World embraces RE tenders: REN21

The world is moving decisively towards the tendering of large-scale renewables projects, and slowing its adoption of pure feed-in tariffs, as technologies mature and countries gain a better understanding of them, says a new report from REN21.

More countries around the world have policies in place supporting renewables, and those policies are becoming increasingly sophisticated – if not always more generous – in their treatment of wind and solar, according to REN21’s annual Global Status Report.

By the beginning of 2014, 95 developing countries had renewables support policies in place – up from just 15 in 2005.

Indeed, with support mechanisms now in place in 144 countries globally, there are few virgin markets to crack – and the focus is shifting to the refinement of existing policies.

One of the most important trends underway is the move toward competitive bidding for large renewables projects – a trend that has been led by developing countries, and by Latin America in particular.

As many as 55 countries now hold or are planning to hold public renewables tenders, up from nine countries just five years ago, according to Paris-based REN21.

Brazil is perhaps the most prominent and successful example of such a system, and it has spawned many imitators. Last year Brazil, El Salvador, Peru and Uruguay collectively issued tenders for more than 6.6GW of renewable-power capacity, the report claims.

South Africa has also built up a widely respected tendering system over the past few years. To date Pretoria has carried out three major bidding rounds – with a flood of projects now being taken onto the grid, and another tender round for wind and PV lined up for next year.

India’s National Solar Mission is also based on competitive bidding, and the system has led to bids for large PV projects that would have been unimaginable just a few years ago - leading some critics to call it a 'race to the bottom'.

But importantly, the report also notes that the tendering craze is now spreading throughout the developed world, suggesting that it may be here to stay.

Offshore wind zones are now being tendered out on a competitive basis off the coasts of countries ranging from France to the US, while Italy last year held its second onshore wind auction.

Norway recently awarded $3.3bn worth of onshore wind capacity, and even Russia has got in on the act – having recently selected 509MW of capacity, mostly PV, out of a tender.

In spite of the move towards competitive bidding, feed-in tariffs renewable portfolio standards remain the most widely used support mechanisms globally, REN21 notes.