Regulation and Sustainable Energy Systems

Abstract

This article discusses the extent to which regulation has a role to play in the development and operation of sustainable energy systems, in other words, the extent to which regulators' decisions should be shaped by broader policy goals on sustainability, and how regulators might devise frameworks to encourage the deployment of sustainable technologies and practices. Its basic premise is that the development of sustainable energy systems is vital in the public interest and that economic regulators can play a key role in delivering such systems. This article highlights that inherent conflicts between policy and regulatory objectives, especially in an area that seeks to incentivise investment, achieve goals in terms of climate change commitments and enhance efficiency. It points to the tensions that arise between levels of government as well as in terms of allocation of decision-making authority between government departments and supposedly independent regulatory agencies.