Electricity Markets and Policy

A Design for Good project to support Arizona State University to study regulations, policies and areas of opportunity for utility business model. Sponsored by Arizona State University

Electricity Markets and Policy

The objective of this project was to support the Laboratory for Energy and Power Solutions (LEAPS) at Arizona State University (ASU) to study regulations, policies, and areas of opportunity for utility business model change. The research focused on electricity markets in lower-middle-income and selected low- and upper-middle-income countries to liberalize existing electrical utilities.

The first task involved performing a strategic electricity market review to develop a country repository and document database covering 30+ attributes for 73 countries along with 300+ resource/reference documents.

Simultaneously, a preliminary metric framework for assessing the candidature of countries surveyed for utility business model change was developed. The metrics were chosen to holistically capture and gauge countries’ potential for effective business model change intervention. Lastly, opportunities for LEAPS to collaborate with international agencies and other academia/industry-based laboratories, along with potential funding streams, were identified to best leverage the lab’s expertise in global energy access and grid modernization projects.

It was found that electricity markets in lower-middle countries around the world are predominantly modeled along vertically integrated structures under state control. The resultant lack of competition results in stifled innovation, monopolization, higher costs, and restricted consumer choice. Liberalization of the electricity markets is recommended as it promotes private sector participation and increases operational efficiency, leading to greater energy security, affordability, and end-user agency.

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