This project looks at the role of government policy and regulation as a driver of private investment in the energy transition.

The starting point for this research is that financial returns, together with risk and uncertainty are key elements in private decisions to invest in long-term energy supply and infrastructure projects. In turn, government policies and regulations, as well as market designs, can play a decisive part in shaping the risk profile of projects.

The energy transition is an inherently uncertain process, in terms of both timing of transition, as well as the choice of pathway for specific infrastructure development options. This creates new risks for investors, which could affect investment appetite. The research will explore:

  • views from the finance sector on:
    • the risk profiles and uncertainties in the energy sector, and how these are assessed and managed;
    • the role of market and regulatory frameworks, and implications for policy design;
  • views from policy makers on:
    • how a deeper understanding of finance and investor perspectives could help reduce delivery risk against policy goals;
    • assessment of future market & policy design options across the energy system.

While the focus of the research will be based on UK examples, the intention is for the research to also be applicable to a wider international context and have impact beyond the UK.