Map for Elevating Decarbonization in Energy Regulation

Introduction

The Regulatory Energy Transition Accelerator (RETA, https://retatheaccelerator.org/), launched at COP26, is an initiative to build capacity for energy regulators as they work to advance toward a clean energy transition. Serving as a resource hub for regulators, RETA’s flagship project, Elevating the Priority of Decarbonization in Energy Regulators’ Decision Making, focuses on capturing and sharing insights from regulators’ experiences in elevating the priority of decarbonization in their decision making.

The two main products of the project are this webpage and the report. The report covers the rationale for the acceleration of the clean energy transition, highlights of the interviews with 25 regulators and five experts and offers an in-depth look at nine examples of creative prioritization of decarbonization in regulatory decision making. This webpage complements the report’s nine examples with two dozen more, providing a more global perspective of regulatory decarbonization implementation experiences.

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North America
Caribbean
South America
Europe
Eurasia
Australia
Africa
Asia

Turks & Caicos

Example coming soon. (Turks & Caicos)

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Similar Examples

Example coming soon. (Turks & Caicos)

Example coming soon. (Argentina)

Example coming soon (Azerbaijan)

Example coming soon (Bahamas)

Example coming soon. (Michigan)

Example coming soon. (Grenada)

Example coming soon. (Michigan)

Example coming soon. (British Columbia)

Example coming soon.

Example coming soon (Australia & Western Aus)

Example coming soon. (Italy)

Example coming soon. (New Mexico)

Example coming soon (United Kingdom)

Example coming soon. (British Columbia)

Example coming soon. (Michigan)

CNE's Adaptative Role in Decarbonization Efforts (Chile)

GNERC's Strategic Initiatives: Implementing a Sustainable Energy Landscape (Georgia)

Japan’s Launch of Long-Term Decarbonized Power Resource Auctions (Japan)

New Mexico’s Regulator Ensuring a Just Transition Through Energy Transition Bonds (New Mexico)

EgyptERA’s Strategic Initiatives Paving the Way for Renewable Energy and Efficiency

Responding to a broader regulatory mandate (United Kingdom)

Assessing ratepayer funding of a hybrid heating program (Canada, Québec)

CRE’s Role in Fostering Innovation within France's Energy Sector through Regulatory Sandboxes (France)

Enabling regulatory change through regulatory sandboxes (Italy)

Getting government support for electricity tariffs that promote electrification (Ontario)

Addressing carbon content in solar PV procurement (France)

Changes in transmission permitting — Becoming more deeply involved in transmission line siting (Germany)

Dealing with a loss of gas customers- Addressing implications of electrification: gas disconnection policy (Australia)

Efficiency Mandates and Externalities Internalization: Shaping Renewable Energy through Regulatory Insight, Policy, Legal and Regulatory Adaptation (Mexico)

Interpreting new requirements to consider decarbonization in regulatory decision making (Australia)

Balancing Growth and Grid Stability: Revising Solar PV Installation Limits and Pricing in Saint Lucia's Transition to Renewable Energy (Saint Lucia)

Progressive Hydrogen Initiatives and Regulatory Framework Development to Advance Decarbonization (France)

EPRA's Regulatory Innovations Fueling Renewable Adoption and EV Infrastructure (Kenya)

Regulatory Initiatives for Enhanced Grid Flexibility: Setting Tariffs and Frameworks for Electricity Storage in Barbados

Strengthening Grenada's Resilience: Transitioning to Renewable Energy Amidst Climate Challenges (Grenada)

Enhancing Regulatory Capabilities: URE's Role and Challenges in Poland's Decarbonization Journey (Poland)

Planning requirements — Requiring utilities to model a decarbonized future (Michigan)

Argentina

Example coming soon. (Argentina)

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Similar Examples

Example coming soon. (Turks & Caicos)

Example coming soon. (Argentina)

Example coming soon (Azerbaijan)

Example coming soon (Bahamas)

Example coming soon. (Michigan)

Example coming soon. (Grenada)

Example coming soon. (Michigan)

Example coming soon. (British Columbia)

Example coming soon.

Example coming soon (Australia & Western Aus)

Example coming soon. (Italy)

Example coming soon. (New Mexico)

Example coming soon (United Kingdom)

Example coming soon. (British Columbia)

Example coming soon. (Michigan)

CNE's Adaptative Role in Decarbonization Efforts (Chile)

GNERC's Strategic Initiatives: Implementing a Sustainable Energy Landscape (Georgia)

Japan’s Launch of Long-Term Decarbonized Power Resource Auctions (Japan)

New Mexico’s Regulator Ensuring a Just Transition Through Energy Transition Bonds (New Mexico)

EgyptERA’s Strategic Initiatives Paving the Way for Renewable Energy and Efficiency

Responding to a broader regulatory mandate (United Kingdom)

Assessing ratepayer funding of a hybrid heating program (Canada, Québec)

CRE’s Role in Fostering Innovation within France's Energy Sector through Regulatory Sandboxes (France)

Enabling regulatory change through regulatory sandboxes (Italy)

Getting government support for electricity tariffs that promote electrification (Ontario)

Addressing carbon content in solar PV procurement (France)

Changes in transmission permitting — Becoming more deeply involved in transmission line siting (Germany)

Dealing with a loss of gas customers- Addressing implications of electrification: gas disconnection policy (Australia)

Efficiency Mandates and Externalities Internalization: Shaping Renewable Energy through Regulatory Insight, Policy, Legal and Regulatory Adaptation (Mexico)

Interpreting new requirements to consider decarbonization in regulatory decision making (Australia)

Balancing Growth and Grid Stability: Revising Solar PV Installation Limits and Pricing in Saint Lucia's Transition to Renewable Energy (Saint Lucia)

Progressive Hydrogen Initiatives and Regulatory Framework Development to Advance Decarbonization (France)

EPRA's Regulatory Innovations Fueling Renewable Adoption and EV Infrastructure (Kenya)

Regulatory Initiatives for Enhanced Grid Flexibility: Setting Tariffs and Frameworks for Electricity Storage in Barbados

Strengthening Grenada's Resilience: Transitioning to Renewable Energy Amidst Climate Challenges (Grenada)

Enhancing Regulatory Capabilities: URE's Role and Challenges in Poland's Decarbonization Journey (Poland)

Planning requirements — Requiring utilities to model a decarbonized future (Michigan)

Azerbaijan

Example coming soon (Azerbaijan)

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Similar Examples

Example coming soon. (Turks & Caicos)

Example coming soon. (Argentina)

Example coming soon (Azerbaijan)

Example coming soon (Bahamas)

Example coming soon. (Michigan)

Example coming soon. (Grenada)

Example coming soon. (Michigan)

Example coming soon. (British Columbia)

Example coming soon.

Example coming soon (Australia & Western Aus)

Example coming soon. (Italy)

Example coming soon. (New Mexico)

Example coming soon (United Kingdom)

Example coming soon. (British Columbia)

Example coming soon. (Michigan)

CNE's Adaptative Role in Decarbonization Efforts (Chile)

GNERC's Strategic Initiatives: Implementing a Sustainable Energy Landscape (Georgia)

Japan’s Launch of Long-Term Decarbonized Power Resource Auctions (Japan)

New Mexico’s Regulator Ensuring a Just Transition Through Energy Transition Bonds (New Mexico)

EgyptERA’s Strategic Initiatives Paving the Way for Renewable Energy and Efficiency

Responding to a broader regulatory mandate (United Kingdom)

Assessing ratepayer funding of a hybrid heating program (Canada, Québec)

CRE’s Role in Fostering Innovation within France's Energy Sector through Regulatory Sandboxes (France)

Enabling regulatory change through regulatory sandboxes (Italy)

Getting government support for electricity tariffs that promote electrification (Ontario)

Addressing carbon content in solar PV procurement (France)

Changes in transmission permitting — Becoming more deeply involved in transmission line siting (Germany)

Dealing with a loss of gas customers- Addressing implications of electrification: gas disconnection policy (Australia)

Efficiency Mandates and Externalities Internalization: Shaping Renewable Energy through Regulatory Insight, Policy, Legal and Regulatory Adaptation (Mexico)

Interpreting new requirements to consider decarbonization in regulatory decision making (Australia)

Balancing Growth and Grid Stability: Revising Solar PV Installation Limits and Pricing in Saint Lucia's Transition to Renewable Energy (Saint Lucia)

Progressive Hydrogen Initiatives and Regulatory Framework Development to Advance Decarbonization (France)

EPRA's Regulatory Innovations Fueling Renewable Adoption and EV Infrastructure (Kenya)

Regulatory Initiatives for Enhanced Grid Flexibility: Setting Tariffs and Frameworks for Electricity Storage in Barbados

Strengthening Grenada's Resilience: Transitioning to Renewable Energy Amidst Climate Challenges (Grenada)

Enhancing Regulatory Capabilities: URE's Role and Challenges in Poland's Decarbonization Journey (Poland)

Planning requirements — Requiring utilities to model a decarbonized future (Michigan)

Bahamas

Example coming soon (Bahamas)

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Similar Examples

Example coming soon. (Turks & Caicos)

Example coming soon. (Argentina)

Example coming soon (Azerbaijan)

Example coming soon (Bahamas)

Example coming soon. (Michigan)

Example coming soon. (Grenada)

Example coming soon. (Michigan)

Example coming soon. (British Columbia)

Example coming soon.

Example coming soon (Australia & Western Aus)

Example coming soon. (Italy)

Example coming soon. (New Mexico)

Example coming soon (United Kingdom)

Example coming soon. (British Columbia)

Example coming soon. (Michigan)

CNE's Adaptative Role in Decarbonization Efforts (Chile)

GNERC's Strategic Initiatives: Implementing a Sustainable Energy Landscape (Georgia)

Japan’s Launch of Long-Term Decarbonized Power Resource Auctions (Japan)

New Mexico’s Regulator Ensuring a Just Transition Through Energy Transition Bonds (New Mexico)

EgyptERA’s Strategic Initiatives Paving the Way for Renewable Energy and Efficiency

Responding to a broader regulatory mandate (United Kingdom)

Assessing ratepayer funding of a hybrid heating program (Canada, Québec)

CRE’s Role in Fostering Innovation within France's Energy Sector through Regulatory Sandboxes (France)

Enabling regulatory change through regulatory sandboxes (Italy)

Getting government support for electricity tariffs that promote electrification (Ontario)

Addressing carbon content in solar PV procurement (France)

Changes in transmission permitting — Becoming more deeply involved in transmission line siting (Germany)

Dealing with a loss of gas customers- Addressing implications of electrification: gas disconnection policy (Australia)

Efficiency Mandates and Externalities Internalization: Shaping Renewable Energy through Regulatory Insight, Policy, Legal and Regulatory Adaptation (Mexico)

Interpreting new requirements to consider decarbonization in regulatory decision making (Australia)

Balancing Growth and Grid Stability: Revising Solar PV Installation Limits and Pricing in Saint Lucia's Transition to Renewable Energy (Saint Lucia)

Progressive Hydrogen Initiatives and Regulatory Framework Development to Advance Decarbonization (France)

EPRA's Regulatory Innovations Fueling Renewable Adoption and EV Infrastructure (Kenya)

Regulatory Initiatives for Enhanced Grid Flexibility: Setting Tariffs and Frameworks for Electricity Storage in Barbados

Strengthening Grenada's Resilience: Transitioning to Renewable Energy Amidst Climate Challenges (Grenada)

Enhancing Regulatory Capabilities: URE's Role and Challenges in Poland's Decarbonization Journey (Poland)

Planning requirements — Requiring utilities to model a decarbonized future (Michigan)

Michigan 4

Example coming soon. (Michigan)

Back to Map

Similar Examples

Example coming soon. (Turks & Caicos)

Example coming soon. (Argentina)

Example coming soon (Azerbaijan)

Example coming soon (Bahamas)

Example coming soon. (Michigan)

Example coming soon. (Grenada)

Example coming soon. (Michigan)

Example coming soon. (British Columbia)

Example coming soon.

Example coming soon (Australia & Western Aus)

Example coming soon. (Italy)

Example coming soon. (New Mexico)

Example coming soon (United Kingdom)

Example coming soon. (British Columbia)

Example coming soon. (Michigan)

CNE's Adaptative Role in Decarbonization Efforts (Chile)

GNERC's Strategic Initiatives: Implementing a Sustainable Energy Landscape (Georgia)

Japan’s Launch of Long-Term Decarbonized Power Resource Auctions (Japan)

New Mexico’s Regulator Ensuring a Just Transition Through Energy Transition Bonds (New Mexico)

EgyptERA’s Strategic Initiatives Paving the Way for Renewable Energy and Efficiency

Responding to a broader regulatory mandate (United Kingdom)

Assessing ratepayer funding of a hybrid heating program (Canada, Québec)

CRE’s Role in Fostering Innovation within France's Energy Sector through Regulatory Sandboxes (France)

Enabling regulatory change through regulatory sandboxes (Italy)

Getting government support for electricity tariffs that promote electrification (Ontario)

Addressing carbon content in solar PV procurement (France)

Changes in transmission permitting — Becoming more deeply involved in transmission line siting (Germany)

Dealing with a loss of gas customers- Addressing implications of electrification: gas disconnection policy (Australia)

Efficiency Mandates and Externalities Internalization: Shaping Renewable Energy through Regulatory Insight, Policy, Legal and Regulatory Adaptation (Mexico)

Interpreting new requirements to consider decarbonization in regulatory decision making (Australia)

Balancing Growth and Grid Stability: Revising Solar PV Installation Limits and Pricing in Saint Lucia's Transition to Renewable Energy (Saint Lucia)

Progressive Hydrogen Initiatives and Regulatory Framework Development to Advance Decarbonization (France)

EPRA's Regulatory Innovations Fueling Renewable Adoption and EV Infrastructure (Kenya)

Regulatory Initiatives for Enhanced Grid Flexibility: Setting Tariffs and Frameworks for Electricity Storage in Barbados

Strengthening Grenada's Resilience: Transitioning to Renewable Energy Amidst Climate Challenges (Grenada)

Enhancing Regulatory Capabilities: URE's Role and Challenges in Poland's Decarbonization Journey (Poland)

Planning requirements — Requiring utilities to model a decarbonized future (Michigan)

Grenada 2

Example coming soon. (Grenada)

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Similar Examples

Example coming soon. (Turks & Caicos)

Example coming soon. (Argentina)

Example coming soon (Azerbaijan)

Example coming soon (Bahamas)

Example coming soon. (Michigan)

Example coming soon. (Grenada)

Example coming soon. (Michigan)

Example coming soon. (British Columbia)

Example coming soon.

Example coming soon (Australia & Western Aus)

Example coming soon. (Italy)

Example coming soon. (New Mexico)

Example coming soon (United Kingdom)

Example coming soon. (British Columbia)

Example coming soon. (Michigan)

CNE's Adaptative Role in Decarbonization Efforts (Chile)

GNERC's Strategic Initiatives: Implementing a Sustainable Energy Landscape (Georgia)

Japan’s Launch of Long-Term Decarbonized Power Resource Auctions (Japan)

New Mexico’s Regulator Ensuring a Just Transition Through Energy Transition Bonds (New Mexico)

EgyptERA’s Strategic Initiatives Paving the Way for Renewable Energy and Efficiency

Responding to a broader regulatory mandate (United Kingdom)

Assessing ratepayer funding of a hybrid heating program (Canada, Québec)

CRE’s Role in Fostering Innovation within France's Energy Sector through Regulatory Sandboxes (France)

Enabling regulatory change through regulatory sandboxes (Italy)

Getting government support for electricity tariffs that promote electrification (Ontario)

Addressing carbon content in solar PV procurement (France)

Changes in transmission permitting — Becoming more deeply involved in transmission line siting (Germany)

Dealing with a loss of gas customers- Addressing implications of electrification: gas disconnection policy (Australia)

Efficiency Mandates and Externalities Internalization: Shaping Renewable Energy through Regulatory Insight, Policy, Legal and Regulatory Adaptation (Mexico)

Interpreting new requirements to consider decarbonization in regulatory decision making (Australia)

Balancing Growth and Grid Stability: Revising Solar PV Installation Limits and Pricing in Saint Lucia's Transition to Renewable Energy (Saint Lucia)

Progressive Hydrogen Initiatives and Regulatory Framework Development to Advance Decarbonization (France)

EPRA's Regulatory Innovations Fueling Renewable Adoption and EV Infrastructure (Kenya)

Regulatory Initiatives for Enhanced Grid Flexibility: Setting Tariffs and Frameworks for Electricity Storage in Barbados

Strengthening Grenada's Resilience: Transitioning to Renewable Energy Amidst Climate Challenges (Grenada)

Enhancing Regulatory Capabilities: URE's Role and Challenges in Poland's Decarbonization Journey (Poland)

Planning requirements — Requiring utilities to model a decarbonized future (Michigan)

Michigan 3

Example coming soon. (Michigan)

Back to Map

Similar Examples

Example coming soon. (Turks & Caicos)

Example coming soon. (Argentina)

Example coming soon (Azerbaijan)

Example coming soon (Bahamas)

Example coming soon. (Michigan)

Example coming soon. (Grenada)

Example coming soon. (Michigan)

Example coming soon. (British Columbia)

Example coming soon.

Example coming soon (Australia & Western Aus)

Example coming soon. (Italy)

Example coming soon. (New Mexico)

Example coming soon (United Kingdom)

Example coming soon. (British Columbia)

Example coming soon. (Michigan)

CNE's Adaptative Role in Decarbonization Efforts (Chile)

GNERC's Strategic Initiatives: Implementing a Sustainable Energy Landscape (Georgia)

Japan’s Launch of Long-Term Decarbonized Power Resource Auctions (Japan)

New Mexico’s Regulator Ensuring a Just Transition Through Energy Transition Bonds (New Mexico)

EgyptERA’s Strategic Initiatives Paving the Way for Renewable Energy and Efficiency

Responding to a broader regulatory mandate (United Kingdom)

Assessing ratepayer funding of a hybrid heating program (Canada, Québec)

CRE’s Role in Fostering Innovation within France's Energy Sector through Regulatory Sandboxes (France)

Enabling regulatory change through regulatory sandboxes (Italy)

Getting government support for electricity tariffs that promote electrification (Ontario)

Addressing carbon content in solar PV procurement (France)

Changes in transmission permitting — Becoming more deeply involved in transmission line siting (Germany)

Dealing with a loss of gas customers- Addressing implications of electrification: gas disconnection policy (Australia)

Efficiency Mandates and Externalities Internalization: Shaping Renewable Energy through Regulatory Insight, Policy, Legal and Regulatory Adaptation (Mexico)

Interpreting new requirements to consider decarbonization in regulatory decision making (Australia)

Balancing Growth and Grid Stability: Revising Solar PV Installation Limits and Pricing in Saint Lucia's Transition to Renewable Energy (Saint Lucia)

Progressive Hydrogen Initiatives and Regulatory Framework Development to Advance Decarbonization (France)

EPRA's Regulatory Innovations Fueling Renewable Adoption and EV Infrastructure (Kenya)

Regulatory Initiatives for Enhanced Grid Flexibility: Setting Tariffs and Frameworks for Electricity Storage in Barbados

Strengthening Grenada's Resilience: Transitioning to Renewable Energy Amidst Climate Challenges (Grenada)

Enhancing Regulatory Capabilities: URE's Role and Challenges in Poland's Decarbonization Journey (Poland)

Planning requirements — Requiring utilities to model a decarbonized future (Michigan)

British Columbia 2

Example coming soon. (British Columbia)

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Similar Examples

Example coming soon. (Turks & Caicos)

Example coming soon. (Argentina)

Example coming soon (Azerbaijan)

Example coming soon (Bahamas)

Example coming soon. (Michigan)

Example coming soon. (Grenada)

Example coming soon. (Michigan)

Example coming soon. (British Columbia)

Example coming soon.

Example coming soon (Australia & Western Aus)

Example coming soon. (Italy)

Example coming soon. (New Mexico)

Example coming soon (United Kingdom)

Example coming soon. (British Columbia)

Example coming soon. (Michigan)

CNE's Adaptative Role in Decarbonization Efforts (Chile)

GNERC's Strategic Initiatives: Implementing a Sustainable Energy Landscape (Georgia)

Japan’s Launch of Long-Term Decarbonized Power Resource Auctions (Japan)

New Mexico’s Regulator Ensuring a Just Transition Through Energy Transition Bonds (New Mexico)

EgyptERA’s Strategic Initiatives Paving the Way for Renewable Energy and Efficiency

Responding to a broader regulatory mandate (United Kingdom)

Assessing ratepayer funding of a hybrid heating program (Canada, Québec)

CRE’s Role in Fostering Innovation within France's Energy Sector through Regulatory Sandboxes (France)

Enabling regulatory change through regulatory sandboxes (Italy)

Getting government support for electricity tariffs that promote electrification (Ontario)

Addressing carbon content in solar PV procurement (France)

Changes in transmission permitting — Becoming more deeply involved in transmission line siting (Germany)

Dealing with a loss of gas customers- Addressing implications of electrification: gas disconnection policy (Australia)

Efficiency Mandates and Externalities Internalization: Shaping Renewable Energy through Regulatory Insight, Policy, Legal and Regulatory Adaptation (Mexico)

Interpreting new requirements to consider decarbonization in regulatory decision making (Australia)

Balancing Growth and Grid Stability: Revising Solar PV Installation Limits and Pricing in Saint Lucia's Transition to Renewable Energy (Saint Lucia)

Progressive Hydrogen Initiatives and Regulatory Framework Development to Advance Decarbonization (France)

EPRA's Regulatory Innovations Fueling Renewable Adoption and EV Infrastructure (Kenya)

Regulatory Initiatives for Enhanced Grid Flexibility: Setting Tariffs and Frameworks for Electricity Storage in Barbados

Strengthening Grenada's Resilience: Transitioning to Renewable Energy Amidst Climate Challenges (Grenada)

Enhancing Regulatory Capabilities: URE's Role and Challenges in Poland's Decarbonization Journey (Poland)

Planning requirements — Requiring utilities to model a decarbonized future (Michigan)

France 4

Example coming soon.

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Similar Examples

Example coming soon. (Turks & Caicos)

Example coming soon. (Argentina)

Example coming soon (Azerbaijan)

Example coming soon (Bahamas)

Example coming soon. (Michigan)

Example coming soon. (Grenada)

Example coming soon. (Michigan)

Example coming soon. (British Columbia)

Example coming soon.

Example coming soon (Australia & Western Aus)

Example coming soon. (Italy)

Example coming soon. (New Mexico)

Example coming soon (United Kingdom)

Example coming soon. (British Columbia)

Example coming soon. (Michigan)

CNE's Adaptative Role in Decarbonization Efforts (Chile)

GNERC's Strategic Initiatives: Implementing a Sustainable Energy Landscape (Georgia)

Japan’s Launch of Long-Term Decarbonized Power Resource Auctions (Japan)

New Mexico’s Regulator Ensuring a Just Transition Through Energy Transition Bonds (New Mexico)

EgyptERA’s Strategic Initiatives Paving the Way for Renewable Energy and Efficiency

Responding to a broader regulatory mandate (United Kingdom)

Assessing ratepayer funding of a hybrid heating program (Canada, Québec)

CRE’s Role in Fostering Innovation within France's Energy Sector through Regulatory Sandboxes (France)

Enabling regulatory change through regulatory sandboxes (Italy)

Getting government support for electricity tariffs that promote electrification (Ontario)

Addressing carbon content in solar PV procurement (France)

Changes in transmission permitting — Becoming more deeply involved in transmission line siting (Germany)

Dealing with a loss of gas customers- Addressing implications of electrification: gas disconnection policy (Australia)

Efficiency Mandates and Externalities Internalization: Shaping Renewable Energy through Regulatory Insight, Policy, Legal and Regulatory Adaptation (Mexico)

Interpreting new requirements to consider decarbonization in regulatory decision making (Australia)

Balancing Growth and Grid Stability: Revising Solar PV Installation Limits and Pricing in Saint Lucia's Transition to Renewable Energy (Saint Lucia)

Progressive Hydrogen Initiatives and Regulatory Framework Development to Advance Decarbonization (France)

EPRA's Regulatory Innovations Fueling Renewable Adoption and EV Infrastructure (Kenya)

Regulatory Initiatives for Enhanced Grid Flexibility: Setting Tariffs and Frameworks for Electricity Storage in Barbados

Strengthening Grenada's Resilience: Transitioning to Renewable Energy Amidst Climate Challenges (Grenada)

Enhancing Regulatory Capabilities: URE's Role and Challenges in Poland's Decarbonization Journey (Poland)

Planning requirements — Requiring utilities to model a decarbonized future (Michigan)

Australia and Western Aus

Example coming soon (Australia & Western Aus)

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Similar Examples

Example coming soon. (Turks & Caicos)

Example coming soon. (Argentina)

Example coming soon (Azerbaijan)

Example coming soon (Bahamas)

Example coming soon. (Michigan)

Example coming soon. (Grenada)

Example coming soon. (Michigan)

Example coming soon. (British Columbia)

Example coming soon.

Example coming soon (Australia & Western Aus)

Example coming soon. (Italy)

Example coming soon. (New Mexico)

Example coming soon (United Kingdom)

Example coming soon. (British Columbia)

Example coming soon. (Michigan)

CNE's Adaptative Role in Decarbonization Efforts (Chile)

GNERC's Strategic Initiatives: Implementing a Sustainable Energy Landscape (Georgia)

Japan’s Launch of Long-Term Decarbonized Power Resource Auctions (Japan)

New Mexico’s Regulator Ensuring a Just Transition Through Energy Transition Bonds (New Mexico)

EgyptERA’s Strategic Initiatives Paving the Way for Renewable Energy and Efficiency

Responding to a broader regulatory mandate (United Kingdom)

Assessing ratepayer funding of a hybrid heating program (Canada, Québec)

CRE’s Role in Fostering Innovation within France's Energy Sector through Regulatory Sandboxes (France)

Enabling regulatory change through regulatory sandboxes (Italy)

Getting government support for electricity tariffs that promote electrification (Ontario)

Addressing carbon content in solar PV procurement (France)

Changes in transmission permitting — Becoming more deeply involved in transmission line siting (Germany)

Dealing with a loss of gas customers- Addressing implications of electrification: gas disconnection policy (Australia)

Efficiency Mandates and Externalities Internalization: Shaping Renewable Energy through Regulatory Insight, Policy, Legal and Regulatory Adaptation (Mexico)

Interpreting new requirements to consider decarbonization in regulatory decision making (Australia)

Balancing Growth and Grid Stability: Revising Solar PV Installation Limits and Pricing in Saint Lucia's Transition to Renewable Energy (Saint Lucia)

Progressive Hydrogen Initiatives and Regulatory Framework Development to Advance Decarbonization (France)

EPRA's Regulatory Innovations Fueling Renewable Adoption and EV Infrastructure (Kenya)

Regulatory Initiatives for Enhanced Grid Flexibility: Setting Tariffs and Frameworks for Electricity Storage in Barbados

Strengthening Grenada's Resilience: Transitioning to Renewable Energy Amidst Climate Challenges (Grenada)

Enhancing Regulatory Capabilities: URE's Role and Challenges in Poland's Decarbonization Journey (Poland)

Planning requirements — Requiring utilities to model a decarbonized future (Michigan)

Italy 2

Example coming soon. (Italy)

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Similar Examples

Example coming soon. (Turks & Caicos)

Example coming soon. (Argentina)

Example coming soon (Azerbaijan)

Example coming soon (Bahamas)

Example coming soon. (Michigan)

Example coming soon. (Grenada)

Example coming soon. (Michigan)

Example coming soon. (British Columbia)

Example coming soon.

Example coming soon (Australia & Western Aus)

Example coming soon. (Italy)

Example coming soon. (New Mexico)

Example coming soon (United Kingdom)

Example coming soon. (British Columbia)

Example coming soon. (Michigan)

CNE's Adaptative Role in Decarbonization Efforts (Chile)

GNERC's Strategic Initiatives: Implementing a Sustainable Energy Landscape (Georgia)

Japan’s Launch of Long-Term Decarbonized Power Resource Auctions (Japan)

New Mexico’s Regulator Ensuring a Just Transition Through Energy Transition Bonds (New Mexico)

EgyptERA’s Strategic Initiatives Paving the Way for Renewable Energy and Efficiency

Responding to a broader regulatory mandate (United Kingdom)

Assessing ratepayer funding of a hybrid heating program (Canada, Québec)

CRE’s Role in Fostering Innovation within France's Energy Sector through Regulatory Sandboxes (France)

Enabling regulatory change through regulatory sandboxes (Italy)

Getting government support for electricity tariffs that promote electrification (Ontario)

Addressing carbon content in solar PV procurement (France)

Changes in transmission permitting — Becoming more deeply involved in transmission line siting (Germany)

Dealing with a loss of gas customers- Addressing implications of electrification: gas disconnection policy (Australia)

Efficiency Mandates and Externalities Internalization: Shaping Renewable Energy through Regulatory Insight, Policy, Legal and Regulatory Adaptation (Mexico)

Interpreting new requirements to consider decarbonization in regulatory decision making (Australia)

Balancing Growth and Grid Stability: Revising Solar PV Installation Limits and Pricing in Saint Lucia's Transition to Renewable Energy (Saint Lucia)

Progressive Hydrogen Initiatives and Regulatory Framework Development to Advance Decarbonization (France)

EPRA's Regulatory Innovations Fueling Renewable Adoption and EV Infrastructure (Kenya)

Regulatory Initiatives for Enhanced Grid Flexibility: Setting Tariffs and Frameworks for Electricity Storage in Barbados

Strengthening Grenada's Resilience: Transitioning to Renewable Energy Amidst Climate Challenges (Grenada)

Enhancing Regulatory Capabilities: URE's Role and Challenges in Poland's Decarbonization Journey (Poland)

Planning requirements — Requiring utilities to model a decarbonized future (Michigan)

New Mexico 2

Example coming soon. (New Mexico)

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Similar Examples

Example coming soon. (Turks & Caicos)

Example coming soon. (Argentina)

Example coming soon (Azerbaijan)

Example coming soon (Bahamas)

Example coming soon. (Michigan)

Example coming soon. (Grenada)

Example coming soon. (Michigan)

Example coming soon. (British Columbia)

Example coming soon.

Example coming soon (Australia & Western Aus)

Example coming soon. (Italy)

Example coming soon. (New Mexico)

Example coming soon (United Kingdom)

Example coming soon. (British Columbia)

Example coming soon. (Michigan)

CNE's Adaptative Role in Decarbonization Efforts (Chile)

GNERC's Strategic Initiatives: Implementing a Sustainable Energy Landscape (Georgia)

Japan’s Launch of Long-Term Decarbonized Power Resource Auctions (Japan)

New Mexico’s Regulator Ensuring a Just Transition Through Energy Transition Bonds (New Mexico)

EgyptERA’s Strategic Initiatives Paving the Way for Renewable Energy and Efficiency

Responding to a broader regulatory mandate (United Kingdom)

Assessing ratepayer funding of a hybrid heating program (Canada, Québec)

CRE’s Role in Fostering Innovation within France's Energy Sector through Regulatory Sandboxes (France)

Enabling regulatory change through regulatory sandboxes (Italy)

Getting government support for electricity tariffs that promote electrification (Ontario)

Addressing carbon content in solar PV procurement (France)

Changes in transmission permitting — Becoming more deeply involved in transmission line siting (Germany)

Dealing with a loss of gas customers- Addressing implications of electrification: gas disconnection policy (Australia)

Efficiency Mandates and Externalities Internalization: Shaping Renewable Energy through Regulatory Insight, Policy, Legal and Regulatory Adaptation (Mexico)

Interpreting new requirements to consider decarbonization in regulatory decision making (Australia)

Balancing Growth and Grid Stability: Revising Solar PV Installation Limits and Pricing in Saint Lucia's Transition to Renewable Energy (Saint Lucia)

Progressive Hydrogen Initiatives and Regulatory Framework Development to Advance Decarbonization (France)

EPRA's Regulatory Innovations Fueling Renewable Adoption and EV Infrastructure (Kenya)

Regulatory Initiatives for Enhanced Grid Flexibility: Setting Tariffs and Frameworks for Electricity Storage in Barbados

Strengthening Grenada's Resilience: Transitioning to Renewable Energy Amidst Climate Challenges (Grenada)

Enhancing Regulatory Capabilities: URE's Role and Challenges in Poland's Decarbonization Journey (Poland)

Planning requirements — Requiring utilities to model a decarbonized future (Michigan)

United Kingdom 2

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GNERC's Strategic Initiatives: Implementing a Sustainable Energy Landscape (Georgia)

Japan’s Launch of Long-Term Decarbonized Power Resource Auctions (Japan)

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Changes in transmission permitting — Becoming more deeply involved in transmission line siting (Germany)

Dealing with a loss of gas customers- Addressing implications of electrification: gas disconnection policy (Australia)

Efficiency Mandates and Externalities Internalization: Shaping Renewable Energy through Regulatory Insight, Policy, Legal and Regulatory Adaptation (Mexico)

Interpreting new requirements to consider decarbonization in regulatory decision making (Australia)

Balancing Growth and Grid Stability: Revising Solar PV Installation Limits and Pricing in Saint Lucia's Transition to Renewable Energy (Saint Lucia)

Progressive Hydrogen Initiatives and Regulatory Framework Development to Advance Decarbonization (France)

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Regulatory Initiatives for Enhanced Grid Flexibility: Setting Tariffs and Frameworks for Electricity Storage in Barbados

Strengthening Grenada's Resilience: Transitioning to Renewable Energy Amidst Climate Challenges (Grenada)

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British Columbia 1

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GNERC's Strategic Initiatives: Implementing a Sustainable Energy Landscape (Georgia)

Japan’s Launch of Long-Term Decarbonized Power Resource Auctions (Japan)

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Assessing ratepayer funding of a hybrid heating program (Canada, Québec)

CRE’s Role in Fostering Innovation within France's Energy Sector through Regulatory Sandboxes (France)

Enabling regulatory change through regulatory sandboxes (Italy)

Getting government support for electricity tariffs that promote electrification (Ontario)

Addressing carbon content in solar PV procurement (France)

Changes in transmission permitting — Becoming more deeply involved in transmission line siting (Germany)

Dealing with a loss of gas customers- Addressing implications of electrification: gas disconnection policy (Australia)

Efficiency Mandates and Externalities Internalization: Shaping Renewable Energy through Regulatory Insight, Policy, Legal and Regulatory Adaptation (Mexico)

Interpreting new requirements to consider decarbonization in regulatory decision making (Australia)

Balancing Growth and Grid Stability: Revising Solar PV Installation Limits and Pricing in Saint Lucia's Transition to Renewable Energy (Saint Lucia)

Progressive Hydrogen Initiatives and Regulatory Framework Development to Advance Decarbonization (France)

EPRA's Regulatory Innovations Fueling Renewable Adoption and EV Infrastructure (Kenya)

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Planning requirements — Requiring utilities to model a decarbonized future (Michigan)

Michigan 2

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Similar Examples

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Example coming soon.

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Example coming soon. (British Columbia)

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CNE's Adaptative Role in Decarbonization Efforts (Chile)

GNERC's Strategic Initiatives: Implementing a Sustainable Energy Landscape (Georgia)

Japan’s Launch of Long-Term Decarbonized Power Resource Auctions (Japan)

New Mexico’s Regulator Ensuring a Just Transition Through Energy Transition Bonds (New Mexico)

EgyptERA’s Strategic Initiatives Paving the Way for Renewable Energy and Efficiency

Responding to a broader regulatory mandate (United Kingdom)

Assessing ratepayer funding of a hybrid heating program (Canada, Québec)

CRE’s Role in Fostering Innovation within France's Energy Sector through Regulatory Sandboxes (France)

Enabling regulatory change through regulatory sandboxes (Italy)

Getting government support for electricity tariffs that promote electrification (Ontario)

Addressing carbon content in solar PV procurement (France)

Changes in transmission permitting — Becoming more deeply involved in transmission line siting (Germany)

Dealing with a loss of gas customers- Addressing implications of electrification: gas disconnection policy (Australia)

Efficiency Mandates and Externalities Internalization: Shaping Renewable Energy through Regulatory Insight, Policy, Legal and Regulatory Adaptation (Mexico)

Interpreting new requirements to consider decarbonization in regulatory decision making (Australia)

Balancing Growth and Grid Stability: Revising Solar PV Installation Limits and Pricing in Saint Lucia's Transition to Renewable Energy (Saint Lucia)

Progressive Hydrogen Initiatives and Regulatory Framework Development to Advance Decarbonization (France)

EPRA's Regulatory Innovations Fueling Renewable Adoption and EV Infrastructure (Kenya)

Regulatory Initiatives for Enhanced Grid Flexibility: Setting Tariffs and Frameworks for Electricity Storage in Barbados

Strengthening Grenada's Resilience: Transitioning to Renewable Energy Amidst Climate Challenges (Grenada)

Enhancing Regulatory Capabilities: URE's Role and Challenges in Poland's Decarbonization Journey (Poland)

Planning requirements — Requiring utilities to model a decarbonized future (Michigan)

Chile

CNE's Adaptative Role in Decarbonization Efforts (Chile)

Chile’s National Energy Commission (CNE) has shown an adaptive approach to facilitating Chile’s decarbonization while balancing economic and community impacts. CNE’s mandate includes setting tariffs, ensuring market transparency and overseeing the decommissioning of coal plants. The CNE faced a unique challenge in May 2022 when it had to delay the closure of a coal plant due to potential electricity shortages, highlighting the complexities of integrating renewable energies into Chile’s distinct electricity grid. To mitigate the impacts of coal plant phaseouts and support communities dependent on coal, the CNE introduced a “strategic reserve” mechanism, offering compensation to keep coal plants as backup and ensuring security of supply. Moreover, in April 2023, the CNE revised the compensation mechanism for utilities, so that coal generators could no longer pass through the costs of an emissions tax, thereby improving the competitive position of renewables.

Themes

Acceleration of regulatory processes to advance decarbonization
Changes to the legal framework
How regulators are creatively addressing decarbonization
Importance of government-regulator relationships

Main Findings

An effective government-regulator relationship is vital
Regulators are creatively addressing decarbonization
The regulatory handbrake on investment must be released

Recommendations

For Government: A carbon price
For Government: Gather regulators’ inputs
For Regulators: Advise governments on practical implications
For Regulators: Anticipate the low-carbon future in their decisions
For Regulators: Reform regulatory processes

Key Insights

Government-regulator relationship
Application of decarbonization criteria in recent decisions
Potential Enhancements to the legal/regulatory framework

Where Chile
Who Chile’s National Energy Commission (Comisión Nacional de Energia) (CNE)
Link Organization https://www.cne.cl
Legal System Civil Law
Type of Solution Policy Development and Implementation
Technology Adoption and Integration
Economic and Financial Mechanisms
Public and Stakeholder Engagement

Context — Problem/Issue

Historically dependent on imported fossil fuels and coal plants for electricity generation, Chile has made a decisive pivot, aiming to gradually phaseout/reconvert all coal-fired power plants by 2040 and significantly reduce its carbon footprint. Chile has set the goal to reach 80% of renewable generation by 2030 (which reached 60% in 2022, mainly hydro and solar) and aims to become carbon neutral by 2050. These goals are supported by different policies, like the 2015 National Energy Policy (updated in 2022) and the 2030 Decarbonization Plan, along with various legal and regulatory frameworks promoting clean energy investments, electric mobility, energy efficiency programs and the exploration of emerging technologies like green hydrogen. Chile’s energy transition is underpinned by both public and private sector initiatives, with the government facilitating this shift through incentives, regulatory reforms and international cooperation on climate and energy projects. The country’s emphasis on renewable energy, combined with a robust regulatory framework and clear long-term goals, has positioned Chile as a leader in Latin America’s energy transition.

Chile’s National Energy Commission (CNE) plays a crucial role in directing and executing Chile’s energy policies, with key responsibilities that include developing regulatory frameworks to encourage a competitive and efficient market with a focus on renewable energy and reliability; setting tariffs; overseeing the market to ensure transparency, fairness and consumer protection; advising the Government on all matters related to the improvement of the energy sector; issuing and overseeing tenders in the energy sector, including generation, capacity, transmission and distribution; developing transmission plans; and a specific mandate to approve the decommissioning of coal plants. Nonetheless, due to stability and security concerns, in May 2022, as an isolated case, the CNE had to postpone the closure of a coal plant that had previously been approved, on account of projected electricity shortages and further risks in the system.

Ensuring the integration of variable renewable energies poses challenges given the unique linear and isolated nature of Chile’s electricity grid and the relatively young age of many of its coal-fired power plants (64% being less than 10 years old); the system demands more reliability, flexibility and storage. Additionally, the economic reliance of communities on coal-fired plants and coal mining presents a critical issue in the absence of economic alternatives. Fostering community backing for a “just transition” and exploring technical-economic alternatives for repurposing the infrastructure of retired coal plants are essential. To reduce the negative impacts of an abrupt coal phaseout and reach stakeholder consent to motivate early decommissioning, a “strategic reserve” mechanism was implemented by the CNE (Decree 42/2020) (and updated in November 2023), through a coordinated effort with the government. The mechanism allows a 60% compensation for capacity for coal plants to be ready for dispatch, as a backup, if needed, despite not injecting power to the grid, based on the principle of security of supply.

Another example of CNE’s role in decarbonization is the modification of the compensation mechanism that requires utilities to compensate relatively high-cost generators in the power system, since the carbon tax is not factored into the marginal spot price of electricity during periods when a fossil fuel-based generator sets the price. The scheme required all utilities to cover the cost difference when a power plant’s operational costs, inclusive of the carbon tax, equal or surpass the market’s marginal spot price. This shifted the financial burden of the carbon tax from the polluting power plants to the utility companies purchasing electricity, thereby distorting market incentives since plants with higher emissions were not held financially accountable for their carbon tax, weakening the intended encouragement for cleaner energy investment. This meant that high emitting generation could pass through the costs of the emissions tax (stated in Art. 8, Law No. 20.780) and therefore undermined the purpose of the tax which was to make low emitting generation more competitive. This provision was modified in April 2023 so that emissions taxes would be better allocated to coal and other fossil fuel generators that were previously benefiting from this compensation mechanism.

