Are electricity markets fit for the purpose of acting as a catalyst to accelerate the clean energy transition? Are they sending the right signals for the massive investments necessary in the energy sector to rapidly scale up renewable energy deployment across the world? The stakes couldn’t be higher - urgent and large-scale electrification of all energy use supported by a deep decarbonisation of the electricity sector is essential to mitigate climate change. In this article, we dive deep into the economics of the electricity sector in an attempt to find answers to above questions. We highlight the challenges renewable energy projects face and the role that electricity markets can and must play to facilitate rapid, large-scale decarbonisation of energy systems. Without going too much into technical details, we discuss some policy interventions and market adaptations in broad strokes to overcome these limitations.
@misc{ratha2025elmarketspurpose,author={Ratha, Anubhav},title={{A}re electricity markets fit for purpose?},howpublished={\url{https://anubhavratha.com/assets/pdf/2025_electricity_markets_fit_for_purpose.pdf}},year={2025},note={Non-peer-reviewed Opinion Article},}
