Designing reverse auctions for solar power as a potential energy access solution for the Nigeria power sector

Congratulations to Wale Arowolo who published his paper “Designing reverse auctions for solar power as a potential energy access
solution for the Nigeria power sector
” in The Electricity Journal 32 (2019) 106635.

Abstract

The Nigeria Power sector is on the precipice of financial and technical collapse. Recovering the financial deficit of over US$3.1 billion created within three years (ex-post reform), and the struggle to increase the grid power access above 4000 MW for about 200 Million people are some of the key burning issues in the sector. Given that about 87 million people do not have access to the grid in Nigeria, this paper proposes reverse auction market design for decentralized offgrid solar PV deployment as a potential solution for the Nigeria Power sector.

First, it reviews reverse auctions in SSA, the key market design variables and the requirements for a successful solar auction plus storage technology design. Second, it argues that reverse auctions can be successfully run in Nigeria with well-designed market variables. Third, it provides the market design variables adaptable to the Nigeria case to achieve a successful auction run. Finally, it argues that these variables should be built on a foundation of a robust institutional and regulatory framework to be successful. This paper thus recommends designing reverse auctions for offgrid/minigrid solar PV plus storage technology as a potential solution to increase power access and to attract investment considering the financial and grid constraints in the Nigeria Power sector. Furthermore, it recommends that grants for offgrid electrification with Solar Home Systems for rural areas should be further explored.

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