Market Design and Regulation During the Transition to Low-Carbon Power Systems

Competitive electricity markets are being challenged by the need to decarbonise electricity production, in the aftermath of the Paris Agreement reached at COP21.

The average CO2 intensity of electricity needs to fall by more than 96 percent between 2015 and 2050 to achieve the goal of limiting global temperature increase to 2 degrees, according to IEA’s projections for OECD economies.

New designs for electricity markets are needed to reach this goal, and manage some of the issues that come with today’s low-carbon generation technologies – for example, storage and intermittency remain challenging for renewables, while nuclear is facing additional scrutiny for security.

IEA recently released “Re-powering Markets”, a report that analyses the electricity market framework for low-carbon power systems. Find out more about electricity market design, the policy and regulatory aspects, and the balance that policy makers must strike between supporting innovation and competition while mobilising capital for the deployment of low-carbon sources here.

By : IEA