Electricity market design and renewable energy auctions: Uganda country study

In 2014, Uganda became the first sub-Saharan African country outside of South Africa to embark on a renewable-energy auction programme through competitive bidding. The hybrid nature of the procurement mechanism – whereby winning projects received a feed-in tariff set by the regulator and a competitively set premium payment – made the programme particularly attractive to investors.  Although the two winning projects were relatively small by global standards, they became the largest solar PV installations in East Africa when they were commissioned in 2016 and 2017 (IRENA, 2018).   In this report by the Power Futures Lab, we analyse the factors that underpinned the outcomes of the auction, primarily from the perspective of price and investment. We also highlight lessons learned from the design and management of the auction in the hope that these might usefully inform future initiatives.