Excessive Regulatory Regime

Numerous projects that employ low carbon and renewable technologies face an uphill battle in a highly regulated energy sector. Being largely based on the logic of large scale centralized energy production, that favours the more conventional energy sources, the highly regulated energy sectors can create major barriers to the development of smart cities projects.

The complexity of regulations can have a disproportionately negative impact on low carbon and renewable energy projects, which tend to be smaller in scale and produce small amounts of electricity that can be sent on the grid. In addition, the access to the grid can be burdened by regulatory regimes. In some cases, the regime is inflexible with regards to the intermittent nature of the electricity generated by renewable energy sources, which in some cases can even result in financial penalties to the clean energy producers. Therefore, highly rigid and restrictive regulatory regimes can further exacerbate the cost-effectiveness problems of low carbon and renewable technologies.