Abstract
Auctions have recently been regarded as a useful alternative to other support schemes for setting the remuneration of renewable electricity (RES-E) worldwide. They have also been increasingly adopted in the sub-Saharan Africa (SSA) region, mostly due to their promise to support the deployment of RES-E projects cost-effectively. The aim of this article is to identify the design elements of RES-E auctions in SSA and assess their pros and cons with respect to different criteria. The results show that the design elements adopted in the SSA auctions are similar to other countries, but some design elements are deemed very relevant in order to address specific constraints to RES-E investments in SSA countries, including pre‑selection of sites, technology-specific (solar PV), and price‑only auctions. However, the main distinctive feature of auctions in SSA is that they are part of a broader policy mix of support mechanisms aimed at de‑risking and providing technical support.
Highlights
Many countries in sub-Saharan Africa (SSA) have experienced or are currently experiencing an energy crisis
The main support instruments implemented within the GET FiT programme include: the GET FiT Premium Payment Mechanism (GFPPM),11 a standardised set of legal documents (including bankable power purchasing agreements (PPAs), implementation agreements, and developer financing agreements for small independent power producers (IPPs)), World Bank International Development Association (IDA) Partial Risk Guarantee (PRG) Facility, the Technical Assistance (TA) Facility,12 an interconnection component and additional funds to build new interconnection infrastructure and refurbish existing infrastructure (Castalia LLC 2016)
Several lessons can be extracted from the experience with auctions in the three countries analysed
Summary
Many countries in sub-Saharan Africa (SSA) have experienced or are currently experiencing an energy crisis. Six-hundred million people in SSA lack access to electricity (Castellanos et al 2015). With an electrification rate of only 26 per cent (World Bank 2017), the region has 13 per cent of the world’s population, but 48 per cent of the share of the global population without access to electricity. SSA is the only region in the world where the absolute number of people living without electricity is increasing (IEA 2014: 30). Some authors provide in-depth analyses of the SSA electricity sector (see Castellanos et al 2015; KPMG 2016; Quitzow et al 2016; Eberhard et al 2016; Climatescope 2016; IEA 2014).
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