Market Design and Regulations

The world's existing electricity systems were designed mainly for conventional, centralised power generation. Large plants have generated the bulk of electricity, frequently based on fossil fuels, and dispatched it to consumers based on relatively inflexible schedules. This prevalent system structure requires fundamental changes to accommodate the reduction of carbon-dioxide (CO2) emissions, the rise of decentralised power generation, and increased reliance on variable sources such as solar and wind power. However, misalignments between old and new system design can hinder the transition.

IRENA's study Adapting Market Design to High Shares of Variable Renewable Energy  identifies lessons learnt and best practices and provides recommendations on how to adapt market rules and policies to take into consideration the evolution of the power system and to efficiently support the growth of renewable energy. These adaptations concern different stakeholders, including policy makers, regulators, grid operators, utilities and consumers.


IRENA's 2020 brief Power System Organisational Structures for the Renewable Energy Era  examines the main misalignments between current power system structures, supporting policies to scale up renewables, and the essentially different requirements of a renewable-based power. Building on this report, the next report will focus on the detail of the dual procurement mechanisms, with a focus on the ownership and governance structures of the power systems.