Electricity network investments and the regulatory framework

• Robert Schuman Centre for Advanced Studies
• FSR: Florence School of Regulation

This debate will discuss how the regulatory framework might support the additional massive investments required in electricity networks over the next decades, by providing the appropriate incentives, manage risk effectively, continue to attract investors to the sector and protect present and future consumers.

The energy transition, to achieve the ambitious energy and climate policy targets that the EU committed to, requires massive investments in electricity networks. For investments at transmission level and for smart grids, EU legislation envisages a framework for identifying and promoting the projects of greatest importance for the integration of the Internal Electricity Market. However, a similar framework is not in place for distribution grids more generally. Moreover, the pace of the transformation of the electricity sector landscape calls for anticipatory investments.

In this context, a relevant issue is who is best placed to take the risk on investments against a still uncertain future: the electricity network undertakings or consumers, through the regulatory framework?