Regulation and Market Reform: The Essential Foundations for a Renewable Future

  • Iain WrightEmail author


Measuring renewable generation deployment in terms of megawatts installed over time, offers a somewhat restricted viewpoint from which to understand the interactions of technical, market, regulatory and economic factors that ultimately determine the success or failure of low carbon generation policy. This chapter examines some of the fundamental technical and economic differences between power systems comprising renewable and conventional technologies and why these necessitate economic, as well as regulatory, interventions in order to provide a viable investment environment for new capacity. Measures to mitigate the impact of capacity duplication on conventional generation, required to maintain power system reliability, are also considered in this context. The validity of this analysis is demonstrated through a review of the very different Russian and US markets, where both financial support and market reform are shown to be essential for successful deployment of renewables whereas neither, on its own, is sufficient.


Regulation Market reform Renewable generation Low carbon generation policy Power systems 


  1. Association NP Market Council. 2019. About the Electricity Industry—General Information.
  2. ATS Energo. 2019. News Feed.
  3. Baumol, W.J., Panzar, J.C. and Willig, R.D. 1982. Contestable Markets and the Theory of Industry Structure. Harcourt Brace Jovanovich Inc.Google Scholar
  4. Boiteux, M. 1949. La tarification des demandes en pointe: Application de la théorie de la vente au coût marginal. Revue Générale de l’Électricité.Google Scholar
  5. Boiteux, M. 1957. The Role of Amortization in Investment Planning. International Economic Papers 10: 161–162 (translated from Revue de Recherche Opérationelle).Google Scholar
  6. Commission for Energy Regulation. 2004. Wind Generator Connection Policy, Direction by the Commission for Energy Regulation. CER/04/245.Google Scholar
  7. Energy Information Administration (EIA). 2018. US Energy Mapping System—Electric Transmission System Layer.
  8. European Community. 1996. Directive 96/92/EC of the European Parliament and of the Council of 19 December 1996 Concerning Common Rules for the Internal Market in Electricity, Article 8(3).Google Scholar
  9. European Community. 2001. Directive 2001/77/EC of the European Parliament and of the Council of 27 September 2001 on the Promotion of Electricity Produced from Renewable Energy Sources in the Internal Electricity Market. Annex.Google Scholar
  10. Federal Energy Regulatory Commission. 1996. Promoting Wholesale Competition Through Open Access Non-discriminatory Transmission Services by Public Utilities; Recovery of Stranded Costs by Public Utilities and Transmitting Utilities, Order No. 888. Federal Register Vol. 61, no. 92, May 10, 1996.Google Scholar
  11. Federal Energy Regulatory Commission. 2000. Regional Transmission Organizations, Order No. 2000 Federal Register Vol. 65, no. 4, January 6, 2000, p. 810.Google Scholar
  12. International Renewable Energy Agency (IRENA). 2018. Renewable Energy Prospects for the Russian Federation (REmap Working Paper): April 2018.
  13. Ó Gallachóir, G. 2004. The Grid Connection Moratorium in Ireland. Proceedings of the European Wind Energy Conference 2004, Figure 1, November 22–25, London.Google Scholar
  14. Public Joint Stock Company Federal Grid Company of the Unified Energy System. 2002. Reforming of Electric Power Industry in the Russian Federation, Annual Report for 2002.Google Scholar
  15. Public Joint Stock Company Federal Grid Company of the Unified Energy System. 2017. Market Review: Annual Financial Report for the Year 2017.Google Scholar
  16. Renewables Now. 2012. China’s 22.5-GW Three Gorges Dam Reaches Full Capacity, July 5, 2012.
  17. Rosstat. 2018. Population. Russian Statistical Yearbook,
  18. RusHydro. 2018a. Hydrogeneration.
  19. RusHydro. 2018b. Investor Presentation: Renaissance Capital 22nd Annual Russia Investor Conference, April 10–11, 2018.
  20. Turvey, R. 1968. Optimal Pricing and Investment in Electricity Supply; An Essay in Applied Welfare Economics. George Allen and Unwin Ltd.Google Scholar
  21. United Kingdom Government. 1983. Energy Act 1983.Google Scholar
  22. United States Census Bureau. 2018. US and World Population Clock.
  23. United States Energy Department. 1992. Renewable Electricity Production Tax Credit (PTC).
  24. Wengle, S.A. 2011. Post-Soviet Developmentalism and the Political Economy of Russia’s Electricity Sector Liberalization. Scholar
  25. World Bank. 2017a. World Development Indicators.
  26. World Bank. 2017b. World Development Indicators.

Copyright information

© The Author(s) 2020

Authors and Affiliations

  1. 1.Adam Smith Business SchoolUniversity of GlasgowGlasgowUK

Personalised recommendations