Renewable energy auctions: bidding our way to a greener future

The European Bank for Reconstruction and Development (EBRD) advocates for the use of competitive auctions to drive down the cost of renewable energy, citing dramatic price reductions in Jordan and Egypt. The EBRD emphasizes that competition spurs technical innovation and lowers the cost of capital, enabling the financing of larger-scale projects. The bank's strategy involves increasing green energy financing across 38 emerging markets, paired with policy reforms to harness market forces, while viewing natural gas as a necessary back-up for intermittent renewables.

• Competitive bidding has led to significant reductions in renewable energy costs, as demonstrated in Jordan, where costs fell by 85% over four years. A solar photovoltaic plant funded in 2014 had a feed-in tariff of 16.9 US cents per kilowatt hour, while a project awarded under a competitive scheme in 2016 cost 6.1 USc/kWh, and a second auction winner in September offered under 2.5 USc/kWh.
• Egypt has also benefited from competitive tenders, with bids for the 200MW Kom Ombo solar tender falling under 3 USc/kWh. The EBRD has scaled its financing in Egypt, including a single site with 750MW of solar power financed last year in collaboration with the Green Climate Fund and other donors.
• Market competition drives down costs not only through price discovery but by incentivizing technical innovations—such as larger wind turbines and more efficient solar panels—and by reducing the cost of capital for projects.
• The EBRD identifies a dual approach to decarbonization: doubling the global volume of electricity used to decarbonize hard-to-abate sectors (transport, heating, and industry) and ensuring more than 70 per cent of that electricity comes from low-carbon renewable sources, mainly wind and solar photovoltaic.
• Natural gas is viewed as a critical transitional and supporting energy source to replace coal plants and provide back-up capacity for intermittent renewable energy.

APA

Parshad, N. (2018). Renewable energy auctions: bidding our way to a greener future. World Economic Forum. https://www.weforum.org/stories/energy-transition/renewable-energy-auctions-bidding-our-way-to-a-greener-future/

Chicago

Parshad, Nandita. Renewable energy auctions: bidding our way to a greener future. World Economic Forum, 2018. https://www.weforum.org/stories/energy-transition/renewable-energy-auctions-bidding-our-way-to-a-greener-future/.

Wikipedia

{{cite press release |last1=Parshad |first1=Nandita |title=Renewable energy auctions: bidding our way to a greener future |publisher=World Economic Forum |date=9 November 2018 |url=https://www.weforum.org/stories/energy-transition/renewable-energy-auctions-bidding-our-way-to-a-greener-future/ |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@misc{parshad2018renewable, author = {Parshad, Nandita}, title = {{Renewable energy auctions: bidding our way to a greener future}}, publisher = {World Economic Forum}, year = {2018}, month = nov, url = {https://www.weforum.org/stories/energy-transition/renewable-energy-auctions-bidding-our-way-to-a-greener-future/}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }