This paper identifies key sources of policy uncertainty which can adversely affect investment in the electric power industry, covering both generation and network assets. We focus on asymmetric, systematic, non-diversifiable risk with spin-offs. In generation, a key uncertainty is the inability...

Driven by fear of underinvestment in network assets, merchant investment in electricity transmission networks (MTI) is now legally allowed. Given that MTI is a real possibility, regulators face a new set of questions. After classifying different types of MTI, the paper raises and analyses...