Electricity market design and renewable energy auctions – Ethiopia country study
Ethiopia’s renewable energy auction programmes have the potential to become regional best practice. The country has managed to twice secure the lowest solar PV project prices in sub-Saharan Africa through its procurement programmes. These bidder commitments still need to be financed and built for the country to realise this potential, and the experience of the country’s pioneer independent power producers (IPPs) shows that this will be no small feat.
How Ethiopia managed to secure the solar PV project tariffs, why it has so far struggled to secure existing investments, and how future auction rounds can be improved will form the key questions guiding this analysis. The report will consider the contributing elements of success for IPPs at the country, project, and programme levels. It will, in particular, provide evidence of the importance of project site selection and preparation; risk allocation, mitigation and credit enhancement; the link between dynamic, least-cost planning and procurement; and the centrality of institutions for securing IPP investments at affordable prices.