The International Energy Agency, the UK government and other international organisations have launched the Regulatory Energy Transition Accelerator (RETA) to accelerate and improve the regulatory capacity necessary to decarbonise energy systems.
The Regulatory Energy Transition Accelerator is a global initiative bringing together energy regulators to discuss the challenges they face and to share best practice in order to help keep the world on track for a 1.5 degree Celsius pathway. 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 host RETA’s Steering Committee, which will determine its yearly work plan.
The initiative is part of the Green Grids Initiative, or One Sun One World One Grid (GGI-OSOWOG) and has received broad support from regulators around the world. According to the IEA, 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 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 for infrastructure spending to surge to nearly $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 transition.
With the power sector shifting from relying on centralised fossil fuel power plants to large amounts of diffused resources, which are 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.