Roadmap to a Low Carbon Electricity System in the U.S. and Europe

This executive summary from the Climate Policy Initiative outlines the structural and financial barriers hindering the transition to low-carbon electricity systems in the U.S. and Europe. It argues that current business models for investor-owned utilities and independent power producers are ill-suited for renewable energy and proposes a comprehensive evolution across generation, transmission, market operation, distribution, and customer management to reduce costs and improve system reliability.

• Existing financing models for renewable energy are inefficient and increase costs by up to 20% compared to models tailored to the specific risk profiles of renewable projects and the needs of municipalities and institutional investors.
• The current regulatory and business models of independent power producers (IPPsC) and investor owned utilities (IOUs) are poorly adapted for the low-carbon transition because they were primarily developed for competitive fossil fuel generation markets.
• To achieve a low-cost, secure, and clean electricity system, five key industry segments must evolve: generation must reduce financing costs and focus conventional plants on grid flexibility; transmission must improve renewable integration and consolidate to balance resources; market operations must value flexibility services; distribution must adapt to distributed generation; and customer management must integrate demand response and electrification, such as electric vehicle charging.
• Emerging financing models like YieldCos can lower costs by providing investors with secure cash flows and the liquidity of exchange-traded stocks and bonds, though they require further optimization to reach their full potential.

APA

Climate Policy Initiative (2014). Roadmap to a Low Carbon Electricity System in the U.S. and Europe. https://www.climatepolicyinitiative.org/wp-content/uploads/2014/06/Roadmap-to-a-Low-Carbon-Electricity-System-Executive-Summary1.pdf

Chicago

Climate Policy Initiative. Roadmap to a Low Carbon Electricity System in the U.S. and Europe. 2014. https://www.climatepolicyinitiative.org/wp-content/uploads/2014/06/Roadmap-to-a-Low-Carbon-Electricity-System-Executive-Summary1.pdf.

Wikipedia

{{cite report |author=Climate Policy Initiative |title=Roadmap to a Low Carbon Electricity System in the U.S. and Europe |date=May 2014 |url=https://www.climatepolicyinitiative.org/wp-content/uploads/2014/06/Roadmap-to-a-Low-Carbon-Electricity-System-Executive-Summary1.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{climatepolicyinitiative2014roadmap, author = {{Climate Policy Initiative}}, title = {{Roadmap to a Low Carbon Electricity System in the U.S. and Europe}}, institution = {Climate Policy Initiative}, year = {2014}, month = may, url = {https://www.climatepolicyinitiative.org/wp-content/uploads/2014/06/Roadmap-to-a-Low-Carbon-Electricity-System-Executive-Summary1.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }