Sustainable investment in electricity market reform

Electricity Market Reform (EMR) emerges to be a current concern following a shift of paradigm from its design with focuses upon energy as the key commodity to a need to deliver a sustainable low-carbon generation future. Hence, electric power developers have to consider how a regulatory regime will shape and constrain decisions related to prices, returns and other variables so as to promote credibility with investors while delivering greater efficiency for the economy as a whole. Sustainable EMR requires improved policies and more effective investment framework for attracting private capital. In the paper, we propose a two part approach, namely designing a policy framework and devising feasible market instruments for securing sustainable investment in the EMR process. The feasible options of EMR are set to illustrate the interaction of the policy instruments, the market regulation and resultant sustainable investment environment.