Renewable energy auctions: Southeast Asia

Renewable energy auctions have become a popular instrument for the deployment of renewables around the world, and Southeast Asia is no exception. Within the region, however, countries have different contexts and starting points, and auction design elements and outcomes have varied greatly.

Experience in Southeast Asia shows that the success of auctions greatly depends on clear, transparent and accessible information regarding auction documentation and bidding procedures. It also demonstrates that, when setting qualification requirements, finding a balance between screening out bidders that may underperform and attracting enough players to bid to benefit from competition is key.

Local content rules have been introduced as pre-requisites for participating in the auction or as criteria for the selection of winners. Such measures can be important tools to support the development of domestic renewable energy industries, even if they may result in higher prices, at least on the short term. The development of local industries has been a priority in the region, especially for solar PV, with large potential for innovation and job creation.