Concluding Thoughts—The Future of Energy Regulation in Africa

The energy sector is at a significant juncture. This is because the sector keeps evolving due to the influence of accelerating change of technology in response to increasing energy demand and the imperative need of decarbonizing production. As a result, the associated regulatory regimes that govern the sector also need to evolve to keep up with the drift. This is essential if regulators are to guarantee sustained protection of consumer and utility interests, while ensuring a stable regulatory regime that promotes confidence in the sector. A 2018 report of the World Economic Forum stipulates that the energy sector is looking forward to a dynamic future. Particularly, technologies implemented in response to demand and decarbonization will open up new frontiers for the future energy system by altering the relationship between consumers and utilities. This means that there is an urgent need to regulators to innovate and prepare for these changes. Indeed, regulators have the power to shape or adapt to industry trends. For Africa, a key enabler in the adaptation of this evolution depends on strong and effective regulatory structures. How so? Energy is one of Africa’s largest infrastructure challenges, although the continent is endowed with unexploited abundant energy sources. According to the African Development Bank, energy is the primary engine of Africa’s industrialization and growth. Therefore, access to reliable, affordable, and sustainable modern energy services is essential for Africa to fulfill its objective of industrializing the continent. Regulation of the energy sector, however, has a significant role to play in this industrialization quest. A robust and dynamic regulatory regime provides a strong foundation and support mechanism for propelling the performance of the energy sector, especially by ensuring prudent costs, investments in the sector, and provision of acceptable and reliable service quality. This indicates that a dynamic energy sector that will principally be a significant contributor to Africa’s industrialization will simultaneously require progressive and strong regulatory regimes. Given the prospect of this dynamic future of the energy sector, what needs to change in the regulation of the sector in Africa going forward? What will regulation of the energy sector in Africa entail in the future? How would regulators address the issue of the energy trilemma—the struggle of ensuring a secure and reliable energy supply, at an affordable cost, and with minimal environmental impact? How much faster will the energy ecosystem transform if underpinned by supportive regulation? How can African countries and respective country regulators leverage on regional power pools to harmonize regulation to facilitate regional power trade essential in Africa’s industrialization drive? This chapter seeks to address these questions and details the future of energy regulation within the context of some key thematic sections. We begin by summarizing the structure of the current energy regulation on the continent to provide some contextual basis of addressing gaps and weaknesses in regulatory systems including legal, regulatory, and administrative frameworks. Next, the chapter outlines the possible factors that may drive a change in the current model of regulation, with a focus on the advancement of the energy transition and related climatic concerns among others. The chapter will also argue the key strategies required in building a sustainable energy system by creating regulatory synergy between energy and the environment. Additionally, the chapter explores how Africa’s future regulatory system, through institutional mechanisms and frameworks, can play a key role in contributing to effective regional power pools. We then set out the key elements that contribute to a progressive regulatory system, vis-à-vis a dynamic energy sector. Finally, the chapter discusses how future regulatory regimes can drive innovation to support the energy transition to allow for prudent, timely, and efficient investment which will deliver sustainable, resilient, and affordable services to consumers.