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GNERC's Strategic Initiatives: Implementing a Sustainable Energy Landscape (Georgia)

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Efficiency Mandates and Externalities Internalization: Shaping Renewable Energy through Regulatory Insight, Policy, Legal and Regulatory Adaptation (Mexico)

Interpreting new requirements to consider decarbonization in regulatory decision making (Australia)

Balancing Growth and Grid Stability: Revising Solar PV Installation Limits and Pricing in Saint Lucia's Transition to Renewable Energy (Saint Lucia)

Progressive Hydrogen Initiatives and Regulatory Framework Development to Advance Decarbonization (France)

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Planning requirements — Requiring utilities to model a decarbonized future (Michigan)

Georgia

GNERC's Strategic Initiatives: Implementing a Sustainable Energy Landscape (Georgia)

The Georgian National Energy and Water Supply Regulatory Commission (GNERC) is steering the sector toward alignment with European Union directives, emphasizing green energy, net metering and energy efficiency within its strategic goals. Since implementing net metering in 2016, GNERC has successfully integrated over 1000 micro power plants into the grid, enhancing renewable energy use and promoting energy independence among consumers. Significant reforms, such as the 2021 Rules for Electricity Distribution Network, have standardized connection requirements and facilitated the integration of electric vehicle charging stations, among other updates aimed at modernizing the sector. In 2022, GNERC established guidelines for connecting small power plants to the distribution network, supporting decentralized renewable energy production. The commission’s establishment of the Energy Training Center in 2022 further underscores its commitment to education and awareness in the energy sector. Additionally, GNERC’s recent Memorandum of Understanding with the Azerbaijan Energy Regulatory Agency in February 2024 highlights its dedication to regional cooperation and the sharing of best practices in energy regulation.

Themes

Acceleration of regulatory processes to advance decarbonization
Changes to the legal framework
How regulators are creatively addressing decarbonization
Importance of government-regulator relationships

Main Findings

An effective government-regulator relationship is vital
Regulators are creatively addressing decarbonization
Regulators can help each other
Regulators need a decarbonization mandate
The regulatory handbrake on investment must be released

Recommendations

For Government: A decarbonization objective in legislation
For Government: Gather regulators’ inputs
For Government: More resources
For Regulators: Advise governments on practical implications
For Regulators: Anticipate the low-carbon future in their decisions
For Regulators: Reform regulatory processes

Key Insights

Government-regulator relationship
Application of decarbonization criteria in recent decisions
Potential Enhancements to the legal/regulatory framework

Where Georgia
Who Georgian National Energy and Water Supply Regulatory Commission (GNERC)
Link Organization https://gnerc.org/en/home
Legal System Civil Law
Type of Solution Policy Development and Implementation
Technology Adoption and Integration
Economic and Financial Mechanisms
Public and Stakeholder Engagement

Context — Problem/Issue

Georgia’s energy sector heavily relies on natural gas and oil imports; domestic energy production comes mostly from hydropower that supplies about 80% of electricity and bioenergy. Georgia has been exploring and investing in other renewable energy sources, such as wind and solar, albeit to a lesser extent. The country has recently updated its greenhouse gas emissions reduction target from 35% to 47% by 2030 (relative to 1990 levels) and seeks to attain climate neutrality by 2050 via a swift and comprehensive technological transformation. Georgia’s strategic location between Europe and Asia positions it as a potential energy corridor, facilitating energy transit from the Caspian region to European markets. The country’s energy policy has increasingly focused on enhancing energy security, diversifying energy supply and integrating with European energy markets, following its intentions to join the European Union (candidate status was granted in December 2023). This includes efforts to connect with the European Network of Transmission System Operators for Electricity (ENTSO-E) and to liberalize its electricity market in line with EU practices.

The Georgian National Energy and Water Supply Regulatory Commission (GNERC) was established to ensure fair market competition, protect consumer rights and foster efficient utility services; it is responsible for setting tariffs, issuing licenses, monitoring utility service quality and promoting the development of energy markets. GNERC has been working on adapting Georgia’s regulatory framework to align with European Union energy directives. GNERC’s strategic goals include the promotion of green energy generation and net metering, as well as promoting energy efficiency. Its mandate is included within the framework of the Law of Georgia on Promotion of Production and Use of Energy from Renewable Sources and the Law on Energy and Water Supply. While GNERC maintains independence in areas such as transmission rules and tariff setting, it collaborates with the government on national energy policy, reviewed by the regulator before final approval.

GNERC implemented net metering in 2016, to incentivize individuals to produce their own electricity and sell any surplus back to the distribution network for a fee, aiming to promote renewable energy use and allow consumers or consumer groups to generate power through solar, wind or water sources (including wastewater), with a cap on micro power plant capacity at 500 kW. By January 2024, this system had successfully integrated over 1000 micro power plants into the grid, with an installed capacity of around 64 MW. GNERC is still drawing insights from other countries to improve net metering regulation.

In June 2021, GNERC issued the Rules for Electricity Distribution Network (Resolution 19) that implemented several changes in the electricity sector. Key updates include the standardization of connection requirements, specifying that the minimum connection capacity for each consumer must be at least 10 kW (applicable to residential, industrial, multi-apartment buildings and other units); deadlines for electricity consumption metering and reading; a raised cap on the total permissible installed capacity of micro-generation power plants; and specified conditions for installing smart meters in divided units.

The new Rules also introduced preferential connection terms for electric vehicles’ public charger stations to the distribution network, ensuring these facilities are accessible beyond personal use. The capacity of these charging stations is excluded from the overall capacity calculation of the facility or area where they are located, and their use is strictly for charging purposes only. The connection fee for these stations is set at 50% of the standard fee for new customers in the distribution network and the system operator has the right to terminate the connection if a charging station remains unconnected for a year after connection works are completed or is not used for ten years.

In 2022, GNERC approved a new rule for connection to the electricity distribution network for small power plants up to 15 MW. The rule established transparent and fair guidelines for connecting small capacity power plants to the distribution network, facilitating the growth of decentralized renewable energy production. It included provisions for the readiness of the electricity distribution network and the ability to connect for a reasonable fee, ensuring a non-discriminatory approach toward investors and allowing them to pre-determine the costs and conditions for network connection. In 2023, GNERC adopted the electricity market rules as well as dispute resolution rules. Day ahead, balancing and ancillary services markets are expected to start operations by mid 2024.

GNERC has also implemented an Energy Training Center in 2022, aiming to enhance education and raise awareness in the electricity, natural gas and water supply sectors. The center’s objectives include promoting critical issues, identifying priority areas for action in response to current challenges, facilitating the exchange of experience and knowledge, developing scientific and educational projects, establishing an electronic library, and organizing thematic conferences and scientific forums.

Furthermore, in order to enhance cooperation through the exchange of information on energy regulation, the GNERC signed in February 2024 a Memorandum of Understanding with the Azerbaijan Energy Regulatory Agency (AERA), aimed at fostering the development of energy sector regulation and to facilitate joint training programs, study visits and expert training sessions specifically targeting renewable energy and energy efficiency regulation.

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Changes in transmission permitting — Becoming more deeply involved in transmission line siting (Germany)

Dealing with a loss of gas customers- Addressing implications of electrification: gas disconnection policy (Australia)

Efficiency Mandates and Externalities Internalization: Shaping Renewable Energy through Regulatory Insight, Policy, Legal and Regulatory Adaptation (Mexico)

Interpreting new requirements to consider decarbonization in regulatory decision making (Australia)

Balancing Growth and Grid Stability: Revising Solar PV Installation Limits and Pricing in Saint Lucia's Transition to Renewable Energy (Saint Lucia)

Progressive Hydrogen Initiatives and Regulatory Framework Development to Advance Decarbonization (France)

EPRA's Regulatory Innovations Fueling Renewable Adoption and EV Infrastructure (Kenya)

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Strengthening Grenada's Resilience: Transitioning to Renewable Energy Amidst Climate Challenges (Grenada)

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Planning requirements — Requiring utilities to model a decarbonized future (Michigan)

Japan

Japan’s Launch of Long-Term Decarbonized Power Resource Auctions (Japan)

Japan’s energy sector is undergoing transformative changes and reforms, influenced by its scarce natural resources, heavy dependency on energy imports, and a significant shift from nuclear to fossil fuels following the 2011 Fukushima disaster, affecting both energy security and emissions. The government’s ambitious goals to cut greenhouse gas emissions by 46% from 2013 levels by 2030 and achieve carbon neutrality by 2050 have led to the full liberalization of the electricity and gas markets to foster competition and innovation, a process monitored by the Electricity and Gas Market Surveillance Commission (EGC). To spur investment in clean energy, Japan initiated the first Long-Term Decarbonized Power Resource Auctions (LTDA) by the end of FY 2023. LTDA encourage new projects in renewable energy and modernization of existing power plants, and offer stable, long-term income to successful bidders. The EGC is responsible for defining allowable costs in bid prices according to established regulations and for overseeing the monitoring of bid prices and revenues earned by successful bidders.

Themes

Acceleration of regulatory processes to advance decarbonization
Changes to the legal framework
How regulators are creatively addressing decarbonization

Main Findings

An effective government-regulator relationship is vital
Regulators need a decarbonization mandate
The regulatory handbrake on investment must be released

Recommendations

For Government: A carbon price
For Government: Gather regulators’ inputs
For Regulators: Advise governments on practical implications
For Regulators: Anticipate the low-carbon future in their decisions

Key Insights

Government-regulator relationship
Application of decarbonization criteria in recent decisions

Where Japan
Who Electricity and Gas Market Surveillance Commission (EGC, METI)
Link Organization https://www.emsc.meti.go.jp/english/
Legal System Civil Law
Type of Solution Policy Development and Implementation
Technology Adoption and Integration
Economic and Financial Mechanisms
Public and Stakeholder Engagement

Context — Problem/Issue

The energy sector in Japan is characterized by its unique challenges and strategic responses, shaped by the country’s limited natural resources and high dependency on energy imports. The government has set ambitious targets to reduce greenhouse gas emissions by 46% by 2030 from 2013 levels, aiming to become carbon neutral by 2050. The Japanese government has undertaken various policy measures and regulatory reforms to support its energy transition and decarbonization goals. The government has introduced incentives and subsidies to support renewable energy deployment and energy conservation measures, and as well as financial mechanisms, including the introduction of carbon pricing in 2023. Carbon credits started to be traded in the Tokyo Stock Exchange by the end of 2023.

The Electricity and Gas Market Surveillance Commission (EGC) of Japan was launched in 2015 to strengthen the monitoring function of the energy markets after their liberalization (in 2016 for electricity and 2017 for natural gas). Its functions include the evaluation of tariffs and the development of new rule recommendations to the government to foster competition. Additionally, it has the authority to issue non-binding advisories to utilities.

The EGC plays an important role in the energy transition through its involvement in the  Long-Term Decarbonized Power Resource Auctions (LTDA), a new initiative that is managed by the Organization for Cross-regional Coordination of Transmission Operators (OCCTO), and aims to promote investment in creating, replacing and upgrading decarbonized power projects, with fixed costs recoverable over a 20 year period and specifically excluding projects already supported by existing capacity markets or FIT/FIP schemes (in accordance with the guidelines issued in July 2023 by the Agency for Natural Resources and Energy). The first auction, which opened in January 2024, targets a total of 4GW for decarbonized resources, 1GW for thermal plant renovations, and 1GW for battery storage and pumped hydro projects, with varying minimum bid volumes based on the project type. The EGC identifies permissible costs for inclusion in bid prices, ensuring these costs adhere to established rules; once the bidding period ends, it is in charge of monitoring the bid price and the revenues obtained by awarded bidders, ensuring that their annual reporting of additional market revenues is both accurate and fair.

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Japan’s Launch of Long-Term Decarbonized Power Resource Auctions (Japan)

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Efficiency Mandates and Externalities Internalization: Shaping Renewable Energy through Regulatory Insight, Policy, Legal and Regulatory Adaptation (Mexico)

Interpreting new requirements to consider decarbonization in regulatory decision making (Australia)

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Progressive Hydrogen Initiatives and Regulatory Framework Development to Advance Decarbonization (France)

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Strengthening Grenada's Resilience: Transitioning to Renewable Energy Amidst Climate Challenges (Grenada)

Enhancing Regulatory Capabilities: URE's Role and Challenges in Poland's Decarbonization Journey (Poland)

Planning requirements — Requiring utilities to model a decarbonized future (Michigan)

New Mexico 1

New Mexico’s Regulator Ensuring a Just Transition Through Energy Transition Bonds (New Mexico)

The New Mexico Public Regulation Commission (NMPRC) plays a crucial role in overseeing the State’s energy transition, ensuring utilities adhere to state objectives while maintaining reliable services. The Energy Transition Act of 2019 introduces relevant mandates to the NMPRC and financial mechanisms to support communities affected by coal plant closures, with specific funds aimed at aiding displaced workers and facilitating economic development in impacted areas. Despite facing opposition and challenges, including debates over financial burdens and ratepayer impacts, the NMPRC’s regulatory oversight continues to shape New Mexico’s path towards a sustainable and decarbonized future.

Themes

Acceleration of regulatory processes to advance decarbonization
Changes to the legal framework
How regulators are creatively addressing decarbonization
Importance of government-regulator relationships

Main Findings

An effective government-regulator relationship is vital
Regulators are creatively addressing decarbonization
Regulators need a decarbonization mandate
The regulatory handbrake on investment must be released

Recommendations

For Government: A decarbonization objective in legislation
For Government: Gather regulators’ inputs
For Government: More resources
For Regulators: Advise governments on practical implications
For Regulators: Reform regulatory processes

Key Insights

Potential Enhancements to the legal/regulatory framework

Where United States, New Mexico
Who New Mexico Public Regulation Commission (NMPRC)
Link Organization https://www.prc.nm.gov/
Legal System Common law
Type of Solution Policy Development and Implementation
Technology Adoption and Integration
Economic and Financial Mechanisms
Public and Stakeholder Engagement

Context — Problem/Issue

New Mexico is a leading oil and gas producer in the U.S. and has historically relied on fossil fuels as economic drivers, which has brought environmental and sustainability challenges. Coal has historically been the primary source of electricity generation in New Mexico. Its contribution to the state’s energy mix, however, has been declining since 2004, driven by stricter air quality regulations, the lower costs of natural gas, and California’s 2014 decision to cease purchasing coal-generated electricity from neighboring states. These factors have led to the closure or conversion of coal-fired power plants to alternative fuel sources as part of broader efforts to reduce greenhouse gas emissions and increase the use of renewable energy. The state has set ambitious renewable energy targets, aiming to double the state’s renewable energy use by 2025, achieve 50% renewable energy by 2030, and 100% carbon-free electricity by 2045 for investor-owned utilities and by 2050 for cooperatives, as outlined in the Energy Transition Act of 2019. Currently, renewable energy has emerged as the predominant source of electricity in New Mexico (mainly wind, that in 2022 surpassed, for the first time, coal power generation).

The New Mexico Public Regulation Commission (NMPRC) oversees the utility sector, ensuring reliable service and guiding the energy transition in line with state objectives. It has several tools regarding decarbonization within its mandate. The NMPRC holds a critical role in ensuring a fair transition as mandated by legislation, which requires phasing out coal in favor of renewable energy sources. The Energy Transition Act provides the NMPRC with guidelines for transitioning from retiring coal plants toward future energy solutions.

To support this transition, the Act establishes three specific funds designed to assist communities impacted by the shutdown of coal facilities, allowing utilities to issue “energy transition bonds” covering costs associated with coal plant closures. This includes up to $30 million for coal mine reclamation and up to $40 million to assist displaced workers and communities through the Energy Transition Indian Affairs Fund, the Economic Development Assistance Fund, and the Displaced Worker Assistance Fund​​. The NMPRC is responsible for authorizing the bonds and overseeing the proper allocation of these utility funds into the designated support funds.

Nonetheless, these provisions have faced opposition, including the financial burden placed on ratepayers of the Public Service Company of New Mexico (PNM), the state’s largest electricity provider, rather than its shareholders. Further controversies have emerged regarding PNM customers still paying the same rates for non-operating facilities and despite the NMPRC’s approval of rate reduction; or about the NMPRC’s denial to issue bonds to recoup the costs of a coal plant abandonment. NMPRC’s decisions have been upheld by the Supreme court.

By July 2023, state agencies in New Mexico were actively working to distribute funds from the Energy Transition Act. Despite a delay in funds reaching communities and workers, caused by the time taken to refinance past investments through low-interest bonds, efforts are underway to allocate $5.9 million for community projects and support for displaced workers. The Indian Affairs Department has already earmarked its $1.8 million for agricultural projects, while the Department of Workforce Solutions has begun distributing $20,000 direct payments to displaced workers, many of whom have expressed interest in training for new careers.

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Egypt

EgyptERA’s Strategic Initiatives Paving the Way for Renewable Energy and Efficiency

In response to Egypt’s strategic pivot toward renewable energy and improved energy efficiency, EgyptERA, the nation’s energy regulator, has taken assertive actions to facilitate this transition. These include enacting exemptions from integration fees for smaller solar photovoltaic projects participating in net metering and self-consumption initiatives, establishing the country’s inaugural framework for electric vehicle (EV) charging infrastructure, and devising an energy efficiency plan aimed at distribution companies. These measures underscore EgyptERA’s commitment to fostering a sustainable energy landscape, promoting the use of renewable resources, and supporting the nation’s ambitious energy goals.

Themes

How regulators are creatively addressing decarbonization
Importance of government-regulator relationships

Main Findings

An effective government-regulator relationship is vital
Regulators are creatively addressing decarbonization

Recommendations

For Government: A decarbonization objective in legislation
For Government: Gather regulators’ inputs
For Government: More resources
For Regulators: Advise governments on practical implications
For Regulators: Anticipate the low-carbon future in their decisions

Key Insights

Application of decarbonization criteria in recent decisions

Where Egypt
Who Electric Utility and Consumer Protection Regulatory Agency (EgyptERA)
Link Organization http://egyptera.org/en/
Legal System Civil Law
Type of Solution Policy Development and Implementation
Technology Adoption and Integration
Economic and Financial Mechanisms

Context — Problem/Issue

Despite possessing substantial oil and gas resources along with significant renewable energy potential, Egypt has encountered critical energy challenges in recent years. These challenges include power shortages triggered by escalating energy demand due to the nation’s swiftly growing population and expanding economy. Such conditions not only pose challenges in guaranteeing a reliable supply of energy but also open up opportunities for development within the energy sector. To tackle this, the country’s electricity sector is undergoing a profound transformation aimed at diversifying its energy sources by increasing renewable energy contributions and improving energy efficiency. The government’s reforms are focused on liberalizing the energy market to foster competition, reduce state control and promote sustainable and efficient energy use.

The Electric Utility and Consumer Protection Regulatory Agency (EgyptERA) is in charge of the regulation, supervision and development of the electricity sector, and it has a specific mandate toward energy efficiency. Electricity Law No. 87 of 2015 and its regulations set the legal foundation for the restructuring of Egypt’s electricity market toward liberalization and competitiveness. The regulator also has a responsibility to facilitate the development of renewable energy, which the government targets to increase to 42% of its electricity mix by 2035 and has issued several directives. Circular No 2/2020 (amended by Circular No 6/2022)  established Egypt’s net-metering scheme for renewable energy sources, introducing several new regulations to streamline the process and promoting the development of solar energy. These amendments include specific requirements for the location and capacity of generation facilities, limitations on the total and individual project capacities, and the necessity of additional studies for medium-voltage network interconnections. An annual settlement of net-metering charges, based on the latest purchase price/tariff, is required, and an integration fee has been introduced to cover the costs of balancing renewable electricity on the grid. Projects up to 10 MW and all self-consumption projects, however, are exempt from this fee. Circular No 5/2022 was the inaugural regulation for electric vehicle (EV) charging infrastructure in Egypt, facilitating the setup of EV charging stations across the nation. Circular No 2/2023 paved the way for the private sector to procure renewable energy directly from the New and Renewable Energy Authority (NREA), enabling three private telecom companies to shift their energy consumption entirely to renewable sources within NREA’s generation capacity. Circular No 3/2023 detailed the framework for solar photovoltaic (PV) self-consumption in Egypt, applicable to both grid-connected and off-grid projects exceeding 500 kW, intended solely for the project owner’s use and not for sale. The regulator extended the exemption of the merger fee to 10MW capacity PV plants under Net Metering (on-grid) projects. This showcases how EgyptERA, to foster investments (mainly in solar PV), offered innovative renewable energy schemes: net metering and self-consumption with fees exemptions for installations under 10 MW, leveraging the benefits of net metering and self-consumption regulations to encourage more renewable initiatives.

EgyptERA also developed policies to support the solid energy efficiency framework, based on the Egypt Strategic Vision 2030, the National Energy Efficiency Action Plan (NEEAP) for 2018/2021, and the Electricity Law No. 87 of 2015. Although national targets are in place to minimize both technical and commercial losses within the network, the regulator has established an energy efficiency distribution plan for distribution companies that shall cover, among other aspects, the enhancement of efficiency of electricity consumption, encourage the use of renewable energy, and educate consumers on the efficient use of electricity.

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United Kingdom 1

Responding to a broader regulatory mandate (United Kingdom)

The Energy Act 2023 in the United Kingdom marks a significant step forward in supporting the clean energy transition, positioning Ofgem, the energy regulator, as a pivotal figure in the government’s net zero mandate. This comprehensive legislation introduces major changes enhancing Ofgem’s influence in the transition. Firstly, it mandates Ofgem to consider net zero goals in regulatory decisions, requiring documentation of how decisions align with the 2050 net zero emissions goal and five-year carbon budgets. Secondly, it establishes Ofgem’s regulatory authority over heat networks, aiming to expand their heat supply contribution from 2% to 18% by 2050, by addressing pricing, reliability and service quality. Thirdly, it assigns Ofgem as the economic regulator for CO2 transport and storage networks, crucial for the development of Carbon Capture, Usage and Storage (CCUS) technologies, by overseeing licensing and revenue models to encourage investment. Lastly, it shifts the responsibility of energy market rules oversight from industry to Ofgem, tasking it with setting strategic directions and consolidating energy codes. Furthermore, Ofgem had a proactive involvement in government consultations on heat networks and energy code reform, even before the legislation, that showcases its active role in energy transition.

Themes

Changes to the legal framework
How regulators are creatively addressing decarbonization
Importance of government-regulator relationships

Main Findings

An effective government-regulator relationship is vital
Regulators are creatively addressing decarbonization
Regulators need a decarbonization mandate
The regulatory handbrake on investment must be released

Recommendations

For Government: A decarbonization objective in legislation
For Government: Gather regulators’ inputs
For Government: More resources
For Regulators: Advise governments on practical implications
For Regulators: Anticipate the low-carbon future in their

Key Insights

Government-regulator relationship
Application of decarbonization criteria in recent decisions
Appropriateness of existing legal/regulatory framework in addressing decarbonization
Potential Enhancements to the legal/regulatory framework

Where United Kingdom
Who Office of Gas and Electricity Markets (Ofgem)
Link Organization https://www.ofgem.gov.uk/
Legal System Common Law
Type of Solution Policy Development and Implementation
Technology Adoption and Integration
Public and Stakeholder Engagement

Context — Problem/Issue

One of the issues that regulators raised in the interviews is the extent to which they might be expected by government to take on more responsibility to assist the clean energy transition. The United Kingdom has just passed the Energy Act 2023 which is a broad piece of legislation to support the clean energy transition. The energy regulator for the UK (Ofgem) emerges as a linchpin in support of the government’s net zero mandate. There are four major changes in the legislation that directly affect Ofgem’s ability to influence the clean energy transition:

  1. Mandate to consider net zero in regulatory decision making. The legislation adds a specific duty to assist the government’s achievement of both the 2050 net zero emissions goal (which itself is enshrined in legislation) and the five-year carbon budgets, which restrict the total carbon dioxide emissions over a five-year period (currently 2023-27 inclusive). Ofgem will be required to apply this new duty in its decision making and to document how it has done so.
  2. Development of a regulatory framework for heat networks. The government had identified heat networks (both district heating networks, which might supply multiple buildings, and communal networks, which would supply multiple residences in a single building) as an important provider of heat in a decarbonized energy system. Heat networks currently supply 2% of heat in the UK and government policy is for this to increase to 18% by 2050. The government sees the regulator as the key player to spur growth and investment in heat networks so that they become more common. With the legislation just passed, Ofgem will have authority to regulate the 14,000 existing heat networks. Ofgem will now have the ability to address disproportionate prices, and establish reliability and quality of service standards.
  3. Development of a regulatory framework for CO2 transport and storage networks. The government also identified Carbon Capture, Usage and Storage (CCUS) as an essential element of a Net Zero energy system. The Energy Act 2023 gives Ofgem legal powers as the economic regulator for CO2 transport and storage networks and makes the transport and storage of CO2 a licensable activity. The regulatory regime will set the allowed revenue that a licensee will recover from use of system charges paid by users of the network. The allowed revenue will enable licensees to earn a regulated return on their investment while allowing the economic and efficient development of the network.
  4. Greater oversight over energy market rules. The legislation additionally shifts responsibility for energy codes — which cover the wholesale and retail market rules for the gas and electricity markets, as well as connections —from an industry responsibility to one that is overseen by Ofgem. Ofgem will set the strategic direction for energy codes, including expectations of changes in codes that will need to be delivered by code managers (licensed by Ofgem) for each year. Ofgem has identified consolidation to reduce the number of different codes (currently 11) as an early priority.

Ofgem has already been active in anticipation of the new responsibilities, two of which (heat networks and energy code reform) were set out by the government well in advance of the legislation. For heat networks, Ofgem has been active in government consultations on the topic, as well participating in a joint consultation with the government on consumer protection issues with respect to heat networks. On energy code oversight, Ofgem is currently working with the government on the regulations that will need to be passed to establish Ofgem’s oversight of the codes.

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Québec

Assessing ratepayer funding of a hybrid heating program (Canada, Québec)

In the context of regulatory decisions for major decarbonization initiatives, decarbonization often interacts with other criteria, leading to compromises rather than ideal solutions focused solely on carbon reduction. An example of this is the approval of a hybrid heating/electrification program in Québec. Here, the electricity and gas distributors proposed a program encouraging gas heating customers to switch to electric heating with natural gas backup. The Régie de l’énergie du Québec approved this hybrid approach over a complete transition to electric heating, considering the higher costs an all-electric system would impose on the power system and other consumers not participating in the program.

Themes

How regulators are creatively addressing decarbonization

Main Findings

Regulators are creatively addressing decarbonization

Recommendations

For Government: A carbon price
For Government: A decarbonization objective in legislation
For Regulators: Anticipate the low-carbon future in their decisions
For Regulators: Reform regulatory processes

Key Insights

Application of decarbonization criteria in recent decisions
Potential Enhancements to the legal/regulatory framework

Where Canada, Québec
Who Régie de l’énergie du Québec
Link Organization https://www.regie-energie.qc.ca/fr
Legal System Civil Law
Type of Solution Technology Adoption and Integration
Economic and Financial Mechanisms
Public and Stakeholder Engagement

Context — Problem/Issue

One of the great challenges in decarbonizing energy systems will be the decarbonization of building heating. Heating demand is highly seasonal, and fuels (mostly natural gas where available, but also fuel oil) are drawn on most heavily on the coldest days and in many jurisdictions remain the lowest cost options for heating. Electrification of heating through heat pumps offers a very good solution in many situations, with their high efficiency, and they have been successfully deployed even in relatively cold climates, such as in Scandinavia. Regulators will be faced with the increasingly challenging task of encouraging this electrification of heating both as it affects the electricity system and the natural gas system. In jurisdictions where gas heating currently predominates, the switch to electric heating will affect both natural gas and electricity systems, the former from the loss of revenues and the latter from increase in costs, particularly to meet higher winter peak demands for electricity.

In the Canadian province of Québec, the government has announced targets to reduce greenhouse gas emissions by 37.5% by 2030 (compared to 1990 levels) and in particular to reduce building heating emissions by 50% by 2030. Decarbonization of building heating is particularly challenging in Québec because of the very cold winters. Temperatures can fall to levels at which even “cold climate” heat pumps will struggle to supply sufficient heat, necessitating either electrical resistance or some fuel-based heating as a backup supply. Furthermore, as the annual system demand already peaks in winter, more electric heat will drive an increase in the peak load and therefore system costs. In its Plan for a Green Economy 2030, the government noted that it had asked Hydro Québec, the government-owned supplier responsible for nearly all electricity supply in Québec, which it obtains from renewable (mainly hydroelectric) sources, and Énergir, the largest natural gas distributor, to team up to achieve “a partial conversion from natural gas to electricity [as] part of a balanced approach, based on optimum complementarity between the electricity and gas networks, in order to maximize economic benefits and minimize costs for customers.”

In response, the two companies reached an agreement to offer a building heating electrification program known as the Dual Energy Offer. The Dual Energy Offer is aimed at natural gas heating residential customers and involves installing a heat pump to supply heat with the existing gas furnace or boiler. Customers would rely on the heat pump to supply their heating needs on all but the coldest days when heating would be supplied by natural gas. Customers with the dual energy offer would also have access to an existing special electricity rate, the DT rate, which charges more than four times the standard rate for electricity on colder days, to encourage the customer to switch to natural gas during those periods, but 28% cheaper than the standard rate at other times. In addition, residential customers would be encouraged to switch their water heaters to electricity, regardless of the temperature. A later phase of the program will be aimed at commercial and institutional customers.

The Dual Energy Offer will lead to increases in costs for Hydro Québec (as it must procure additional generation, transmission and distribution) and for Énergir, because of a significant loss of revenue from its customers. To encourage Énergir to proceed with the offer, Hydro Québec agreed to make a financial contribution to Énergir each year depending on the amounts of natural gas displaced by the program. The purpose of the hearing was for Hydro Québec to get approval to recover from its electricity customers the amounts paid to Énergir.

In their proposal, the proponents stated two principal alternatives — an all-electrification scenario (TAE) and the dual energy scenario (bienergie). The dual energy proposal had significantly lower financial impacts, particularly for Hydro Québec, while achieving about two thirds of the emissions savings compared to the all-electrification scenario. As pointed out by some intervenors in their submissions, however, the dual energy proposal would prolong dependence on continued use of fossil fuels for space heating for these customers.

The decision from the Régie de l’énergie du Québec was in favour of the financial contribution from Hydro-Québec to Énergir. The main reasons given in the decision were that the dual energy alternative had much lower impacts on electricity and gas ratepayers than an all-electrification scenario, while still obtaining about two thirds of the emissions savings of the all-electrification scenario. It was estimated that the cumulative additional greenhouse gas emissions savings to 2030 of the all-electrification scenario would amount to just over one million tonnes, but the cumulative impact on Hydro Québec’s revenues would amount to over $1.68 billion (CAD), owing mainly to the need to increase generation and network capacity. In response to the concern raised about the continued reliance on fossil fuels, the regulator noted that the government had stated that they saw the complementarity of the natural gas and electric systems as a vector to achieving their 2030 decarbonization goals.

Upon appeal by some intervenors, however, this decision was overturned by a different panel of the regulator, stating the current law did not allow Hydro Québec to recover these costs from customers. Hydro Québec has indicated it will proceed with the program and pay the compensation to Énergir, but is challenging the regulator’s decision in the courts.

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France 3

CRE’s Role in Fostering Innovation within France's Energy Sector through Regulatory Sandboxes (France)

France’s Energy-Climate Law of November 8, 2019, introduced a regulatory sandbox mechanism, empowering the French energy regulatory commission, Commission de Régulation de l’Énergie (CRE), to facilitate the energy transition and foster innovation. By granting temporary exemptions for the use of networks and facilities, the CRE enables the experimental deployment of innovative technologies and services aimed at advancing smart energy systems and infrastructure. CRE ensures that these innovations do not compromise the safety, reliability or efficiency of the national energy system, while also working to identify and remove regulatory barriers, assess projects for scalability and market impact, and engage stakeholders in aligning technological advancements with broader energy transition and decarbonization objectives. Through the regulatory sandbox, the CRE provides a structured pathway for innovations to be tested and potentially integrated into the energy market, highlighting the commission’s crucial role in adapting regulatory frameworks to support the evolution of France’s energy sector.

Themes

Changes to the legal framework
How regulators are creatively addressing decarbonization

Main Findings

An effective government-regulator relationship is vital
Regulators are creatively addressing decarbonization

Recommendations

For Government: Gather regulators’ inputs
For Government: More resources
For Regulators: Advise governments on practical implications
For Regulators: Anticipate the low-carbon future in their decisions
For Regulators: Reform regulatory processes

Key Insights

Application of decarbonization criteria in recent decisions
Appropriateness of existing legal/regulatory framework in addressing decarbonization
Potential Enhancements to the legal/regulatory framework

Where France
Who Energy Regulatory Commission (CRE) (Commission de Régulation de l’Énergie)
Link Organization https://www.cre.fr
Legal System Civil Law
Type of Solution Policy Development and Implementation
Technology Adoption and Integration
Economic and Financial Mechanisms
Public and Stakeholder Engagement

Context — Problem/Issue

The energy landscape is undergoing rapid transformation to meet global goals for CO2 emissions reduction, which requires a more adaptable electricity system and occasions the rise of new technologies (like electric vehicles) and self-consumption demanding smarter, more flexible networks. To facilitate these shifts, regulatory frameworks need to evolve. Some jurisdictions have responded by implementing regulatory sandboxes as an essential tool to foster innovation.

In France, the Energy-Climate Law of November 8, 2019 established a regulatory sandbox mechanism in the energy sector. This innovative mechanism allows the Commission de Régulation de l’Énergie (CRE) to grant exemptions for using networks and facilities on a trial and temporary basis to test and deploy innovative technologies or services that support the transition to smart energy systems and infrastructures. CRE ensures the national energy system is not compromised due to safety, reliability or efficiency issues, and that trials do not interfere with the proper fulfilment of the public service mission. The CRE’s role extends to offering regulatory flexibility by identifying and addressing regulatory barriers, evaluating projects for their potential scalability and impact on the energy market, and fostering dialogue among stakeholders to align innovations with energy transition and decarbonization goals. Successful sandbox projects can influence regulatory adjustments and the broader adoption of new technologies and practices within the energy sector.

The CRE, after public consultation, issued a guide of application of the regulatory sandbox mechanism, offering a clear pathway for innovators looking to contribute to the energy transition through their projects. In 2020, the CRE released a decision detailing the establishment and operational guidelines of the regulatory sandbox, outlining the procedures for submitting applications and the monitoring process for experimental projects approved by the CRE. Moreover, the framework was updated in 2022 to specify that applications would be processed on a rolling basis, indicating a more flexible approach to handling submissions. Eligibility criteria for the projects to benefit of this mechanism include: supporting energy policy goals; the introduction of an innovative aspect; encounter a specific legislative or regulatory hurdle; have the capacity for broader implementation, especially upon successful experimentation; and offer advantages to the wider community upon eventual rollout. In November 2022, the CRE published the progress of several experimental projects in the French electricity and gas sectors under the regulatory sandbox framework. Furthermore, the CRE granted two additional exceptions in the regulatory sandbox program in September 2023 and February 2024.

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Italy 1

Enabling regulatory change through regulatory sandboxes (Italy)

The transition in the electricity sector toward a model dominated by variable renewable energies (VRE) necessitates significant changes in operating rules to accommodate many owners and operators. This shift requires regulators to foster innovation and adapt rules rapidly to ensure a cost-effective and reliable supply. The Italian Regulatory Authority for Energy, Networks and Environment (ARERA) has been at the forefront of adopting a “regulatory sandbox” approach since 2010, facilitating regulatory adjustments in response to the growing presence of VRE in the power system. ARERA’s efforts have included regulatory experiments, particularly in regions with high VRE penetration, to test smart grid solutions. Successful experiments have led to regulatory modifications for Distribution System Operators (DSOs) to implement these changes more broadly. Additionally, ARERA has focused on system-wide modifications for increased flexibility, such as customer aggregation for flexibility services and the introduction of “Virtual Aggregated Mixed Units” (UVAM), blending consumers and producers in the same offer to enhance system flexibility, and pilot projects for electric vehicle (EV) home charging with relaxed fee structures.

Themes

Acceleration of regulatory processes to advance decarbonization
Changes to the legal framework
How regulators are creatively addressing decarbonization

Main Findings

Regulators are creatively addressing decarbonization
The regulatory handbrake on investment must be released

Recommendations

For Government: Gather regulators’ inputs
For Government: More resources
For Regulators: Advise governments on practical implications
For Regulators: Anticipate the low-carbon future in their decisions
For Regulators: Reform regulatory processes

Key Insights

Government-regulator relationship
Application of decarbonization criteria in recent decisions
Potential Enhancements to the legal/regulatory framework

Where Italy
Who Regulatory Authority for Energy, Networks and Environment (Autorità di Regolazione per Energia Reti e Ambiente) (ARERA)
Link Organization https://www.arera.it/en
Legal System Civil Law
Type of Solution Policy Development and Implementation
Technology Adoption and Integration
Economic and Financial Mechanisms
Public and Stakeholder Engagement

Context — Problem/Issue

The shift in the electricity sector from a system that is dominated by a few large fuel-based generators to one based on variable renewable energies, with many owners and operators, will require very different operating rules. Consequently, the regulator needs to allow a great deal of innovation so that changes to the rules can be made as quickly as possible and deliver more cost-effective, reliable supply.  One of the regulatory experts we spoke to cited the Italian Regulatory Authority for Energy, Networks and Environment (ARERA) as a leading user of a “regulatory sandbox” approach, which it has been doing since 2010, to help adjust its regulatory rules to adapt to a changing power system. The work of the authority was also cited in Ofgem’s latest proposals for a Future Regulation Sandbox.

 

ARERA has been active in encouraging “regulatory experiments” in the power sector since 2010, in response to a very rapid increase in variable renewable energy in the power system. ARERA recognized that changes to regulations would be needed to adapt the power system to these changes in the most cost-effective way. The first phase of regulatory experiments was focused on regions of the country where distributed VRE penetration was relatively high and so where potential smart grid solutions could be tested. The proven success of some of the experiments resulted in the modification of regulatory framework for the DSOs to implement these changes at a larger scale in a subsequent regulatory period.

The second phase of changes focused more on system-wide modifications such as the need for increased system flexibility to manage the increment in renewable energy.  For example, aggregation of customers to offer flexibility services has been developed in Italy through a series of pilot projects managed by the sole TSO, Terna. While early pilots allowed only aggregation of either consumers or producers, in 2018 Terna, with the approval of ARERA, introduced a pilot for “Virtual Aggregated Mixed Units” (UVAM), similar to a Virtual Power Plant.  For this pilot, ARERA agreed to the relaxation of the 1 MW limit for each individual participant and to allow the mix of consumers and producers to participate in the same offer. These projects, with a minimum aggregate size of 1 MW, are still mainly aimed at commercial and industrial customers, but residential projects are being gradually introduced. UVAM are paid both an energy fee (euros per MWh) but also a resource availability fee (euros per MW) and can participate in balancing and ancillary service markets. As of December 2021, there were 220 UVAM offering 1280 MW of capacity. Early analysis of these projects finds that the approach has been quite successful at tapping into a new source of system flexibility. Another more recent example is examining the issue of home charging of electric vehicles (EVs). While most EVs have onboard charging which allows for charging at home at a rate of 5-6 kW, the typical capacity limit for most Italian households is 3 kW, and those exceeding this demand will have an automatic trip of the power supply, due to the activation of a breaker in the smart meter. Network users wishing to upgrade to higher capacity will normally have to pay one-off charges for the capacity increase and pay higher monthly fees. ARERA  has approved a pilot project with a derogation from the higher fees, provided the customer’s EV charging equipment is capable of remote communications.

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Ontario

Getting government support for electricity tariffs that promote electrification (Ontario)

Electrification offers an opportunity to implement innovative electricity rates that incentivize smart charging for electric vehicle (EV) owners. While traditional time-of-use (TOU) pricing aimed at reducing peak consumption with minor price differences, electrification presents an opportunity to revisit these strategies to encourage charging during low-cost, off-peak hours. In Ontario, the Ontario Energy Board (OEB) has led successful reforms in rate structures to support electrification, particularly for EV charging. This initiative began with pilot programs and involved close collaboration between the regulator, the government and stakeholders, leveraging smart meters to introduce new rates that encourage off-peak charging, thereby aligning with non-emitting power generation periods. To further support innovation in the energy sector, the OEB introduced the OEB Innovation Sandbox program in 2019, facilitating pilot projects that explore new services, activities and business models in the electricity and natural gas sectors.

Themes

Changes to the legal framework
How regulators are creatively addressing decarbonization
Importance of government-regulator relationships

Main Findings

An effective government-regulator relationship is vital
Regulators are creatively addressing decarbonization

Recommendations

For Government: Gather regulators’ inputs
For Regulators: Advise governments on practical implications
For Regulators: Anticipate the low-carbon future in their decisions
For Regulators: Reform regulatory processes

Key Insights

Government-regulator relationship
Application of decarbonization criteria in recent decisions
Potential Enhancements to the legal/regulatory framework

Where Canada, Ontario
Who Ontario Energy Board (OEB)
Link Organization https://www.oeb.ca
Legal System Common Law
Type of Solution Technology Adoption and Integration
Economic and Financial Mechanisms
Public and Stakeholder Engagement

Context — Problem/Issue

Charging different prices for electricity by the time of day has long been a tool used by electric utilities and approved by regulators to discourage the use of energy during peak periods and encourage consumption at off peak. Most such programs offer a relatively modest difference in the price between peak and off-peak periods (a ratio of less than 3:1), but most were aimed at reducing peak consumption rather than encouraging greater use of electricity.

Electrification provides the opportunity to rethink that policy. For example, the owner of an electric vehicle with an ability to recharge at home can choose when to start or stop recharging the vehicle. Small differences in the price are unlikely to encourage them to charge during periods when the cost to supply electricity is lower. Conversely, the availability of very low-cost charging may encourage electrification of other flexible services, such as domestic hot water heating, to make them more competitive with fossil fuel alternatives.

Furthermore, the issue of electricity rates is a sensitive one for policymakers, and electricity subsidies to protect consumers against price increases has become very common in the past few years, reaching $400 billion USD globally in 2022. Getting policymakers to support changes in electricity rates, where prices at certain periods will be higher than previously, is crucial for a successful program.

The Canadian province of Ontario provides an example where the regulator has worked closely with the government and stakeholders to introduce a new rate that supports electrification. In that province, virtually all customers have a smart meter and most residential customers are on default time-of-use rates which are set by the regulator, the Ontario Energy Board. The Ontario TOU rates have a relatively modest difference between the price at the peak hours and the off-peak hours (roughly a 2:1 ratio). The regulator had, on its own initiative, previously undertaken a number of alternative pricing pilot programs.  One of these programs, targeted toward electric vehicle owners, was able to demonstrate the effectiveness of an alternative rate, where prices would be very low at night and up to ten times higher during peak hours. This pilot program was highly effective at shifting consumption of EV-owning customers to overnight hours, when non-emitting generation (largely nuclear power, hydroelectric or wind) predominates, compared to peak hours, when natural gas is often the marginal fuel.

Some years later, the government asked the OEB to develop an alternative rate that would encourage shifting to overnight hours. The OEB developed a detailed proposal for which it also carried out a stakeholder consultation. The government approved of the new optional rate and amended a regulation to allow the OEB to implement it. The new rate has received the full support of the government. In fact, the government has taken ownership of the initiative: its press release announcing the implementation of the new rate mentions the regulator only in passing. The regulator chose not to issue any press release on its role in developing the new rate, releasing instead its price report outlining the new rates and how they were established, and more detailed information as to how the new rate would operate. The new rate has been progressively rolled out to customers across Ontario since May 1, 2023.

The Ontario Energy Board (OEB) has launched further pilot projects to explore innovative activities, services and business models within Ontario’s electricity and natural gas sectors, through a regulatory sandbox approach. The OEB Innovation Sandbox program was launched in 2019 to provide information services and project-specific support. Some successful case studies from the program include: (i) the proposal of a non-wires alternative with whole-home battery energy storage systems (BESS) for customers in hard-to-access, forested areas, aiming to provide reliable power during outages, with an expected reduction in outage hours by 50% or more. Despite challenges such as site suitability and compliance with safety standards, 39 BESS installations had significantly reduced outage times by August 2022. (ii) the analysis of customer-owned distributed energy resources (DERs) to meet rising electricity demand through North America’s first local electricity market at the distribution level, resulting in considerable peak demand reduction and efficient local capacity utilization, highlighting the potential of DERs to address increasing electricity demand efficiently.

Furthermore, in October 2023, the OEB allocated $1.5 million in one-time funding to six projects as part of the Innovation Sandbox Challenge, aimed at scaling pilot projects and devising novel methods to educate consumers about their part in the energy transition toward sustainability. The projects selected focus on enhancing customer engagement, enabling demand response participation, and facilitating energy transition understanding among various groups, including low-income and indigenous communities. Funding for these initiatives is sourced from administrative monetary penalties collected by the OEB.

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CRE’s Role in Fostering Innovation within France's Energy Sector through Regulatory Sandboxes (France)

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Addressing carbon content in solar PV procurement (France)

Changes in transmission permitting — Becoming more deeply involved in transmission line siting (Germany)

Dealing with a loss of gas customers- Addressing implications of electrification: gas disconnection policy (Australia)

Efficiency Mandates and Externalities Internalization: Shaping Renewable Energy through Regulatory Insight, Policy, Legal and Regulatory Adaptation (Mexico)

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Regulatory Initiatives for Enhanced Grid Flexibility: Setting Tariffs and Frameworks for Electricity Storage in Barbados

Strengthening Grenada's Resilience: Transitioning to Renewable Energy Amidst Climate Challenges (Grenada)

Enhancing Regulatory Capabilities: URE's Role and Challenges in Poland's Decarbonization Journey (Poland)

Planning requirements — Requiring utilities to model a decarbonized future (Michigan)

France 1

Addressing carbon content in solar PV procurement (France)

France, as it procures new renewable electricity, particularly solar energy, is increasingly considering the carbon footprint of the equipment used in generating power and its manufacturing. Since 2017, the Energy Regulatory Commission (Commission de Régulation de l’Énergie, CRE) has conducted 14 procurements for large solar farms, totaling over 10 gigawatts peak (GWp). The CRE has developed a tender evaluation methodology that allocates points based on various criteria (including the project’s price and environmental impact), with a significant portion of points dedicated to the embodied carbon content of the solar panels and equipment used. This approach incentivizes developers to select equipment with lower carbon content and directly impacts the selection of solar panels based on their manufacturing origin due to the differing carbon emissions associated with their production.

Themes

How regulators are creatively addressing decarbonization

Main Findings

Regulators are creatively addressing decarbonization
The regulatory handbrake on investment must be released

Recommendations

For Government: A carbon price
For Regulators: Anticipate the low-carbon future in their decisions

Key Insights

Application of decarbonization criteria in recent decisions

Where France
Who Energy Regulatory Commission (CRE) (Commission de Régulation de l’Énergie)
Link Organization https://www.cre.fr
Legal System Civil Law
Type of Solution Technology Adoption and Integration
Economic and Financial Mechanisms

Context — Problem/Issue

In several jurisdictions we interviewed, regulators have responsibilities for carrying out or overseeing procurements of new renewable electricity generation. Although the primary objective of these procurements is to increase renewable energy generation and thereby decrease emissions from electricity supply, decarbonization objectives of governments are becoming broader. It has been shown that a large share of emissions attributed to France come through embedded emissions from manufactured imports. As such, the carbon dioxide emitted in producing the generating equipment is also a consideration in the procurement of that equipment. Solar panels produced in China, where most of the world’s panels are made, result in more emissions than solar panels made in low emissions jurisdictions, such as France, primarily because of the relative low emissions from electricity needed to manufacture the panel components.

In France, the government procures new renewable electricity generation sources, including solar photovoltaic, through tenders operated by the Energy Regulatory Commission (CRE).  Since 2017, the CRE has carried out 14 such procurements for large solar farms, procuring a total of over 10 GWp.

The CRE publishes its methodology for evaluating the applications known as the Cahier des Charges (which is drafted by the government). Central to the methodology is the rating of criteria according to a points system for which the maximum possible is 100 points, which are allocated to a small number of criteria. Currently, for ground-based solar photovoltaic installations, price is by far the most important criterion, with up to 70 points allocated based on the price offered (more points for a lower price). Other criteria include if the project will be developed on a site which is already environmentally degraded (worth nine points) or if the project is governed or financed by a local community (worth up to five points). The remaining 16 points are allocated according to the embodied carbon content of the production of the panels and related equipment. The intent is to provide an incentive for developers to consider explicitly the carbon content of the equipment they plan to use in the solar farm. All major components of the installation are considered from the manufacturing of the polysilicon used to the inverters employed. While developers are encouraged to produce a specific life cycle assessment for their project, the CRE also produces a default table of estimates per kg of material that can be used. The results vary by country primarily because of the different emissions associated with the electricity that is used to produce the components:

Default emissions factors for c-Si solar panel components for selected countries of origin
All figures are kg CO2 equivalent per kg of material (unless otherwise indicated)

Material/process France China US
polySi Siemens process 23.117 141.023 93.149
ingot processing multi 9.856 18.323 11.583
wafer processing multi (per wafer) 0.349 0.891 0.792
cell processing multi (per cell) 0.202 0.577 0.425
glass 1.045 1.164 1.115
module processing multi 7.448 11.446 9.822

Source: extracted from Table 3, Cahier des Charges (Commission de régulation de l’énergie (CRE)). (2023, November). (p 59-63)

Applicants must demonstrate that the embodied carbon content for their solar farm falls below a ceiling value (now 550 kg CO2/kWp). Any proposal with total emissions per kWp above the ceiling will not be considered. Conversely, any proposal with carbon content below a floor level (currently 200 kg CO2/kWp) will receive all 16 points. Those in between are awarded points according to the following formula.

Where
ECS = the CO2 emissions intensity of the project (kg CO2/kWp)
NC       = Number of points to be awarded to the project for its carbon content
NCo     = Maximum number of points (16)
ECSsup = The ceiling value for emissions intensity (550 kg CO2/kWp)
ECSinf   = The floor value for emissions intensity (200 kg CO2/kWp)

In effect, what a points award does is reward lower carbon content in the same way a lower price is rewarded, for which there is a similar formula. It is therefore possible to deduce that a decrease of 38 kg CO2/kWp earns the same number of points as a decrease of 1 euro per MWh in the bid price. This implies a carbon price of around 480 euros per tonne of CO2 avoided.[1]

The CRE administers the tender, makes awards to the points system, and then publishes a (redacted) synthesis report on the tender results. The transparency that the regulator uses is helpful to both policymakers and potential bidders. They can learn the average prices paid, the share of bids accepted and the performance of the bids against the various criteria. This includes the mean carbon content, which in the latest tender has stayed within a range of around 400-500 kg CO2/kWp. They also publish the national origin of the panels; in the latest round, nearly all the panels came from China, although in earlier rounds, European and American suppliers had played a significant role.

[1] The implied carbon price is calculated by assuming the bidder increases their bid price to offset their lower carbon content.  The additional revenue is discounted at 4%.

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Example coming soon. (Michigan)

Example coming soon. (British Columbia)

Example coming soon.

Example coming soon (Australia & Western Aus)

Example coming soon. (Italy)

Example coming soon. (New Mexico)

Example coming soon (United Kingdom)

Example coming soon. (British Columbia)

Example coming soon. (Michigan)

CNE's Adaptative Role in Decarbonization Efforts (Chile)

GNERC's Strategic Initiatives: Implementing a Sustainable Energy Landscape (Georgia)

Japan’s Launch of Long-Term Decarbonized Power Resource Auctions (Japan)

New Mexico’s Regulator Ensuring a Just Transition Through Energy Transition Bonds (New Mexico)

EgyptERA’s Strategic Initiatives Paving the Way for Renewable Energy and Efficiency

Responding to a broader regulatory mandate (United Kingdom)

Assessing ratepayer funding of a hybrid heating program (Canada, Québec)

CRE’s Role in Fostering Innovation within France's Energy Sector through Regulatory Sandboxes (France)

Enabling regulatory change through regulatory sandboxes (Italy)

Getting government support for electricity tariffs that promote electrification (Ontario)

Addressing carbon content in solar PV procurement (France)

Changes in transmission permitting — Becoming more deeply involved in transmission line siting (Germany)

Dealing with a loss of gas customers- Addressing implications of electrification: gas disconnection policy (Australia)

Efficiency Mandates and Externalities Internalization: Shaping Renewable Energy through Regulatory Insight, Policy, Legal and Regulatory Adaptation (Mexico)

Interpreting new requirements to consider decarbonization in regulatory decision making (Australia)

Balancing Growth and Grid Stability: Revising Solar PV Installation Limits and Pricing in Saint Lucia's Transition to Renewable Energy (Saint Lucia)

Progressive Hydrogen Initiatives and Regulatory Framework Development to Advance Decarbonization (France)

EPRA's Regulatory Innovations Fueling Renewable Adoption and EV Infrastructure (Kenya)

Regulatory Initiatives for Enhanced Grid Flexibility: Setting Tariffs and Frameworks for Electricity Storage in Barbados

Strengthening Grenada's Resilience: Transitioning to Renewable Energy Amidst Climate Challenges (Grenada)

Enhancing Regulatory Capabilities: URE's Role and Challenges in Poland's Decarbonization Journey (Poland)

Planning requirements — Requiring utilities to model a decarbonized future (Michigan)

Germany

Changes in transmission permitting — Becoming more deeply involved in transmission line siting (Germany)

Germany’s ambitious Energiewende policy, aimed at transitioning from nuclear and coal energy to renewable sources, necessitated significant investments in transmission to link wind and solar generation in the north and east to demand in the west and southwest. Over 7,500 km of new or upgraded power lines were estimated to be needed. From 2009, six legislative reforms over 13 years aimed at accelerating the transmission expansion, granting the German regulator (Bundesnetzagentur) increased authority in the planning, approval and environmental assessment of transmission projects, and recently introduced provisions to start construction before final approval under certain conditions. Despite these efforts, significant projects have faced delays due to local opposition, permitting challenges, and the complexities of underground construction, which increased both costs and time. As of October 2023, only a fraction of the required line approvals had been secured, though the pace is expected to pick up following final planning approvals.

Themes

Acceleration of regulatory processes to advance decarbonization
Changes to the legal framework

Main Findings

An effective government-regulator relationship is vital

Recommendations

For Government: Gather regulators’ inputs
For Government: More resources
For Regulators: Advise governments on practical implications
For Regulators: Anticipate the low-carbon future in their decisions
For Regulators: Reform regulatory processes

Key Insights

Appropriateness of existing legal/regulatory framework in addressing decarbonization
Potential Enhancements to the legal/regulatory framework

Where Germany
Who Bundesnetzagentur – German Energy regulator
Link Organization https://www.bundesnetzagentur.de/EN/Home/home_node.html
Legal System Civil Law
Type of Solution Policy Development and Implementation
Technology Adoption and Integration

Context — Problem/Issue

The rise in the share of variable renewable energy will increase the importance of investment in transmission and distribution to link the new generation resources to the loads. It has long been recognized that the speed at which new transmission facilities have been developed could become a brake, rather than an accelerator, of the clean energy transition. Greater regulatory involvement in transmission siting has been suggested as one solution to this issue.

Germany’s Energiewende policy aims to replace nuclear energy (which was fully phased out in April 2023) and eventually coal-fired generation with renewable sources of energy, mainly wind and solar photovoltaic. As most of the wind resources (and all of the offshore wind resources) are located in the north and east of the country, compared to most of the industrial demand and retiring power plants that are located at the west and southwest parts of Germany, it was long recognized that major investments in transmission would be required to link the new supplies with demand. The government estimated that over 7,500 km of new power lines were needed to be upgraded or developed, and the government started to adapt the country’s electricity transmission grid through a coordinated network expansion.

The urgent need for grid expansion for the energy transition was first set by law in the Power Grid Expansion Act (EnLAG) of 2009 that aimed, among other things, to complete priority transmission lines by 2015. It listed twenty-two priority projects that are the exclusive responsibility of the federal states, referred to as the “start network,” since they would be the basis for any further transmission system expansion in the country. This was further enhanced in 2011 with the Grid Expansion Acceleration Act (NABEG) that established the planning of network expansion projects that crossed interstate or international borders. The NABEG set up responsibilities to the energy regulator Bundesnetzagentur (BNetzA) and set out the detailed planning process for the electricity network development plan, which the BNetzA must approve. Further enhancements were made in 2013 when the Federal Requirements Plan Act (BBPlG) came into force that defines the starting and finishing points of the identified projects, and established BNetzA as responsible for selecting the line routing for interstate or international projects. An additional change in 2015 was particularly significant in terms of its impact on cost and timing of transmission projects. An amendment to the Federal Requirements Plan Act was made that stipulates, by general rule, that underground cables are the standard for high-voltage projects, hence, only under strictly limited circumstances can overhead line sections be used. Still more changes were made in 2019 through an amendment to the Grid Expansion Acceleration Act (NABEG 2.0). The changes involved the legalization and standardization of compensation procedures to landowners affected by the network expansion, the establishment of a national offshore test field to system security, and the regulation of network bottleneck management aiming to a more efficient and cost-effective management in the future. Further modifications were made in 2022 when new rules were put in place that allow the BNetzA to grant approval to start construction work before the final planning approval is received. This allows the project developer to begin construction; however, the activities would need to be reversed and the original condition of the land restored if final approval is ultimately not given.

This series of six legislative reforms over 13 years has ensured that one of the BNetzA’s main tasks in the energy sector is “promoting efficient permit granting processes for Germany’s extra-high voltage network to accommodate the growing importance of renewable energy.”  Today, specific powers of the regulator with respect to transmission planning and siting include:  (i) Approving the overall framework for network expansion developed by the four transmission system operators (TSOs). The BNetzA holds a public consultation on the proposals and approves the framework, which binds the TSOs for the system plans; (ii) Reviewing and approving the network development plans of the transmission system operators, which include the corridors needed for grid expansion. These plans (NEP) are updated regularly and progress on implementation must be reported annually; (iii) Submitting to the government the NEP as a draft for the Federal Requirements plan that identifies the priority transmission expansion projects and includes an environmental report to the government at least every four years. The government submits the Federal Requirements Plan Act draft to the parliament.  These plans become binding upon adoption by the parliament; (iv)  Assessing the environmental impact of transmission projects that cross state or national boundaries, establishing the exact routes for the projects; and (v) Allowing early sectoral construction to begin on limited portions of the project before final planning approval is obtained to accelerate overall project completion. These new powers were in addition to their existing authorities to set network tariffs for the TSOs and to ensure an efficient level of investment in transmission.

The three electricity highways consist of direct current ultra-high voltage-lines known as SuedLink, SuedOstLink and the A Corridor that comprises the A-Nord and the Ultranet projects. The BNetzA had originally started the approval procedures for these three major electricity highways in 2013, with the intention that all three lines would be in operation by the end of 2022, the planned phaseout date for nuclear power plants. Despite all the regulatory changes made to speed up planning and permitting, none of the projects are yet operational. The three projects started construction in 2023. Despite the possibility for sectoral approval and constructions, direct current connection lines cannot become operational in sections, but only as a whole.

In the case of the SuedLink line, strong local objections regarding people not wanting the lines to affect their lands (“not in my backyard concerns”), and concerns about the technology and its further relation to policy, have considerably delayed the project. The project was originally expected to be finished by the end of 2022, but now, with sectoral construction just started in September 2023, the project will not be in service until 2028. Additional delays have been caused due to permitting and compensation bottlenecks; tens of thousands of landowners need to be approached, not an easy nor fast task. Undergrounding the line has also increased costs and time both to redesign the project and will take longer to construct.

SuedOstLink has suffered similar delays. Thanks to the acceleration of permitting procedures, SuedOstLink first converter station just started construction in March 2023; the permit’s approval only took seven months and is scheduled for completion in 2025.

The projects known as A-Nord and Ultranet, that are part of Corridor A (of about 600 km in total), received siting approval in 2021. Small sections of the A-Nord part of the project (totaling 6 km in length) began construction in October 2023, thanks to a provisional approval of early start of construction from BNetzA in October 2023. Final planning approval is expected by 2024 and completion of the line is now expected in 2027. The Ultranet project, which does not require undergrounding, since it will mostly be using existing power lines, has yet to begin construction but aims to be completed in 2025.

Despite all its expanded authorities over the approval of 7,400 km of new high voltage power lines, the BNetzA is not responsible for the 14,000 permits that must be issued by local and state authorities. BNetzA does monitor the status of these approvals and has found that by the end of October 2023 only 857 km of lines have the necessary approvals. It is worth noting that under new legislation, the lack of final planning approval (and hence permit issuance) is no longer a barrier to beginning construction and that the rate of permits issue is expected to accelerate beginning in mid-2024 after final approvals are received.

The BNetzA expects that permits covering an additional 4,400 km of lines are expected by mid-2025 which will also cover most of the Suedlink and SuedOstLink projects.

In summary, giving the regulator expanded authority for transmission line approvals did not, in this instance, result in an ability to proceed quickly with major transmission expansions needed to support the energy transition in Germany.  Six legislative reforms over 13 years have improved matters but overcoming local environmental and acceptance barriers have remained the main obstacles.

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Australia AER

Dealing with a loss of gas customers- Addressing implications of electrification: gas disconnection policy (Australia)

Regulators have just begun to grapple with the questions of the future of the natural gas network.  The issue was explored in depth in an information paper: Regulating gas pipelines under uncertainty published by the Australian Energy Regulator (AER). The AER was also responsible for changing policy on the recovery of gas disconnection costs, reducing disconnection charges driven by concerns about safety in light of the increasing number of households disconnecting from the gas grid.

Themes

Acceleration of regulatory processes to advance decarbonization
How regulators are creatively addressing decarbonization

Main Findings

An effective government-regulator relationship is vital
Regulators are creatively addressing decarbonization
The regulatory handbrake on investment must be released

Recommendations

For Government: Gather regulators’ inputs
For Government: More resources
For Regulators: Advise governments on practical implications
For Regulators: Anticipate the low-carbon future in their decisions
For Regulators: Reform regulatory processes

Key Insights

Application of decarbonization criteria in recent decisions

Where Australia
Who Australian Energy Regulator (AER)
Link Organization https://www.aer.gov.au
Legal System Common Law
Type of Solution Economic and Financial Mechanisms

Context — Problem/Issue

A government’s decarbonization policy will have implications for the natural gas networks and how they are regulated. Regulations may prohibit new gas connections and subsidies may encourage electrification.  Demand for natural gas is expected to decline over time.

As noted in Chapter 2 of the report, the Australian Energy Regulator (AER) has already begun to think about the long-term implications of a reduction in natural gas use by households in its information paper, Regulating gas pipelines under uncertainty. However, AER has also recognized that this is not a purely theoretical issue and contended with the issue in its latest hearing on a gas distributor (Gas Net Australia — which serves the state of Victoria), leading to a final decision published in June 2023. This included proposals from the gas distributor such as the pass through of carbon emissions permit costs (which was granted), and a request for accelerated depreciation of assets (which was granted only in part, to limit rate increases).  One of the more surprising issues raised related to gas disconnections, specifically how much to charge residential customers who decide that they wish to disconnect from the gas system.

When a customer ceases taking gas service and wishes to disconnect permanently from the gas system, safety requirements, set by the gas safety regulator in Victoria (Energy Safe Victoria), mean that the connection pipe from the gas main to the property should be removed and the gas main sealed at the connection point. Other options, such as disconnecting the meter and capping the pipe, are not considered sufficiently safe. The customer requesting disconnection is responsible for paying the disconnection costs, which are estimated to be around $1000 AUD per disconnection. With increasing electrification of customers (Victoria has banned new gas connections), the number of small customers getting off gas has significantly increased and can be expected to increase in the future.  Faced with high disconnection costs, however, many of these customers are instead opting for temporary disconnection, which is much cheaper but is neither a permanent nor a safe solution when gas is no longer needed. Concerned about the safety of this practice, the regulator considered whether to do away with disconnection charges altogether to ensure all departing customers were safely disconnected or retaining the full cost charge which would minimize the impacts of the departure on other customers. In the end, the regulator decided to adopt a hybrid approach: it cut the disconnection fee to $220 AUD per customer, less than a quarter of the fully allocated cost of disconnection, with the remainder of the costs to be recovered from other customers through the rates (the haulage tariff). It also recognized, however, that shifting costs onto remaining customers could not be a permanent answer:

This is not a long-term solution. Combined with declining throughput on remaining connections, it will put upwards pressure on haulage tariffs in the 2023–28 period until a more sustainable solution is identified. If, in future periods, we see further decline in demand and an increase in customers leaving the network, the upwards pressure on tariffs for remaining customers will only grow.

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Mexico

Efficiency Mandates and Externalities Internalization: Shaping Renewable Energy through Regulatory Insight, Policy, Legal and Regulatory Adaptation (Mexico)

Mexico’s energy regulator, the Comisión Reguladora de Energía (CRE), is an example of a relatively “early mover” in finding creative ways to incorporate decarbonization into regulatory decision-making. In the 1990s and early 2000s, the CRE effectively used its market efficiency mandate to support renewable energy sources, despite lacking a specific directive for clean energy. This strategy included interpreting market efficiency as addressing environmental externalities and was reinforced by subsequent policy, legal and regulatory modifications in Mexico which explicitly endorsed clean energy initiatives. Key regulatory measures, such as specific methodologies for cost considerations of renewable energy, exemplify the CRE’s indirect yet impactful role in promoting renewable energy development.

Themes

Changes to the legal framework
How regulators are creatively addressing decarbonization
Importance of government-regulator relationships

Main Findings

Regulators are creatively addressing decarbonization

Recommendations

For Government: A decarbonization objective in legislation
For Government: Gather regulators’ inputs
For Government: More resources
For Regulators: Advise governments on practical implications
For Regulators: Anticipate the low-carbon future in their decisions

Key Insights

Application of decarbonization criteria in recent decisions

Where Mexico
Who Ministry of Energy and Energy Regulator
Link Organization https://www.gob.mx/sener
https://www.gob.mx/cre
Legal System Common Law
Type of Solution Policy Development and Implementation
Technology Adoption and Integration
Economic and Financial Mechanisms
Public and Stakeholder Engagement

Who’s the Regulator?

The Comisión Reguladora de Energía (CRE, Energy Regulatory Commission) operates as an autonomous entity under the Ministry of Energy, with self-governance in technical and operational matters. Its principal mandate encompasses the regulation and oversight of the natural gas and electricity sectors, including the activities related to the extraction, refinement and distribution of hydrocarbon resources, as well as the generation, distribution and commercialization of electricity. Moreover, the CRE is tasked with the approval and implementation of regulatory frameworks and methodologies that dictate the interactions between energy suppliers, distributors and consumers, including setting tariffs, defining service standards, ensuring fair market practices, and the issuance and withdrawal of licenses for private power producers.

Context — Problem/Issue

Before a major energy reform in Mexico in 2013,[1] Mexico’s energy sector was characterized by state control and limited private sector involvement. The energy market, particularly for electricity and oil, was predominantly run by state-owned enterprises. Pemex held a monopoly within the oil sector and the Comisión Federal de Electricidad (CFE, Federal Electricity Commission) in the electricity sector, limiting private investment and participation. The market dynamics were largely controlled by government policies, with a focus on conventional energy sources like oil and gas and less emphasis on renewable energy sources. The energy sector was, and still is, heavily reliant on fossil fuels, with a significant portion of the economy depending on oil exports.[2]

 

Most greenhouse gas emissions in Mexico are produced by the energy sector, in part because historically most of electricity was generated with fossil fuels (mainly oil and gas). To address this, in the 1990s and early 2000s, the CRE utilized its mandate for market efficiency to indirectly promote renewable energy sources (RES), despite not having an explicit directive for clean energy. This approach hinged on interpreting market efficiency to include addressing externalities, a perspective bolstered later by the LAERFTE legislation (see below), which explicitly recognized clean energy mandates. In 1998, the CRE issued the methodology for determining charges for electric power transmission services (RES/083/98) and its subsequent modification in 1999  (RES/254/99). Later, in 2001, it published the methodology for setting transmission service charges, contract models, and agreements between suppliers, exclusively for power plants with renewable sources (RES/140/2001). These examples showcase how regulators can significantly influence renewable energy promotion through their efficiency mandates, even without direct authorization to promote renewables.

 

In 2007, the government issued the National Development Plan 2007-2012 that focused sustainable development as a key aspect of public policy. In the electricity industry, this meant encouraging methods to lessen the ecological footprint, including the adoption of renewable energy sources. At that time, renewable energy sources were not very competitive against traditional technologies (like gas), particularly when the environmental and social costs of conventional fossil fuel generation were not considered. Mexico, nonetheless, has a lot of potential for renewable energy sources, which fostered discussion among the government to implement the consideration of externalities into the analysis, in order to make renewable energy sources more competitive.

 

The CRE, in 2008, was one of the key stakeholders supporting a change in the law to explicitly recognize environmental externalities in acquisition of new electricity generation resources.  The new law, known as Ley para el Aprovechamiento de Energías Renovables y el Financiamiento de la Transición Energética (LAERFTE, Law for the Use of Renewable Energies and the Energy Transition Financing), along with the General Law on Climate Change (which stated that the Ministry of Energy shall seek at least 65% of clean energies in electric generation by 2024, in coordination with CFE and CRE) and the Ley del Servicio Público de Energía Eléctrica (Public Electricity Service Law), mandated developing a methodology to assess the externalities associated with electricity generation from both renewable and non-renewable sources across different generation capacities. With these laws, policymakers aimed to foster a more sustainable and environmentally responsible energy sector in Mexico. The emphasis is on internalizing the external costs associated with environmental and social impacts caused by the construction and operation of new generation plants, which traditionally may not have been captured by market mechanisms. This approach helps ensure that expansion strategies are not only cost-effective but also socially and environmentally sustainable​​​​.

 

The LAERFTE explicitly recognized clean energy mandates for CRE, which fostered the publication of methodologies to calculate fees for transmission services that suppliers offer to those generating electricity from renewable sources or through efficient cogeneration (RES/066/2010 and RES/194/2010). According to Francisco Salazar (Coordinator of ICER and former President of CRE, congressman and Chair of the Mexican Chapter of the World Energy Council), these fees aimed to fix the market shortcoming of not considering positive externalities into the calculation by reducing the cost of clean energy in order to achieve the desired social balance. Considering the geographical constraints of clean energy projects, CRE implemented a “green postage stamp type rate” as a uniform rate system based on usage levels, initially determined by long-term marginal costs and the short-term economic benefits of replacing costly fuel oil (with rates adjusted monthly for inflation). Salazar also noted that regulatory measures like these create positive externalities for renewable energy sources, not only encouraging renewable energy use but also driving down production costs due to increased demand. This benefits consumers through a self-reinforcing cycle of cost reduction and technological advancement.

 

The aforementioned laws paved the way toward publication of the methodology to value externalities associated with electricity generation in Mexico in December 2012 by the Secretaría de Energía (SENER, Ministry of Energy). This methodology set rules on how to include externalities as an operational cost in the dispatch of electricity and provided understanding of the cost-benefit analysis of investment projects for electric generation. The CRE held direct participation in the working group, led by SENER, for the development of this methodology. The aim was to encourage investment in low-environmental-impact technologies, by integrating the costs of social and environmental externalities and emissions into the selection of sources for electric power generation, thereby favoring investments in low-impact technologies and increasing generation from environmentally friendly power plants.

 

Although substantial legal changes came into force in 2015 with the publication of Ley de Transición Energética (Law of Energy Transition) that repealed the LAERFTE, externalities continue to be considered as part of electricity planning in Mexico, and the CRE is one of the entities involved in developing that methodology. One of the CRE’s significant responsibilities is to establish methodologies for calculating compensation for services rendered among entities within the energy sector, thereby promoting transparency and fairness in commercial relationships. With the enactment of the LAERFTE, the CRE was endowed with expanded powers to regulate and promote renewable energy sources. In January 2024, the CRE issued the General Criteria for the evaluation of the net benefit of works requested by private parties to be included in the Expansion and Modernization Programs of the National Transmission Network and the elements of the General Distribution Networks corresponding to the Wholesale Electricity Market, as well as for the transfer and acquisition of private networks (based on Art. 34 and 44 of the Electric Industry LawLey de la Industria Eléctrica), which contemplates the benefit from reduction of externalities.

Note: During the development of this Project, RAP did not interview the Mexican Ministry of Energy nor the Energy Regulatory Commission. We were nonetheless able to gather valuable information regarding the example described herein from an interview held with Francisco Salazar, Coordinator of ICER and former President of CRE, congressman and Chair of the Mexican Chapter of the World Energy Council (WEC), who had firsthand information on the matter.

 

[1] This energy reform aimed to liberalize the sector, by opening it up to private national and foreign investment, fostering a competitive market environment. This was expected to bring in new technologies, increase efficiency and diversify energy production, including a greater focus on renewable energy. The reform was seen as a significant change in regulation, potentially affecting the energy sector’s structure and the characteristics of energy use and production in Mexico.

[2] Mexico was one of the largest oil producers, with its economy heavily dependent on crude oil exports that contributed substantially to government revenues. The country, however, lacked the industrial capacity to meet its own demand for oil derivatives, leading to imports and relatively higher prices for these products when compared to prices in countries like the U.S.

 

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Efficiency Mandates and Externalities Internalization: Shaping Renewable Energy through Regulatory Insight, Policy, Legal and Regulatory Adaptation (Mexico)

Interpreting new requirements to consider decarbonization in regulatory decision making (Australia)

Balancing Growth and Grid Stability: Revising Solar PV Installation Limits and Pricing in Saint Lucia's Transition to Renewable Energy (Saint Lucia)

Progressive Hydrogen Initiatives and Regulatory Framework Development to Advance Decarbonization (France)

EPRA's Regulatory Innovations Fueling Renewable Adoption and EV Infrastructure (Kenya)

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Australia AEMC and AER

Interpreting new requirements to consider decarbonization in regulatory decision making (Australia)

Several of the regulators RAP spoke to suggested that a statutory requirement that recognizes the need to achieve decarbonization goals would be useful for their decision making. Australia has recently passed legislation requiring regulators to explicitly weigh these decarbonization goals in their regulatory decision making.

Themes

Changes to the legal framework

Main Findings

An effective government-regulator relationship is vital
Regulators need a decarbonization mandate

Recommendations

For Government: A decarbonization objective in legislation
For Government: Gather regulators’ inputs
For Government: More resources
For Regulators: Advise governments on practical implications
For Regulators: Reform regulatory processes

Key Insights

Potential Enhancements to the legal/regulatory framework

Where Australia
Who Australian Energy Market Commission (AEMC)
Australian Energy Regulator (AER)
Link Organization https://www.aemc.gov.au
https://www.aer.gov.au
Legal System Common Law
Type of Solution Policy Development and Implementation

Context — Problem/Issue

One issue that came up repeatedly in interviews with regulators was the value of having an explicit objective to address decarbonization, along with more traditional objectives such as price, quality, safety, reliability and security of supply. The most practical implication of such an objective is that it would be relatively straightforward to include the value of saved emissions in regulatory decision making. Another example of its usefulness regarded efforts by gas utilities to reduce methane losses: these could not be ratepayer funded on decarbonization grounds if there were no explicit objective to do so.

Australia is one of two jurisdictions (along with the United Kingdom) where a change to incorporate decarbonization as one of the regulatory objectives has recently been made. The legislation in Australia, known as the Statutes Amendment (National Energy Laws) (Emissions Reduction Objectives) Act 2023, received Royal Assent on September 21, 2023, and incorporates decarbonization objectives in the national laws respecting electricity, natural gas and energy retailing. The decarbonization objective for all three laws is the same. It requires energy regulators (Australian Energy Market Commission or AEMC and Australian Energy Regulator or AER) as well as the system operator (the AEMO or Australian Energy Market Operator) to give regard to the following objective that the long-term interests of consumers are to be served by:

the achievement of targets set by a participating jurisdiction— (i) for reducing Australia’s greenhouse gas emissions; or (ii) that are likely to contribute to reducing Australia’s greenhouse gas emissions.

The AEMC and the AER have each published guidance as to how they will interpret the new objective in their decision making. In the case of the AEMC, which makes and amends the rules for the energy markets, they have emphasized that inclusion of the new objective elevates the role of decarbonization in their decisions: whereas before such targets were part of the external context, now they are one of the central considerations (along with price, quality, safety, reliability and security of supply) that the AEMC must balance in making its decisions. The new objective also means that changes to the market rules for electricity or natural gas could be proposed based on achieving emissions reduction targets, something that would not have been a sufficient criterion before. For each proposed rule change, the AEMC will assess whether the emissions reduction impact is likely to be a material part of the benefits (or costs) of the change that is being proposed.  If so, it will address the emissions objective and how it is being evaluated in its consultation and decision documents. The evaluation could be either quantitative or qualitative depending on the context. One issue if a quantitative assessment is used, is the need to use an appropriate methodology to value emissions reductions. The AER and AEMC plan to rely on the methodology being developed by the Commonwealth government. Separately, the AEMC has published the targets for jurisdiction (state, territory or commonwealth) that it (and the AER) must have regard to in its decision making.

The AEMC is also amending the national electricity and gas rules to harmonize with the new objective. These changes include requiring network and pipeline operators to consider emissions benefits and costs in their regulated expenditure proposals, and in applying the regulatory investment tests.

The AER, who regulates the gas and electricity networks and oversees energy retailing, published its own guidance on how it deals with the new objective. It indicates a requirement to consider the new objective for applications currently underway for electricity transmitters and distributors. They point to a need to revise the regulatory investment tests that they apply to the network investment plans of electricity transmitters and distributors to estimate the carbon dioxide savings that would be made by the investment, as well as the value of those savings, in determining whether an investment proposal should be approved.  The AER also identifies the inclusion of the value of emissions saving in evaluating investments by network owners to support distributed energy resources (now referred to as consumer energy resources by the AER) as another area likely to be affected.

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Japan’s Launch of Long-Term Decarbonized Power Resource Auctions (Japan)

New Mexico’s Regulator Ensuring a Just Transition Through Energy Transition Bonds (New Mexico)

EgyptERA’s Strategic Initiatives Paving the Way for Renewable Energy and Efficiency

Responding to a broader regulatory mandate (United Kingdom)

Assessing ratepayer funding of a hybrid heating program (Canada, Québec)

CRE’s Role in Fostering Innovation within France's Energy Sector through Regulatory Sandboxes (France)

Enabling regulatory change through regulatory sandboxes (Italy)

Getting government support for electricity tariffs that promote electrification (Ontario)

Addressing carbon content in solar PV procurement (France)

Changes in transmission permitting — Becoming more deeply involved in transmission line siting (Germany)

Dealing with a loss of gas customers- Addressing implications of electrification: gas disconnection policy (Australia)

Efficiency Mandates and Externalities Internalization: Shaping Renewable Energy through Regulatory Insight, Policy, Legal and Regulatory Adaptation (Mexico)

Interpreting new requirements to consider decarbonization in regulatory decision making (Australia)

Balancing Growth and Grid Stability: Revising Solar PV Installation Limits and Pricing in Saint Lucia's Transition to Renewable Energy (Saint Lucia)

Progressive Hydrogen Initiatives and Regulatory Framework Development to Advance Decarbonization (France)

EPRA's Regulatory Innovations Fueling Renewable Adoption and EV Infrastructure (Kenya)

Regulatory Initiatives for Enhanced Grid Flexibility: Setting Tariffs and Frameworks for Electricity Storage in Barbados

Strengthening Grenada's Resilience: Transitioning to Renewable Energy Amidst Climate Challenges (Grenada)

Enhancing Regulatory Capabilities: URE's Role and Challenges in Poland's Decarbonization Journey (Poland)

Planning requirements — Requiring utilities to model a decarbonized future (Michigan)

St. Lucia

Balancing Growth and Grid Stability: Revising Solar PV Installation Limits and Pricing in Saint Lucia's Transition to Renewable Energy (Saint Lucia)

The decreasing costs of solar photovoltaic technology have made rooftop installations increasingly appealing across the Caribbean, where fossil fuels have been predominantly used for electricity generation. The swift adoption of solar photovoltaic, however, has raised concerns about its effect on other consumers, which led the regulator in Saint Lucia, National Utilities Regulatory Commission (NURC), to establish limits on installations of 5 kilowatt (kW) for residential and 25kW for commercial customers. Such limitations, as well as the pricing mechanism for renewable energy sources are currently under revision.

Themes

How regulators are creatively addressing decarbonization
Importance of government-regulator relationship in implementing sensitive decarbonization initiatives

Main Findings

Regulators are creatively addressing decarbonization

Recommendations

For Government: More resources
For Regulators: Advise governments on practical implications

Key Insights

Application of decarbonization criteria in recent decisions

Where Saint Lucia
Who National Utilities Regulatory Commission (NURC)
Link Organization https://nurc.org.lc
Legal System Civil Law
Common Law
Type of Solution Economic and Financial Mechanisms

Context — Problem/Issue

Saint Lucia, like other Caribbean islands, faces significant climate risks due to its geographical location and economic reliance on climate-sensitive sectors such as agriculture and tourism. The country’s energy sector is heavily reliant on fossil fuel imports (oil products, mainly diesel) for electricity generation, which results in one of the highest electricity prices in the world, with families paying an average of $0.44 per kilowatt (USD) hour (triple the rate paid in other countries, like the United States). This significantly undermines the island’s economic competitiveness by escalating the operational costs for businesses and heightening financial instability within the country. To tackle this, the government has been proactively shaping the trajectory of its energy sector, crafting a detailed national energy policy in 2010 that aims to lower the cost and volatility of electricity prices and reduce the island’s dependence on imported oil by integrating renewable energy into the electricity generation mix. In 2018, the National Energy Transition Strategy (NETS) was issued to pave the way for diversification of energy sources, and integration of renewable energy into its power generation landscape. This strategy outlines a comprehensive action plan for achieving a sustainable, reliable, cost-effective and equitable electricity sector. It emphasizes the importance of utilizing local resources and includes a detailed 20-year strategy, along with a suite of optimal near-term projects.

The NETS suggests that a mix of utility-owned solar, distributed solar, wind, diesel and energy storage presents the best economic outcome for Saint Lucia, aiming for about 40% renewable energy penetration and exploring the potential for geothermal energy to further increase this share. Additionally, efforts have been made to expand and enhance the rural electrification network, improving its distribution capacity and reach. Saint Lucia has a goal of reaching 35% of renewable energy penetration by 2025, and a 7% reduction in greenhouse gas emissions in the energy sector by 2030, relative to the 2010 (NDCs).

The National Utilities Regulatory Commission (NURC) was established in 2016 to oversee the water supply and sewerage services and regulate the electricity system, including the introduction and integration of renewable energy sources. It regulates the vertically integrated utility, the Saint Lucia Electricity Services Limited (LUCELEC), which is responsible for generation, transmission and distribution of electricity. The Electricity Supply (Amendment) Act of 2016 opened the door to competition in the generation of electricity from renewable sources. LUCELEC, however, retains the exclusive rights to generate electricity from fossil fuels and remains the sole entity for transmission and distribution up until 2045.

The NURC has a specific mandate to ensure compliance with the Government’s international and regional obligations including its greenhouse gas emissions reduction commitments, relating to utility supply services. The NURC plays a crucial role in guiding the transition to a low-carbon energy system, ensuring that LUCELEC is aligned with the government’s energy transition policy. To that end, the NURC has been advancing on the regulatory framework, including the Application Procedure for Solar PV Generation, that sets the guidelines for those who wish to generate electricity (with capacity limits of 5 kilowatts (kW) for residential and 25kW for commercial usage) through solar photovoltaic and interconnect their system to LUCELEC’s grid. This has allowed a growing contribution from distributed generators, notably domestic and commercial customers equipped with solar photovoltaic systems, who are currently engaged in a net metering program, which allows them to sell excess electricity back to the grid. This arrangement is under ongoing review, through a public consultation on renewable energy pricing and capacity limits held in April 2023, and will likely evolve with future sector legislation. This consultation also encompassed the analysis of the pricing strategy for renewable energy as the current net metering approach was unsustainable by not considering the grid’s maintenance expenses.

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Japan’s Launch of Long-Term Decarbonized Power Resource Auctions (Japan)

New Mexico’s Regulator Ensuring a Just Transition Through Energy Transition Bonds (New Mexico)

EgyptERA’s Strategic Initiatives Paving the Way for Renewable Energy and Efficiency

Responding to a broader regulatory mandate (United Kingdom)

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CRE’s Role in Fostering Innovation within France's Energy Sector through Regulatory Sandboxes (France)

Enabling regulatory change through regulatory sandboxes (Italy)

Getting government support for electricity tariffs that promote electrification (Ontario)

Addressing carbon content in solar PV procurement (France)

Changes in transmission permitting — Becoming more deeply involved in transmission line siting (Germany)

Dealing with a loss of gas customers- Addressing implications of electrification: gas disconnection policy (Australia)

Efficiency Mandates and Externalities Internalization: Shaping Renewable Energy through Regulatory Insight, Policy, Legal and Regulatory Adaptation (Mexico)

Interpreting new requirements to consider decarbonization in regulatory decision making (Australia)

Balancing Growth and Grid Stability: Revising Solar PV Installation Limits and Pricing in Saint Lucia's Transition to Renewable Energy (Saint Lucia)

Progressive Hydrogen Initiatives and Regulatory Framework Development to Advance Decarbonization (France)

EPRA's Regulatory Innovations Fueling Renewable Adoption and EV Infrastructure (Kenya)

Regulatory Initiatives for Enhanced Grid Flexibility: Setting Tariffs and Frameworks for Electricity Storage in Barbados

Strengthening Grenada's Resilience: Transitioning to Renewable Energy Amidst Climate Challenges (Grenada)

Enhancing Regulatory Capabilities: URE's Role and Challenges in Poland's Decarbonization Journey (Poland)

Planning requirements — Requiring utilities to model a decarbonized future (Michigan)

France 2

Progressive Hydrogen Initiatives and Regulatory Framework Development to Advance Decarbonization (France)

France is intensifying its decarbonization efforts, including a strategic focus on hydrogen. The country’s policy on hydrogen includes initiatives for a tender-based support mechanism for low-carbon and renewable hydrogen production and incentives to promote sustainable practices. The Commission de Régulation de l’Énergie (CRE — French Energy Regulatory Commission) is actively contributing to the hydrogen strategy, with recommendations to develop a regulatory framework for hydrogen infrastructure including the redeployment of natural gas infrastructure to support the sector’s growth, as well as reviewing the government’s proposed support mechanism.

