Qasim M.A. Al-Shihani
Minister of Electricity, Iraq
Chief Executive Officer, Renewables Grid Initiative
CEO of MVM Group Hungary
Chairman of the Board of ELIA Group
Director Cambridge Economic Policy Associates Pty (CEPA Australia)
Director, Agency for the Cooperation of Energy Regulators (ACER)
Prof. Min Wang
Executive Vice President of China State Grid
How to attract investment into grids by ensuring low risk, low cost and security of supply?
Ideally, the regulatory regime is designed to incentivise low capital cost for grid infrastructure investments. Hence, investors get higher returns on a lower asset base, and customers benefit from lower overall bills. Although grid infrastructure investments are seen as “safe” assets in many countries, allowed returns are often still too high. Regulators are cautious to reduce allowed returns, as they see asymmetric risk, with underinvestment having a higher cost than setting returns too high and having over-investment in times of high availability of capital. In the session, ways to achieve a nuanced balance between regulatory requirements and the need for low burdens on the public refinancing of grids will be discussed. Policymakers will obtain state-of-the-art insight into the sensitive equilibrium that must be reached to ensure security of supply at low cost.