Stand-alone renewable energy auctions: The case of Peru

Electrification policies are crucial to improve the welfare of rural populations worldwide. In this context, auctionsfor the deployment of stand-alone solar home systems (SASHS) are an appropriate alternative to facilitate accessto electricity in rural areas. The aim of this paper is to analyze the design elements and functioning of the SASHSauction in Peru in order to derive lessons for the effective and efficient design of those auctions. Based on an an-alytical framework developed elsewhere, this article draws on official documents and data, secondary materialand interviews with stakeholders. Our results show that some design elements are particularly suitable in thisregard. In contrast to renewable electricity auctions in general, for which the volume auctioned is usually setas capacity (MW) or generation (MWh), the volume of SASHS auctions should be set in terms of the numberofSASHS providinganelectricity service.Geographical diversity,with different auctionsper region, would ensurethe adoption of a minimum amount of SASHS in a given geographical area. Financial solvency, but not technicalreputation, should be required. Otherwise, only the incumbents would be able to participate in the auction. Thechoice of technology-specific, price-only, sealed-bid, single-item auctions brings benefits in terms of economiesof scale, lower support or transaction costs and a greater transparency or simplicity. A correction factor on theremuneration which accounts for the quality of the service, as applied in the Peru auction, is suitable for thistype of auctions. Finally, provision of technical information, which facilitates the participation in the auction,and the implementation of a non-disclosed ceiling price are deemed appropriate. In contrast, given the low pres-ence of local companies in the Peruvian PV market, the adoption of local content requirements would lead tohigher support costs without significantly increasing the local development potential.Dr. Cabeza would like to thank the Catalan Government forthe quality accreditation given to her research group GREiA (2017 SGR1537). GREiA is certified agent TECNIO in the category of technology de-velopers from the Government of Catalonia. This work is partially sup-ported by ICREA under the ICREA Academia program.Peer reviewe