Policy
A capacity auction is a competitive bidding process where renewable energy developers submit bids to build and operate power generation projects. Governments or grid operators use capacity auctions to procure renewable energy at competitive prices, awarding contracts to the lowest-cost qualified bidders. Capacity auctions have become a primary mechanism for renewable energy deployment globally, particularly in emerging markets like Brazil and South Africa where Energea invests. These auctions drive down project costs through competition while ensuring projects meet technical and financial standards. Winning bidders secure long-term power purchase agreements (PPAs) that provide revenue certainty, making projects bankable and attractive to investors seeking stable, contracted cash flows.