed to the onset auctioning regime to a large extent. In 2018, 48 countries across the globe held auctions renewable energy technologies.

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Ethiopian solar auctions


Auctions are proving to be one of the most successful policy instruments for renewable energy in Africa. Ethiopia recently concluded auctions for solar power projects of 250 MW capacity with a lowest bid of US$0.02526 per kWh offered by Saudi Arabia based developer ACWA Power. This rate is the lowest price for solar in Africa. These low prices were enabled by a carefully designed investment framework implemented by the government of Ethiopia and the World Bank, under the Scaling Solar programme. The International Finance Corporation (IFC) helped in carrying out the technical, financial, and social feasibility studies, as well as the design of the auctions. A financing proposal, payment guarantee and insurance details were offered as part of the tenders to reduce the risk exposure of potential bidders. This played a significant role in attracting 12 bidders.

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