The International Energy Agency, along with the UK government and other international organisations, is launching an initiative to accelerate and improve the regulatory capacity necessary to decarbonise energy systems and help keep the world on track for a 1.5 C degree pathway.
The Regulatory Energy Transition Accelerator (RETA) is a global initiative bringing together energy regulators to discuss the challenges they face and to share best practices. In addition to the IEA, it includes the UK’s Office of Gas and Electricity Markets (Ofgem), the International Renewable Energy Agency (IRENA), and the World Bank. The IEA will be invited to provide the coordinating functions of the Accelerator.
The initiative has received broad support from regulators around the world, and a Joint Statement endorsed by several regulators will soon be available.
Regulators have an important role to play in clean energy transitions, both to encourage investment and to manage energy systems that increasingly rely on electricity from renewable sources. Other topics for the RETA also include renewables integration, tariff structures, electrification of transport and other sectors, and the role of low carbon fuels such as hydrogen.
The IEA’s World Energy Outlook 2021 shows that controlling global temperature increase within 1.5 °C requires investment in clean energy projects and infrastructure to surge to nearly USD 4 trillion a year by 2030. However, capital for such investments can cost up to seven times more in emerging economies than advanced economies, often because of concerns about local regulations. A stable and transparent regulatory environment can help reduce the cost of capital and increase the affordability of the clean energy transitions.
With the power sector shifting from relying on centralised fossil fuel power plants to large amounts of diffused resources, which is not available on demand, regulation is essential to ensure flexibility and capacity adequacy. Regulators also need to consider new types of energy security issues such as resilience to extreme climate events and cyberattacks.
The initiative is part of the Green Grids Initiative, or One Sun One World One Grid (GGI-OSOWOG). A launch event will be hosted by Ofgem at COP26 on 3 November at 1:30PM CET, with IEA Deputy Executive Director Mary Burce Warlick, underlining the IEA’s readiness to support the initiative.
If you’d like to listen to the RETA launch, please register here.