How Electricity Rates Can Finance the Energy Transition

Increasing the pace of the energy transition will require major investments in the power grid in order to produce low-carbon electricity, develop transmission and distribution networks, provide connections across borders, as well as for end uses. After recalling the basic elements of how electricity prices are determined in the wholesale and retail markets, this article presents the new regulations being put in place at the French and European levels, as well as their implications for financing the transition and the incentives that are being passed on to end consumers through electricity rates.