Why governments should take a light touch designing tomorrow's energy market

The author contends that overbearing government intervention in energy markets, exemplified by state takeovers of companies like Uniper, risks stifling the innovation needed for the energy transition. To meet the EU's Climate Action Plan goals, the text advocates for a framework that empowers private utilities to lead in building smart grids, green generation capacity, and flexibility solutions. It suggests that policy should focus on creating a stable environment for private investment and utilizing mechanisms like contracts for difference (CfDs) and power purchase agreements (PPAs) rather than direct state management of markets.

• Government over-intervention and excessive regulation threaten to impede the progress and innovation necessary for the energy transition.
• To achieve the EU's Climate Action Plan target of 80% fossil fuel-free generation by 2030, policy must prioritize increasing capacity and flexibility through specific measures: quick-starting peaker plants for green fuels, large-scale power-storage at mid-voltage levels and above, and improved distribution grid asset bases for electrification and digitization.
• Decarbonizing European energy requires significant private investment, which can be supported by trust, security, and financial instruments such as symmetrical contracts for difference (CfDs) and power purchase agreements (PPAs) to maintain market liquidity.
• Recent government actions in Germany, including the takeover of Uniper and negotiations regarding the grid operator TenneT, illustrate a trend of states taking the lead in running energy companies.

APA

Birr, T. (2023). Why governments should take a light touch designing tomorrow's energy market. World Economic Forum. https://www.weforum.org/stories/energy-transition/energy-transition-government-policy/

Chicago

Birr, Thomas. Why governments should take a light touch designing tomorrow's energy market. World Economic Forum, 2023. https://www.weforum.org/stories/energy-transition/energy-transition-government-policy/.

Wikipedia

{{cite press release |last1=Birr |first1=Thomas |title=Why governments should take a light touch designing tomorrow's energy market |publisher=World Economic Forum |date=19 June 2023 |url=https://www.weforum.org/stories/energy-transition/energy-transition-government-policy/ |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@misc{birr2023why, author = {Birr, Thomas}, title = {{Why governments should take a light touch designing tomorrow's energy market}}, publisher = {World Economic Forum}, year = {2023}, month = jun, url = {https://www.weforum.org/stories/energy-transition/energy-transition-government-policy/}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }