Paper No. 3 Economic Regulation

Economic Regulation and the Development of Integrated Energy Systems

This paper presents QUEST’s position on the key role of economic regulation in facilitating the implementation of integrated energy systems. The paper describes the strength of integrated energy systems as bringing together multiple energy system components which are integrated in physical, financial and operational terms. It makes the case for proper regulatory oversight of energy systems in order to provide neutral, transparent and expert oversight and consequent protection for both consumers and investors. The paper argues that integrated energy systems are much more likely to be feasible if the regulatory system is prepared to accept some re-bundling, specifically of delivery and energy generation and experimentation to facilitate innovation.