The single-buyer model (SBM) is one of the widely adopted electricity market models in developing countries due to its advantages over complex competitive market arrangements. Yet its reliance on fixed-price power purchase agreements (PPAs) can cause economic inefficiencies as variable renewable energy (VRE) penetration increases. This paper examines how the SBM design can be adapted to improve economic efficiency under the energy transition. We conduct a comparative analysis of five major single-buyer countries (Indonesia, Malaysia, Saudi Arabia, South Africa, and the United Arab Emirates), assessing their market arrangements and settlement frameworks for VRE technologies. Our analysis reveals that current designs can handle a low share of VRE penetration; however, increasing VRE share necessitates measures for temporal and spatial value signals for VRE, incentives for flexibility provision, and a fair distribution of system costs. Based on these findings, we propose recommendations centered on expanding procurement mandates to include flexibility services, introducing greater granularity in dispatch and settlement, and implementing adaptive planning frameworks.
