Energy efficiency in developing countries: Roles for sector regulators

In addition to implementing Renewable Energy (RE) initiatives, sector regulators also have roles to play in promoting Energy Efficiency since EE can be expanded via utility actions (incentivized and monitored by the regulator) and actions by other agencies. The former include reduced line losses, improvements in load patterns and system reliability, decision-relevant customer billing information, energy audits, and smart grids. The adequacy and cost-effectiveness of utility programs clearly fall under regulatory oversight. Other agencies set appliance standards and provide government financial support. The sector regulator must then factor in the interdependencies among EE programs when determining the cost-effectiveness of utility-based programs. EE promotes energy conservation, so such programs impact utility revenues and costs (directly through changes in consumption and production patterns and in program costs). These impacts mean that the energy sector regulator can promote or block some EE initiatives carried out by the electric utilities.