Themes

How regulators are creatively addressing decarbonization
Importance of government-regulator relationships

Main Findings

Recommendations

For Government: Gather regulators’ inputs
For Government: More resources
For Regulators: Advise governments on practical implications
For Regulators: Reform regulatory processes

Key Insights

Application of decarbonization criteria in recent decisions

Where France
Who Energy Regulatory Commission (CRE) (Commission de Régulation de l’Énergie)
Link Organization https://www.cre.fr
Legal System Civil Law
Type of Solution Policy Development and Implementation
Technology Adoption and Integration
Economic and Financial Mechanisms

Context — Problem/Issue

France is actively pursuing decarbonization and is currently embracing hydrogen as part of its broader strategy to achieve carbon neutrality by 2050. Hydrogen is a component of France’s latest national energy and climate plan (NECP), updated in November 2023, that states its goal to achieve a 30% reduction in final energy consumption by 2030 (compared to 2012 levels); a 58% increase of decarbonized energy by 2030 and 71% by 2035; a 45% increase of renewables in heating and cooling by 2030 and 55% by 2035; and a 15% injection of renewable gas into the network by 2030.

The NECP mentions the National Hydrogen Strategy, aimed at fostering the development of decarbonized hydrogen, with a significant emphasis on transforming heavy mobility into hydrogen-based systems. Specifically, France’s updated hydrogen initiatives include:

  • A tender-based support mechanism for the production of low-carbon hydrogen (open for consultation until October 20, 2023), aiming to fund projects in both capital and operational expenses and targeting up to 1 gigawatt of production capacity in recognition of the significant portion of hydrogen production that electricity costs constitute.
  • The introduction of either a tax or an incentive scheme within the Azote Climate Impact Fund (TIBICA/MIBICA) to promote the shift towards less carbon-intensive solutions, aiming to level the playing field between domestically produced and imported fertilizers, while supporting sustainable farming practices.
  • The potential expansion of the Incentive Tax on the Use of Renewable Energy in Transportation (TIRUERT). As of January 1, 2023, renewable hydrogen is eligible for credits under the TIRUERT scheme, which allows the contribution of hydrogen to be valued in the reduction of the carbon footprint of conventional fuel production (refining), biofuels, or e-fuels of all kinds. From January 1, 2024, low-carbon hydrogen will also be eligible for TIRUERT. The incorporation of targets from TIRUERT in road fuels are expected to continue increasing to meet the RED3 directive’s goal of at least a 14.5% reduction in greenhouse gas emissions from fuels by 2030. The NECP also contemplates hydrogen infrastructure, moving toward the completion of a priority transport network by 2026, along with potential regulatory options. This consideration also extends to hydrogen imports and addresses the challenges related to energy targets by 2030, prompting the government to plan for hydrogen import structures (or derivatives) post-2030.

To support the government’s direction on hydrogen, the CRE (established in March 2000) has been active in outlining its policy with respect to conversion of existing gas networks and the status of regulating dedicated hydrogen infrastructure. These were outlined in the CRE’s Contribution to the French Energy and Climate Strategy, issued in September 2023, which drew from five years of forward-looking exercises with key stakeholders, including the recommendation to issue regulation for low-carbon hydrogen infrastructure to meet climate objectives and energy sovereignty, for which CRE is focused on ensuring transparent and non-discriminatory access to hydrogen transport infrastructure.

In its contribution, the CRE states that as hydrogen is expected to play an increasingly significant role in France’s energy mix in the future certain gas infrastructure elements, such as gas transport pipelines and salt cavern storage, could eventually be converted for hydrogen use. CRE plans to further investigate the conditions under which these conversions might feasibly occur. The CRE also identifies the need, in the medium term, to develop a low-carbon hydrogen regulatory framework for dedicated infrastructures. Substantial public subsidies for its development would be required, given hydrogen’s current high prices. Public efforts should focus on sectors where hydrogen is essential, primarily for industrial decarbonization (steel, hydrocarbon refining, fertilizer production, cement industry, etc.) and heavy transport, including sustainable fuel production for maritime and aviation sectors. Technology neutrality among low-carbon hydrogen technologies should be considered: hydrogen produced by electrolysis from low-carbon electricity (renewable or nuclear) or hydrogen from fossil fuels with carbon capture and storage (CCS/CCUS).

Regarding hydrogen infrastructure, a progressive approach is being adopted. Significant infrastructures (long-distance networks, storage) may be subject to regulation, and efforts are being made in France and Europe to develop an appropriate regulatory framework. The CRE advises, however, that it is too soon to finalize the regulatory framework,  especially in terms of applying a complete third-party access regime to all hydrogen sector infrastructures. Public support should focus on the most mature uses and areas where these uses are concentrated to foster the emergence of territorial hubs near industrial zones and major European heavy transport routes. The interconnection of these hubs through large-scale hydrogen transport infrastructure will be considered progressively, depending on the development of various uses, which remains uncertain at this stage.

In addition, the CRE has reviewed the government’s proposed support mechanism for the production of low carbon and renewable hydrogen, which aims to back 1 gigawatt of electrolyzers over the next four years with approximately €4 billion in public support. The CRE evaluated the proposal and in November 2023 provided a detailed opinion, providing some key suggestions that include avoiding competitive dialogues to expedite the selection process, favoring operational aid over investment aid to ensure project viability, and offering CRE’s technical support if necessary. CRE also emphasizes the importance of clear support duration, effective management of project delays and special consideration for newly created companies to leverage their leaders’ past experience. These recommendations aim to streamline the hydrogen production support process, ensuring projects are financially and technically feasible and encouraging broader participation in the sector.

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Balancing Growth and Grid Stability: Revising Solar PV Installation Limits and Pricing in Saint Lucia's Transition to Renewable Energy (Saint Lucia)

Progressive Hydrogen Initiatives and Regulatory Framework Development to Advance Decarbonization (France)

EPRA's Regulatory Innovations Fueling Renewable Adoption and EV Infrastructure (Kenya)

Regulatory Initiatives for Enhanced Grid Flexibility: Setting Tariffs and Frameworks for Electricity Storage in Barbados

Strengthening Grenada's Resilience: Transitioning to Renewable Energy Amidst Climate Challenges (Grenada)

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Kenya

EPRA's Regulatory Innovations Fueling Renewable Adoption and EV Infrastructure (Kenya)

In Kenya, the shift toward renewable energy and improved energy efficiency is being significantly supported by the Energy and Petroleum Regulatory Authority (EPRA). To facilitate this transition, EPRA has introduced several key initiatives, including special tariffs for electric vehicle (EV) charging under the E-Mobility category and guidelines for the establishment and operation of EV charging and battery swapping infrastructure. These measures aim to make EV charging facilities widely accessible, encourage the rapid adoption of electric vehicles, and ensure charging rates are affordable for both EV owners and operators. This approach reflects EPRA’s commitment to foster a sustainable energy landscape, promote the use of renewable resources, and support Kenya’s ambitious goal of a 100% renewable energy share by 2030 amidst challenges like data management in tracking environmental outcomes and decarbonization efforts.

Themes

Acceleration of regulatory processes to advance decarbonization
Changes to the legal framework
How regulators are creatively addressing decarbonization
Importance of government-regulator relationships

Main Findings

An effective government-regulator relationship is vital
Regulators are creatively addressing decarbonization
Regulators can help each other

Recommendations

For Government: Gather regulators’ inputs
For Government: More resources
For Regulators: Advise governments on practical implications
For Regulators: Reform regulatory processes

Key Insights

Application of decarbonization criteria in recent decisions

Where Kenya
Who Energy & Petroleum Regulatory Authority (EPRA)
Link Organization https://www.epra.go.ke
Legal System Common Law
Type of Solution Technology Adoption and Integration
Economic and Financial Mechanisms

Context — Problem/Issue

In the past, Kenya’s electricity generation heavily relied on oil and hydropower. Electricity generation is dominated by the Kenya Electricity Generating Company (KenGen) but independent power producers are steadily increasing their market share.

Kenya has made significant progress in both ensuring electricity access and reducing emissions from power generation. The country’s electrification rate saw a significant jump from 19% in 2010 to 77% in 2021. Over the same period, emissions from power generation have halved, despite a doubling of demand, thanks to robust growth in geothermal and wind resources in particular. In 2021, 90% of generation came from renewable sources led by geothermal (41%), followed by hydro (30%) and wind (16%), with bioenergy and solar accounting for 2% and 1% respectively. In 2022, Kenya achieved 78% of renewable installed capacity. The government has set a greenhouse gas emissions reduction target of 32% by 2030 (compared to business as usual), and a goal of achieving a 100% renewable share in the power mix by 2030.

The EPRA was implemented by the Energy Act of 2019, as the independent regulatory authority tasked with the technical and economic oversight of Kenya’s electricity, petroleum (including upstream, midstream and downstream operations), coal development and renewable energy sectors. Its functions include issuing licenses, economic regulation (tariff review and approval), construction permits, overview of minigrids, enforcing compliance, and complaints and dispute resolution. It has specific mandates to adopt and implement measures of energy efficiency, to establish specific energy consumption benchmarks for energy consumers, to improve energy demand management to promote rational use of energy and reduce the use of non-renewable energy sources, to facilitate renewable sources deployment, to educate the public regarding energy demand management and conservation, and to maintain energy sector data, among others. EPRA also holds advisory participation and constant communication with the government regarding energy policies, climate change, minimum performance standards and energy efficiency.

In Kenya, the electrification of the transportation sector is a critical topic in the fight against climate change, especially since transport contributes to over 13% of the nation’s total greenhouse gas emissions. To further push decarbonization, EPRA issued in September 2023 the Electric Vehicle (EV) Charging and Battery Swapping Infrastructure Guidelines, which aimed at streamlining the development and operation of EV charging infrastructure in Kenya. These guidelines emphasize the importance of making EV charging facilities widely accessible, promoting the swift adoption of electric vehicles, and ensuring affordable charging rates for both EV owners and charging station operators. Furthermore, the guidelines introduce regulations for battery swapping stations, including the requirement for battery management systems to monitor and analyze battery data for safety. The guidelines also detail the tariffs for electricity supplied to EV charging and battery swapping stations, as determined and published by EPRA. They state that the same tariff shall be applicable for e-mobility and domestic charging and that charging stations and points will require separate metering arrangements to ensure that electricity consumption is accurately recorded and billed according to the specified tariffs for EV charging. These tariff guidelines followed EPRA’s earlier approval of e-mobility tariffs, with a unique subsidized tariff for charging stations. In March 2023, EPRA issued a retail electricity tariff review to update tariffs initially set in July 2018, introducing a special tariff for the e-mobility category for charging electric vehicles (paragraph 26). The newly introduced e-mobility tariff is fixed until the 2025/2026 period, at 16 Kenyan shillings per kilowatt-hour (kWh) (about 0.11 USD) for energy usage during peak hours and 8 Kenyan shillings per kWh (about 0.05 USD) during off-peak hours (for usage from 200 to 15,000 kWh in both cases). This rate excludes taxes and additional charges that consumers will incur. By 2022, Kenya was home to approximately 350 registered electric vehicles, which increased to 1350 by February 2023. EPRA plans to closely observe how this new consumer group adapts to the special tariff, using these insights to guide future regulatory decisions. This retail electricity tariff review contemplated the approval of additional tariffs and customer categories, such as (i) Bulk Tariffs to allow large consumers to buy power at bulk and retail the same to their end customers; (ii) the Time of Use tariff for small commercial customers, with a 50% discount on the energy charge; and (iii) the introduction of a new domestic customer category (with consumption between 31 and 100 kWh per month) in order to promote electric/clean cooking and energy transition in support of climate change mitigation and related initiatives. EPRA was unable at this stage to provide a specific tariff to the domestic category, given that the e-cooking industry is in nascent stages and there is insufficient data to model an accurate tariff. The government has set the goal to reach universal clean cooking by 2028, for which EPRA, with a specific mandate regarding energy efficiency, must set the regulatory framework to achieve the government’s policy and objectives.

Energy Sector Data Management

One challenge on the path to environmental sustainability and decarbonization is the acquisition and management of relevant data. EPRA, despite having an explicit mandate for energy sector data collection and management, has encountered some struggles due to the lack of complete digitalization of the energy sector. For effective monitoring of environmental outcomes and tracking decarbonization efforts, a robust system for data collection and analysis is crucial. While gathering data on the supply side, as well as understanding the broader demand and supply dynamics is relatively straightforward, the real difficulty lies in obtaining detailed usage and activity data. This is particularly true for areas not connected to the grid, mainly consuming biomass or biofuels. To address this, the implementation of advanced data management systems, including the deployment of smart meters and the digitization of the energy system, is essential. Such technology would enable a clearer understanding of household energy use, pinpointing where more targeted actions are necessary for reducing fossil fuel dependency and enhancing electricity efficiency. The regulator indicated that it would be desirable to have further peer to peer exchanges and support in terms of data management through shared frameworks, guidelines and best practices designed to initiate and track the progress of the energy transition.

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CRE’s Role in Fostering Innovation within France's Energy Sector through Regulatory Sandboxes (France)

Enabling regulatory change through regulatory sandboxes (Italy)

Getting government support for electricity tariffs that promote electrification (Ontario)

Addressing carbon content in solar PV procurement (France)

Changes in transmission permitting — Becoming more deeply involved in transmission line siting (Germany)

Dealing with a loss of gas customers- Addressing implications of electrification: gas disconnection policy (Australia)

Efficiency Mandates and Externalities Internalization: Shaping Renewable Energy through Regulatory Insight, Policy, Legal and Regulatory Adaptation (Mexico)

Interpreting new requirements to consider decarbonization in regulatory decision making (Australia)

Balancing Growth and Grid Stability: Revising Solar PV Installation Limits and Pricing in Saint Lucia's Transition to Renewable Energy (Saint Lucia)

Progressive Hydrogen Initiatives and Regulatory Framework Development to Advance Decarbonization (France)

EPRA's Regulatory Innovations Fueling Renewable Adoption and EV Infrastructure (Kenya)

Regulatory Initiatives for Enhanced Grid Flexibility: Setting Tariffs and Frameworks for Electricity Storage in Barbados

Strengthening Grenada's Resilience: Transitioning to Renewable Energy Amidst Climate Challenges (Grenada)

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Planning requirements — Requiring utilities to model a decarbonized future (Michigan)

Barbados

Regulatory Initiatives for Enhanced Grid Flexibility: Setting Tariffs and Frameworks for Electricity Storage in Barbados

In Barbados, the Fair Trading Commission (FTC) plays a pivotal role in enhancing the energy system’s flexibility as the island transitions to renewable energy. Through strategic decisions, such as setting energy storage tariffs and frameworks for a four-year pilot project and approving incorporation of storage recovery costs, the FTC aims to assess storage systems’ performance and their grid contribution. In alignment with Barbados’ goal of becoming a 100% renewable energy and carbon-neutral island by 2030, the FTC seeks to ensure efficient, fair energy market operations and foster sustainable energy solutions.

Themes

How regulators are creatively addressing decarbonization
Importance of government-regulator relationships

Main Findings

An effective government-regulator relationship is vital
Regulators are creatively addressing decarbonization

Recommendations

For Government: More resources
For Regulators: Advise governments on practical implications
For Regulators: Anticipate the low-carbon future in their decisions
For Regulators: Reform regulatory processes

Key Insights

Application of decarbonization criteria in recent decisions

Where Barbados
Who Fair Trading Commission of Barbados (FTC)
Link Organization https://www.ftc.gov.bb
Legal System Common Law
Type of Solution Policy Development and Implementation
Technology Adoption and Integration
Economic and Financial Mechanisms
Public and Stakeholder Engagement

Context — Problem/Issue

Barbados, as other Caribbean islands, faces significant climate challenges, including rising sea levels, more intense tropical storms, and shifting rainfall patterns that threaten vital sectors, like tourism. Barbados is exposed to volatility of energy prices due to its important reliance on imported fossil fuel products for electricity generation, with renewable energy sources accounting for only 7% (mainly solar) of total electricity generation. Renewable energy sources represent 5% of total energy supply (mostly bioenergy and solar) and 19% of installed capacity.

The government launched the Barbados National Energy Policy (BNEP) 2019 – 2030, aiming to transform Barbados into a 100% renewable energy and carbon-neutral island by 2030. This ambitious goal underscores the importance of energy system flexibility in Barbados, as the policy seeks to provide reliable, affordable and sustainable energy services. The transition involves diversifying energy sources, maximizing local participation (individual and corporate) in distributed renewable energy generation and storage, and enhancing energy efficiency across various sectors. The policy is a comprehensive approach to address the supply and consumption of energy, reflecting a collaborative effort involving extensive stakeholder engagement. The BNEP considers utilizing a mix of renewable energy technologies, including 205 megawatts (MW) of centralized solar photovoltaic, 105 MW of distributed solar photovoltaic, 105 MW of both onshore and offshore wind, and 200 MW of energy storage technologies, with an estimated cost of $4.4 billion BDS. Market participants interested in deploying these renewable energy resources must obtain specific permits for generation, storage, transmission, distribution, dispatch and sale, as required by the Electric Light and Power (Amendment) Act, 2019. The Government of Barbados has additionally embraced an aggressive decarbonization approach in its 2021 Integrated Resource and Resiliency Plan (IRRP), outlining yearly renewable energy technology investment allocations to shift toward a purely renewable energy based power system.

The Fair Trading Commission (FTC) of Barbados has a critical role in overseeing utilities and ensuring fair practices within the energy sector, particularly as the country transitions toward renewable energy. It regulates utility rates, monitors competition and addresses consumer complaints, ensuring that the energy market operates efficiently and fairly for all stakeholders. This regulatory oversight is crucial for implementing the Barbados National Energy Policy’s objectives, focusing on sustainability, affordability and energy independence.

To increase energy system flexibility and provide further security of supply and grid stability, the government has estimated in the BNEP the necessity for substantial investment in about 200 MW of storage capacity (centralized and distributed). To implement this, after holding a public consultation, in June 2023 the FTC issued the Decision on Energy Storage Framework and Tariffs, which outlines Barbados’ strategic approach for integrating energy storage to facilitate a 100% renewable energy powered economy by 2030. This decision sets out the Commission’s determination of a framework for and energy storage tariffs on a four-year pilot project, pursuant to its powers to assess energy storage systems’ (ESS) performance on the grid. It introduces tariffs for energy storage systems across various size categories and details the FTC’s role in tariff determination and procurement. The decision also outlines policy recommendations to enhance grid resilience and reliability and to reduce greenhouse gas emissions. It emphasizes the importance of energy storage in stabilizing intermittent renewable energy sources and sets a foundation for sustainable energy transition in Barbados. The four-year pilot program aims to collect data on how storage systems operate and their contribution to the electricity grid, focusing on battery energy storage systems for durations of four, three and two hours, totaling 50 MW capacity. Projects must adhere to “used and useful” criteria for eligibility for the Energy Storage Tariff (EST), a rate to be paid by utilities to storage providers for capacity and services. The proposed EST is designed to compensate and provide a fair return for pilot projects that support the grid. Insights gained from these pilots will guide the development of future energy programs. Nonetheless, granting storage licenses falls outside the FTC’s purview, renewable energy producers must apply for approval from the Minister, according to the Electric Light and Power Act (ELPA).

Additionally, in May 2023, the FTC issued the Decision on The Barbados Light & Power Company Limited Application to Establish a Clean Energy Transition Rider as a Cost Recovery Mechanism that offers a detailed review and approval of the Barbados Light & Power Company Limited’s (the vertically integrated electric utility, operating as a monopoly, regulated by the FTC, with an exclusive license to sell electricity in Barbados until 2028) proposal for a cost recovery mechanism to support its Clean Energy Transition Programme (CETP) investments, which include a 10 MW battery storage. In this decision, the FTC supports the inclusion of energy storage projects within the Clean Energy Transition Rider (CETR) mechanism for recovery costs, recognizing their role in transitioning to a fully renewable energy system. It stresses the need for a detailed cost-benefit analysis to justify the economic viability and proposed use of future energy storage projects under the CETP. The decision outlines the procedural framework for the approval of future CETP investments, including energy storage, by the FTC. It also mandates the electric utility to submit individual applications for each asset or project, detailing the cost-benefit analysis, updated rate base and expected bill impacts. The FTC’s approval process ensures that all transitionary and grid modernization costs, including those for energy storage, are prudently incurred and directly support the energy transition goals.

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Example coming soon. (Turks & Caicos)

Example coming soon. (Argentina)

Example coming soon (Azerbaijan)

Example coming soon (Bahamas)

Example coming soon. (Michigan)

Example coming soon. (Grenada)

Example coming soon. (Michigan)

Example coming soon. (British Columbia)

Example coming soon.

Example coming soon (Australia & Western Aus)

Example coming soon. (Italy)

Example coming soon. (New Mexico)

Example coming soon (United Kingdom)

Example coming soon. (British Columbia)

Example coming soon. (Michigan)

CNE's Adaptative Role in Decarbonization Efforts (Chile)

GNERC's Strategic Initiatives: Implementing a Sustainable Energy Landscape (Georgia)

Japan’s Launch of Long-Term Decarbonized Power Resource Auctions (Japan)

New Mexico’s Regulator Ensuring a Just Transition Through Energy Transition Bonds (New Mexico)

EgyptERA’s Strategic Initiatives Paving the Way for Renewable Energy and Efficiency

Responding to a broader regulatory mandate (United Kingdom)

Assessing ratepayer funding of a hybrid heating program (Canada, Québec)

CRE’s Role in Fostering Innovation within France's Energy Sector through Regulatory Sandboxes (France)

Enabling regulatory change through regulatory sandboxes (Italy)

Getting government support for electricity tariffs that promote electrification (Ontario)

Addressing carbon content in solar PV procurement (France)

Changes in transmission permitting — Becoming more deeply involved in transmission line siting (Germany)

Dealing with a loss of gas customers- Addressing implications of electrification: gas disconnection policy (Australia)

Efficiency Mandates and Externalities Internalization: Shaping Renewable Energy through Regulatory Insight, Policy, Legal and Regulatory Adaptation (Mexico)

Interpreting new requirements to consider decarbonization in regulatory decision making (Australia)

Balancing Growth and Grid Stability: Revising Solar PV Installation Limits and Pricing in Saint Lucia's Transition to Renewable Energy (Saint Lucia)

Progressive Hydrogen Initiatives and Regulatory Framework Development to Advance Decarbonization (France)

EPRA's Regulatory Innovations Fueling Renewable Adoption and EV Infrastructure (Kenya)

Regulatory Initiatives for Enhanced Grid Flexibility: Setting Tariffs and Frameworks for Electricity Storage in Barbados

Strengthening Grenada's Resilience: Transitioning to Renewable Energy Amidst Climate Challenges (Grenada)

Enhancing Regulatory Capabilities: URE's Role and Challenges in Poland's Decarbonization Journey (Poland)

Planning requirements — Requiring utilities to model a decarbonized future (Michigan)

Grenada 1

Strengthening Grenada's Resilience: Transitioning to Renewable Energy Amidst Climate Challenges (Grenada)

The Public Utilities Regulatory Commission (PURC) plays a crucial role in Grenada’s energy sector, focusing on promoting and ensuring sustainable adoption and use of renewable energy sources. A key aspect of its mandate is facilitating the integration of renewable energy, aiming to reduce the country’s reliance on fossil fuels and support Grenada’s commitment to increasing renewable energy capacity and reducing its carbon footprint.

Themes

Changes to the legal framework
Importance of government-regulator relationships

Main Findings

Regulators need a decarbonization mandate

Recommendations

For Government: Gather regulators’ inputs
For Regulators: Advise governments on practical implications

Key Insights

Application of decarbonization criteria in recent decisions
Appropriateness of existing legal/regulatory framework in addressing decarbonization

Where Grenada
Who Public Utilities Regulatory Commission (PURC)
Link Organization https://purc.gd
Legal System Common Law
Type of Solution Policy Development and Implementation

Context — Problem/Issue

Climate risks in Grenada, like many small island states, are particularly acute due to its geographic and economic vulnerabilities. These risks include sea-level rise, increased intensity of tropical storms and changes in precipitation patterns. Climate change poses a significant threat to Grenada’s critical sectors, including tourism and marine-based industries, impacting the entire spectrum of the nation’s economic activities.

The government of Grenada has pledged to cut its greenhouse gas emissions by 30% (from its 2010 levels) by 2025. With an electricity sector historically reliant on imported diesel fuel, the targeted addition of 27 megawatts of renewable electricity generation by 2025 is a key component of its strategy to meet the target, while enhancing energy security and reducing price volatility.

The Public Utilities Regulatory Commission (PURC), serving as the electricity sector’s independent regulatory body, is tasked with promoting and ensuring the sustainable adoption and use of renewable energy sources and aims to reduce the country’s reliance on fossil fuels. It was established by the PURC Act No. 20 of 2016 and launched in July 2019. The PURC sets and reviews tariffs for public utilities, handles consumer complaints, and oversees the procurement for generation, transmission and distribution systems, with a focus on facilitating renewable energy. Additionally, the PURC makes recommendations to the Minister on licensing for renewable energy production, emphasizing the government’s intention to significantly adopt renewable energy​.

The PURC has undertaken several actions to promote the development of renewable energy in Grenada. In December 2019, the PURC published several regulations, including the Draft Generation Expansion Planning and Competitive Procurement Regulations, which outlines a comprehensive regulatory framework for the expansion of electricity generation capacity in Grenada and was established under the Electricity Supply Act of 2016, (Amendment in 2017) that emphasized the development of electricity generation projects from renewable sources. It defines the procedures for identifying, analyzing and implementing renewable energy projects, including the criteria to select projects which prioritize environmental sustainability, technical viability, and the potential to reduce reliance on imported fossil fuels. The draft regulation also establishes the requirements for biennial updates of integrated resource plans that shall take into consideration (i) every potential resource, encompassing new generation capabilities, demand-side measures (such as demand response and energy efficiency), and the phasing out of existing generation capacities; and (ii) a variety of renewable and efficient generation options, alongside a prudent diversification of the generation portfolio. The framework aims to foster the integration of renewable energy into the national grid, promoting efficiency, sustainability and a reduction in electricity costs through competitive procurement processes. This approach supports Grenada’s commitment to increase its renewable energy capacity and reduce its carbon footprint. The PURC recently undertook a consultation with renewable energy suppliers to hear suggestions as to how these regulations could be improved.

In 2023, the PURC also published a standardized net metering connection agreement, which should facilitate the connection of small scale renewable energy by customers.

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Similar Examples

Example coming soon. (Turks & Caicos)

Example coming soon. (Argentina)

Example coming soon (Azerbaijan)

Example coming soon (Bahamas)

Example coming soon. (Michigan)

Example coming soon. (Grenada)

Example coming soon. (Michigan)

Example coming soon. (British Columbia)

Example coming soon.

Example coming soon (Australia & Western Aus)

Example coming soon. (Italy)

Example coming soon. (New Mexico)

Example coming soon (United Kingdom)

Example coming soon. (British Columbia)

Example coming soon. (Michigan)

CNE's Adaptative Role in Decarbonization Efforts (Chile)

GNERC's Strategic Initiatives: Implementing a Sustainable Energy Landscape (Georgia)

Japan’s Launch of Long-Term Decarbonized Power Resource Auctions (Japan)

New Mexico’s Regulator Ensuring a Just Transition Through Energy Transition Bonds (New Mexico)

EgyptERA’s Strategic Initiatives Paving the Way for Renewable Energy and Efficiency

Responding to a broader regulatory mandate (United Kingdom)

Assessing ratepayer funding of a hybrid heating program (Canada, Québec)

CRE’s Role in Fostering Innovation within France's Energy Sector through Regulatory Sandboxes (France)

Enabling regulatory change through regulatory sandboxes (Italy)

Getting government support for electricity tariffs that promote electrification (Ontario)

Addressing carbon content in solar PV procurement (France)

Changes in transmission permitting — Becoming more deeply involved in transmission line siting (Germany)

Dealing with a loss of gas customers- Addressing implications of electrification: gas disconnection policy (Australia)

Efficiency Mandates and Externalities Internalization: Shaping Renewable Energy through Regulatory Insight, Policy, Legal and Regulatory Adaptation (Mexico)

Interpreting new requirements to consider decarbonization in regulatory decision making (Australia)

Balancing Growth and Grid Stability: Revising Solar PV Installation Limits and Pricing in Saint Lucia's Transition to Renewable Energy (Saint Lucia)

Progressive Hydrogen Initiatives and Regulatory Framework Development to Advance Decarbonization (France)

EPRA's Regulatory Innovations Fueling Renewable Adoption and EV Infrastructure (Kenya)

Regulatory Initiatives for Enhanced Grid Flexibility: Setting Tariffs and Frameworks for Electricity Storage in Barbados

Strengthening Grenada's Resilience: Transitioning to Renewable Energy Amidst Climate Challenges (Grenada)

Enhancing Regulatory Capabilities: URE's Role and Challenges in Poland's Decarbonization Journey (Poland)

Planning requirements — Requiring utilities to model a decarbonized future (Michigan)

Poland

Enhancing Regulatory Capabilities: URE's Role and Challenges in Poland's Decarbonization Journey (Poland)

Poland is steering its energy sector towards sustainability and diversification, underpinned by forward looking energy policy and EU alignment. This transition includes significant renewable energy adoption, particularly solar photovoltaic and wind, with ambitious goals for reducing coal dependency. The Urząd Regulacji Energetyki (URE) plays a pivotal role in regulating this shift by overseeing market compliance and fostering renewable energy integration and an efficient grid expansion. Recent legislative changes aim to address energy pricing and market structure, enhancing URE’s regulatory capacity amidst a growing workload and funding challenges.

Themes

Acceleration of regulatory processes to advance decarbonization
Changes to the legal framework
How regulators are creatively addressing decarbonization
Importance of government-regulator relationships

Main Findings

An effective government-regulator relationship is vital
Regulators need a decarbonization mandate
The regulatory handbrake on investment must be released

Recommendations

For Government: A decarbonization objective in legislation
For Government: More resources
For Regulators: Advise governments on practical implications
For Regulators: Reform regulatory processes

Key Insights

Application of decarbonization criteria in recent decisions

Where Poland
Who Energy Regulatory Office (URE)
Link Organization https://www.ure.gov.pl/en/
Legal System Civil Law
Type of Solution Policy Development and Implementation
Technology Adoption and Integration
Economic and Financial Mechanisms

Context — Problem/Issue

Poland’s energy sector, traditionally reliant on coal, is experiencing a dynamic shift toward decarbonization and energy diversification. The country is increasingly embracing renewable energy sources to meet EU climate goals and enhance energy security. In February 2021, Poland’s government approved the Energy Policy of Poland until 2040 (EPP2040), aligned with EU standards and the National Energy and Climate Plan (2021-2030), which outlined a comprehensive strategy for the nation’s energy transformation, emphasizing renewable energy expansion, energy security and economic sustainability. By 2030, the projected capacity of renewable energy electricity generation in Poland is expected to reach 23-25 gigawatts (GW), effectively doubling the capacity from 2020. Significant growth is anticipated in offshore wind development, with capacity expected to hit 5.9 GW by 2030 and approximately 11 GW by 2040.

Recent legal and regulatory changes have also affected the functions of the URE. The URE’s full powers are dispersed across various national legislations, each addressing different market segments (including the Energy Law Act and the Act on Renewable Energy Sources from 2015 — amended). Amendments in 2021 brought substantial updates to the regulatory framework, enhancing URE’s powers and the oversight of electricity and gas markets, especially focusing on the regulation of gas transmission infrastructure. Additionally, an extensive update to the Energy Law Act made it easier for larger users to connect directly to the transmission systems. Efforts are underway to create a regulatory framework for Poland’s hydrogen market operation, marking crucial steps toward modernizing the energy sector and incorporating new alternative fuels and energy systems. Amendments to the Electromobility Act in June 2022 granted the URE new powers related to charging station operations and introducing definitions for low-emission and renewable hydrogen.

The regulator has a role in managing the rapid increase in distributed solar photovoltaic power that has occurred in recent years. In 2021, Poland emerged as the fourth fastest-growing solar market in Europe, with 3.2 GW of newly installed capacity,[1]  surpassing countries like France, Italy and Greece in photovoltaic expansion. In 2022, settlement methods for prosumer-generated electricity shifted significantly from net-metering to net-billing, impacting how surplus energy is compensated. This change emphasizes the importance of self-consumption and introduces dynamic tariffs, which URE is now in charge of monitoring. Challenges in integrating micro-installations into the national grid have pushed recent regulatory adjustments to enhance system flexibility and improve network management and automation processes.

In 2023, URE organized and conducted renewable auctions for a total of 88 TWh of green energy offered, however, only about 6 TWh (6.8%) was contracted, due to further interest in long-term corporate power purchase agreements (cPPAs), which are emerging as a compelling option compared to the auction-based support scheme. Most of the awards were for solar photovoltaic (98%) and wind farms, all greenfields. Furthermore, capacity procured in auctions fell to 738 MW in 2022 and further to 618 MW in 2023.

URE’s mandate includes the approval of network codes for transmission and distribution systems, storage facilities and liquified natural gas facilities, as well as formulating guidelines and recommendations to harmonize the development strategies of natural gas and electric power transmission and distribution firms. With renewable energy source expansion, intensive transmission investment is needed to ensure proper grid development. To tackle these challenges, the URE had the initiative to develop, with the five largest electricity distributors in Poland, a work program to design a common agreement of the sectoral regulator and the distribution sector known as the Charter for the Efficient Transformation of Poland’s Power Distribution Networks, which was signed in November 2022. The Charter provides the comprehensive digitalization of the electricity grid and its adaptation to the rapidly growing number of renewable energy sources. It covers several key areas of the grid expansion, including direct lines, cable pooling, hybrid energy storage installations, easier connection for storage facilities, allowing renewable energy source installations to exceed connection capacity, and cost-sharing for connecting renewable energy sources to the grid. Its adoption is expected to significantly boost renewable energy, aiming to expand renewable energy source capacity to 50 GW by 2030 and achieve a 50% renewable share in the energy mix.

The URE has, nonetheless, expressed in its 2023 National Report that the expansion of regulatory responsibilities and a swiftly evolving market have led to a marked increase in workload at the URE, evidenced by a nearly 40% rise in administrative decisions in 2022 compared to the year before. Securing the necessary funding for these expanded tasks, however, has become increasingly challenging.

[1] The country saw a dramatic rise in prosumer energy (micro-installations of no more than 50 kilowatts), with installed capacity increasing from 0.35 GW in 2018 to over 9.3 GW in 2022 and a total electricity production of nearly 5.8 terawatt-hours (TWh) for 2022. Prosumers increased from 51,000 to over 1.2 million (mostly solar photovoltaic) in 2022.

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Similar Examples

Example coming soon. (Turks & Caicos)

Example coming soon. (Argentina)

Example coming soon (Azerbaijan)

Example coming soon (Bahamas)

Example coming soon. (Michigan)

Example coming soon. (Grenada)

Example coming soon. (Michigan)

Example coming soon. (British Columbia)

Example coming soon.

Example coming soon (Australia & Western Aus)

Example coming soon. (Italy)

Example coming soon. (New Mexico)

Example coming soon (United Kingdom)

Example coming soon. (British Columbia)

Example coming soon. (Michigan)

CNE's Adaptative Role in Decarbonization Efforts (Chile)

GNERC's Strategic Initiatives: Implementing a Sustainable Energy Landscape (Georgia)

Japan’s Launch of Long-Term Decarbonized Power Resource Auctions (Japan)

New Mexico’s Regulator Ensuring a Just Transition Through Energy Transition Bonds (New Mexico)

EgyptERA’s Strategic Initiatives Paving the Way for Renewable Energy and Efficiency

Responding to a broader regulatory mandate (United Kingdom)

Assessing ratepayer funding of a hybrid heating program (Canada, Québec)

CRE’s Role in Fostering Innovation within France's Energy Sector through Regulatory Sandboxes (France)

Enabling regulatory change through regulatory sandboxes (Italy)

Getting government support for electricity tariffs that promote electrification (Ontario)

Addressing carbon content in solar PV procurement (France)

Changes in transmission permitting — Becoming more deeply involved in transmission line siting (Germany)

Dealing with a loss of gas customers- Addressing implications of electrification: gas disconnection policy (Australia)

Efficiency Mandates and Externalities Internalization: Shaping Renewable Energy through Regulatory Insight, Policy, Legal and Regulatory Adaptation (Mexico)

Interpreting new requirements to consider decarbonization in regulatory decision making (Australia)

Balancing Growth and Grid Stability: Revising Solar PV Installation Limits and Pricing in Saint Lucia's Transition to Renewable Energy (Saint Lucia)

Progressive Hydrogen Initiatives and Regulatory Framework Development to Advance Decarbonization (France)

EPRA's Regulatory Innovations Fueling Renewable Adoption and EV Infrastructure (Kenya)

Regulatory Initiatives for Enhanced Grid Flexibility: Setting Tariffs and Frameworks for Electricity Storage in Barbados

Strengthening Grenada's Resilience: Transitioning to Renewable Energy Amidst Climate Challenges (Grenada)

Enhancing Regulatory Capabilities: URE's Role and Challenges in Poland's Decarbonization Journey (Poland)

Planning requirements — Requiring utilities to model a decarbonized future (Michigan)

Michigan 1

Planning requirements — Requiring utilities to model a decarbonized future (Michigan)

Michigan mandates its regulated electric utilities to present an integrated resource plan to the Michigan Public Service Commission (MPSC). These plans must incorporate various scenarios, including an environmental policy scenario that assesses the impacts of accelerating decarbonization on system reliability, emissions, financial requirements and risks. The inclusion of this scenario in planning has highlighted the environmental and economic advantages of earlier coal plant retirements. The MPSC’s approval of plans featuring early closures, challenged but upheld in court, demonstrates a proactive regulatory strategy to quantify and understand the trade-offs involved in moving toward a cleaner power system.

Themes

How regulators are creatively addressing decarbonization

Main Findings

Regulators are creatively addressing decarbonization

Recommendations

For Government: A carbon price
For Government: Gather regulators’ inputs
For Regulators: Anticipate the low-carbon future in their decisions
For Regulators: Reform regulatory processes

Key Insights

Application of decarbonization criteria in recent decisions

Where United States, Michigan
Who Michigan Public Service Commission (MPSC)
Link Organization https://www.michigan.gov/mpsc
Legal System Common Law
Type of Solution Policy Development and Implementation
Public and Stakeholder Engagement

Context — Problem/Issue

Michigan law requires regulated electric utilities to submit to the regulator an integrated resource plan. The plan’s filing requirements, which are developed and approved by the Michigan Public Service Commission (MPSC), include an obligation for the regulated utilities (in the more populated part of the state) to undertake a series of scenarios. One of these scenarios, the environmental policy scenario, examines the implications of moving more quickly than current policy requires to decarbonize the power system. It includes an assessment of the scenario’s impact on reliability, emissions and annual revenue requirements and a risk assessment for each scenario modeled. The advantage of including the scenario in the required plan is to assist the regulator in understanding the costs and benefits of moving more quickly to a decarbonized system by presenting a quantification of these costs and benefits.

The requirement to develop the scenario led to analyses that demonstrated that closing a coal plant earlier than planned would have both environmental and economic benefits. The MPSC approved a plan that was negotiated with stakeholders for which the early closing was included as part of the environmental policy scenario. The MPSC’s ruling was challenged by another utility but upheld by the courts.

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Similar Examples

Example coming soon. (Turks & Caicos)

Example coming soon. (Argentina)

Example coming soon (Azerbaijan)

Example coming soon (Bahamas)

Example coming soon. (Michigan)

Example coming soon. (Grenada)

Example coming soon. (Michigan)

Example coming soon. (British Columbia)

Example coming soon.

Example coming soon (Australia & Western Aus)

Example coming soon. (Italy)

Example coming soon. (New Mexico)

Example coming soon (United Kingdom)

Example coming soon. (British Columbia)

Example coming soon. (Michigan)

CNE's Adaptative Role in Decarbonization Efforts (Chile)

GNERC's Strategic Initiatives: Implementing a Sustainable Energy Landscape (Georgia)

Japan’s Launch of Long-Term Decarbonized Power Resource Auctions (Japan)

New Mexico’s Regulator Ensuring a Just Transition Through Energy Transition Bonds (New Mexico)

EgyptERA’s Strategic Initiatives Paving the Way for Renewable Energy and Efficiency

Responding to a broader regulatory mandate (United Kingdom)

Assessing ratepayer funding of a hybrid heating program (Canada, Québec)

CRE’s Role in Fostering Innovation within France's Energy Sector through Regulatory Sandboxes (France)

Enabling regulatory change through regulatory sandboxes (Italy)

Getting government support for electricity tariffs that promote electrification (Ontario)

Addressing carbon content in solar PV procurement (France)

Changes in transmission permitting — Becoming more deeply involved in transmission line siting (Germany)

Dealing with a loss of gas customers- Addressing implications of electrification: gas disconnection policy (Australia)

Efficiency Mandates and Externalities Internalization: Shaping Renewable Energy through Regulatory Insight, Policy, Legal and Regulatory Adaptation (Mexico)

Interpreting new requirements to consider decarbonization in regulatory decision making (Australia)

Balancing Growth and Grid Stability: Revising Solar PV Installation Limits and Pricing in Saint Lucia's Transition to Renewable Energy (Saint Lucia)

Progressive Hydrogen Initiatives and Regulatory Framework Development to Advance Decarbonization (France)

EPRA's Regulatory Innovations Fueling Renewable Adoption and EV Infrastructure (Kenya)

Regulatory Initiatives for Enhanced Grid Flexibility: Setting Tariffs and Frameworks for Electricity Storage in Barbados

Strengthening Grenada's Resilience: Transitioning to Renewable Energy Amidst Climate Challenges (Grenada)

Enhancing Regulatory Capabilities: URE's Role and Challenges in Poland's Decarbonization Journey (Poland)

Planning requirements — Requiring utilities to model a decarbonized future (Michigan)