This Power System Blueprint Deep Dive explores practice across Europe in cost recovery of selected electricity policies. It therefore looks at the “back-end” of policy design that typically receives less attention than the “front-end” design of disbursement of support itself. Policies examined are capacity remuneration mechanisms, non-fossil fuel support schemes, renewables support schemes, and energy efficiency schemes. 

Cost recovery in the electricity sector – principles and practices presents principles to guide cost recovery practice. These are efficient price formation, cost responsibility (evoking beneficiary pays and polluter pays), minimising economic distortion of residual cost recovery, and equity and consumer protection. The Deep Dive draws on these principles to offer recommendations for cost recovery of the selected policies.