Energy Market Design, Policy and Regulation
Creating the right environment to meet policy goals. Innovation and decarbonisation are changing the nature of our energy system with disruptive technologies and active consumers. AFRY Management Consulting helps clients understand how markets and policies must adapt to deliver a framework for a smart, flexible and secure energy system.
Policymakers worldwide are rising to the challenge of decarbonising energy systems by supporting new low-carbon technologies, encouraging consumers to pro-actively manage their energy consumption and promoting greater integration between national markets. Low-carbon support policies can offer new opportunities for investors, but as deployment of these less conventional technologies grows it highlights that current market designs are not future-proof. Existing regulatory frameworks and market designs do not generally deal with more decentralised, digital and dynamic systems in a cost effective and secure manner.
We are seeing the consequences of this across the sector. Capacity markets are emerging to address national government concerns over energy security, imbalance arrangements are adapting to better reflect the changing value of flexibility with penetration of renewable resources, the roles of transmission and distribution system operators are evolving to become smarter and regulation is changing to enable demand aggregation and energy storage to offer services more easily. These developments affect the value of existing business models and asset portfolios and the optimal strategies for achieving future growth.
Understanding how these market frameworks operate is nothing new for AFRY. We have a long history of engaging in such projects for our clients, from design to implementation. Our clients have been both private companies and public bodies – single customers as well as large consortia. We go beyond merely handing over reports to our clients. Instead, we also cater to their information dissemination needs by developing communication strategies, hosting events or providing expertise in legislative committee hearings.
Our broad range of expertise enables us to:
- assess how changes in market fundamentals and technologies affect current market players;
- develop future-orientated market design options;
- conduct detailed modelling of market arrangements;
- work with stakeholders to implement new market designs; and
- formulate strategies to operate within revised markets.
Finnish Energy, like many of our member companies, has repeatedly trusted on AFRY’s (former Pöyry) expertise and energy models whether it has been about future of energy, investment needs caused by legislation or outlook for fuel markets. These have contributed to developing our own operations as well as preparation and implementation of the Finnish energy policy. AFRY’s role has been crucial in the development of successful energy system.