Renewable Energy Auctions Toolkit

Happy woman relaxing with wind generators turbines beautiful sunset background.
Happy woman relaxing with wind generators turbines beautiful sunset background in Khao Kho mountain, Petchabun, Thailand.
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Renewable energy auctions have emerged as the best practice for procuring least-cost energy. This competitive, transparent process helps countries meet their energy goals and attract private investment on their journey to self-reliance.

USAID helps partner countries transition to a more resilient energy sector, powered by renewable energy. In today’s rapidly evolving renewable energy marketplace, it can be challenging to keep track of current best practices in renewable energy policy, innovations, and market trends. Auctions are achieving historically low prices globally while promoting private investment in renewable energy for sustainable development gains.

An auction is a competitive process for procuring electricity generated by renewable energy. In an auction, energy project developers bid against each other to supply energy through long-term contracts at the lowest possible price. Awards are generally made solely based on bids submitted by participating energy providers according to transparent award rules. An auction enables a policymaker to buy renewable energy at competitive prices while advancing specific country development and energy policy goals. For example, location incentives can advance grid and system integration of awarded projects.

Regardless of the maturity of a country’s renewable energy market, auctions can establish fair prices, reduce windfall profits for power producers, and lower electricity costs for utilities and consumers. Auctions can facilitate an open and transparent procurement process thereby increasing competition, improving efficiency, and reducing corruption. Auctions can also increase the ability of policymakers to steer the buildup of renewable energy capacities more precisely over time and location and spur private investment by guaranteeing that projects will be awarded at fair prices.

Country policymakers, international development professionals, and energy stakeholders can use the white papers, guides, training materials, case studies, and sample auction documents in this toolkit to design and implement successful energy auctions that expand access to affordable and sustainable clean energy. This toolkit draws on USAID’s experience supporting auctions globally in Afghanistan, Colombia, El Salvador, India, Kazakhstan, and Mexico. USAID’s work also draws on additional insights from sub-Saharan Africa gained through Power Africa’s support to the International Finance Corporation’s Scaling Solar initiative in Ethiopia, Senegal, and Zambia.

USAID invites experienced policymakers and developers to submit content for this page. Reports, case studies, and other resources can be sent to slawson@usaid.gov.

  • Introduction to Auctions

    When utilized strategically, auctions can facilitate competitive renewable energy price setting, lower costs, expand access to affordable and sustainable energy, and increase transparency of energy procurement. Learn more

  • Designing Auctions for Specific Objectives

    Energy auctions can lower prices while advancing specific country development and policy goals. Good auction design is tailored to national policy objectives, market conditions, and institutional capacities. Learn more

  • Renewable Energy Integration in Systems and Markets

    As auction programs mature and the shares of renewable energy increase, countries must integrate the energy procured into their power systems effectively and improve their markets. Learn more

  • Training for Auction Programs

    USAID offers in-person training to help you understand, design, and implement auction programs. You can watch recordings and view training material on auction design, bidding simulations, and advanced design elements. Learn more

  • Country Experience

    USAID and policymakers around the world who have designed and implemented auctions share valuable insights, global trends, and lessons learned. Learn more

  • Resources

    Resources include case studies, fact sheets, guides, presentations and white papers. Learn more

Last updated: July 16, 2020

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