Effective and Independent National Regulatory Authorities


An independent and empowered regulator is better able to fulfil its duty of serving the public interest long term. This independence underpins its effective performance in regulating networks, monitoring market power, protecting consumers from unfair practices and ensuring a speedy energy transition at least cost.

NRAs (national regulatory authorities) may be hindered by a number of factors. The three most likely are:

  1. Activities are unduly influenced by regulated industry, government, politicians or outside interest groups independent of politics.
  2. Competence is constrained by a lack of resource as provided for by the government.
  3. Legislation does not provide for the appropriate powers and tools to deliver on their objectives.

Regulatory independence is attained through role clarity, leadership independence, financial independence and an ethical and independent regulatory culture. Key here is the proper resourcing and empowerment of the regulator, provided for by legislation and ideally financed by fees set by multiannual budget allocations.


Independent, resourced and empowered regulators


Establish role clarity, financial independence, independence of leadership, strong culture


National regulatory authorities


By 2025

The regulator’s typical objectives are to manage reliability, environmental and cost considerations, plus equity concerns, in the energy sector in a way that best serves the long-term public interest (see Clear Roles and Responsibilities factsheet). Environmental concerns are increasingly focused on supporting the energy transition. Duties typically encompass regulating network companies, including by mimicking market conditions to ensure reliable service at lowest cost, shaping wholesale trading arrangements to support efficiency and protecting consumers from unfair practices. The regulator in some environments may be required to regulate government entities that compete in the market with private business and provide a framework that ensures a level playing field.

The regulator’s effectiveness in fulfiling these duties draws on public confidence in the objectivity and impartiality of decisions and trust that the regulator is independent from politicians, government and regulated entities in fulfilment of its duties. Such independence can be served by:

Role clarity, responsibility and powers. This builds on clear objectives and functions of the regulator to ensure clarity of role, as well as limits to the executive´s ability to withhold powers to set tariffs or prices and review or approve contract terms with the regulated entities orto influence unduly or overturn these decisions. The effectiveness of the regulator additionally hinges on its empowerment in law in giving it the tools to succeed. Role clarity in national legislation is a key recommendation of the EC´s assessment of independence of NRAs.

Leadership independence. This hinges on conditions and processes for the appointment and dismissal of the members or head of the regulatory agency, such as selection and appointment of new board members by search committee — including well-regarded technical experts working outside government — rather than government executives, and transparency and accountability in these processes. Clear criteria communicated in advance for the selection of candidates can support this.

Financial independence. Multiannual (rather than annual) budget allocations and clearly stated sources of funding in the legislative framework are needed. Whether funded through fees or direct through the state budget, transparency and clearly defined processes and criteria in setting the budget or fee level are important. For regulators that are funded through fees, an appropriate cost-recovery mechanism is essential to set the right fee and avoid underfunding of the regulator, its capture by industry or undermining by the executive. Adequate resources are necessary to support regulatory effectiveness — for instance to ensure that a sufficient number of staff members with appropriate skills and experience can be hired — as well as autonomy in managing these resources.

Culture and staff behaviours. These may include restrictions on pre- or postemployment of professional staff to avoid a revolving door culture and conflicts of interest, which can undermine independence.

Independence must not come at the expense of accountability. Accountability builds on the regulator’s reporting requirements to the legislature on its effective exercise of powers and responsibilities, activities and outcomes and is also strengthened through an adequate appeals mechanism of the regulator’s decisions. Independence must be proved to the public through extensive transparency in decisions and deliberations, as well for public and third-party participation.

Key Recommendations

References and Further Reading


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Welcome to the Power System Blueprint!

Climate neutrality requires the full decarbonisation of the power sector. As this is one of Europe’s biggest challenges today, there is a need for speed.

The Power System Blueprint lays out how to design the regulatory context to achieve a clean, reliable, equitable and affordable European power system by 2035. The Regulatory Assistance Project (RAP) pulled together the latest insights to support regulators, NGOs, governments and anyone pursuing a decarbonised European power system.

Quick guide on how to use this website:

  • The Blueprint is a schematic of regulatory solutions linked to six important central principles.
  • In the suite of regulatory solutions (also known as factsheets), you will find comprehensive information, the most important regulatory steps and further reading.
  • You can systematically work through the whole Blueprint, only select specific solutions or start from one of the eight main barriers (see barriers menu at the bottom of the homepage). Choose your own path!

You can start exploring the Blueprint right away or read more about the context.