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Executive summary
The global transition to renewable energy stands at a critical juncture. At COP28, the G20 reaffirmed its ambitious commitment to triple global renewable energy capacity and double energy efficiency by 2030. However, while the urgency for climate-compatible energy markets is clear, systemic governance challenges across the power systems of G20 countries continue to obstruct these goals. This policy brief highlights the importance of transforming power system governance to foster transparency, inclusiveness, and fairness for renewable energy stakeholders.
Two prominent cases – Republic of Korea and Mexico – illustrate the structural challenges faced in both the Global North and South. In both countries, policy reconfigurations and entrenched near monopolies have disrupted the pace of renewable energy development, creating unfavorable market conditions for renewable energy. Mexico’s reliance on the state-owned utility, Comisión Federal de Electricidad (CFE), and Korea’s vertically integrated market under Korea Electric Power Corporation (KEPCO) have restricted renewable energy players from accessing decision-making processes and market mechanisms. This policy brief emphasizes the need for energy governance reforms in the G20 countries, including preventing conflicts of interest, establishing independent regulatory frameworks, and ensuring equitable stakeholder participation to drive renewable energy expansion.
These actionable policy recommendations urge the G20 to take leadership in:
Unbundling the power sector to prevent monopolistic practices and financial conflicts of interest.
Strengthening regulatory independence to monitor market behavior and foster fair competition between fossil fuels and renewables.
Encouraging inclusive decision-making by integrating renewable energy stakeholders into market governance structures.
These interventions are essential not only to accelerate national transitions but also to align energy policies with global commitments, including the Paris Agreement. A transparent, well-regulated energy sector will promote reliable project financing, attract investment in renewables, and reduce the risks associated with monopolistic practices.
Key findings
Structural Monopolies Stifling Renewable Growth
In Korea, KEPCO’s near monopoly over power generation and distribution limitsprivaterenewable businesses from participating in key markets and decision-making, with minimal representation for solar and wind. In Mexico, the government’s shift toward prioritizing the state-owned CFE (which in turn prioritizes fossil fuels) has slowed investments in renewable energy, undermining the country’s climate goals despite initial progress from the 2013 Energy Transition Law.
Conflicts of Interest Blocking Fair Competition
KEPCO’s financial entanglements with its subsidiaries discourage renewable energy expansion, fostering a zero-sum environment between fossil fuels and renewables. Similarly, Mexico’s energy market favors CFE, creating legal challenges and market imbalances that disadvantage renewable energy companies.
Weak Regulatory Frameworks
Both countries struggle with regulatory independence. Korea’s energy market is dominated by KEPCO, while Mexico’s regulatory body, CRE, faces political interference, compromising market transparency and fair competition.
Exclusion of Renewable Stakeholders
Korea’s energy governance marginalizes renewables, with bodies like the KPX excluding solar, wind, and storage technologies from key decision-making processes. Mexico’s focus on strengthening CFE has sidelined renewable players, further slowing the transition.
Need for G20 Leadership in Governance Reforms
To enable a fair energy transition, G20 countries must unbundle energy markets to improve transparency, strengthen independent regulatory bodies, and create inclusive governance structures where renewable players and innovative technologies have a voice.