Profound Change in the Power Sector

Since a couple of years, new actors and new modes of operation, driven by technology and business innovations and policies are increasingly entering the power sector, pivoting in industrialized countries. These innovations challenge the customary hierarchies, reverting energy flows  and imposing new operational modes,  and provoke new  business models.  This has profound consequences for the institutional arrangements.

In consequence, international cooperation is well advised to assess the  consequences of the ongoing changes in the power sector   for  its energy sector strategies which are  closely related to environment and climate matters. 

The present paper was drafted  for GIZ GmbH, the German Corporation for International Cooperation, to initiate and inform the discussion on the implications of current and upcoming profound power sector changes for developing economies and the role of International cooperation.   It points out the various innovations, the profound changes and transformations of the power sector en course  in some first mover countries with mature power sectors, systemizing  the different drivers and responses as  well  the compound  impact and institutional  adaptations and changes.   It tries to give an overview of the various interdependent, mutually enforcing or counteracting developments and the responses  in industrial countries. On this basis it offers a framework and some ideas for  the discussion on institutional arrangements and  dynamics in the power sectors in developing countries n response to the technical, business and regulatory innovations, given their priorities.

A specific paper is in preparation on the observed and expected changes in dfeveloping countries, to be published by GIZ GmbH.