The proposes master thesis examines the failure of traditional incentive-based regulation, such as RPI-X, to effectively address the risks and attract necessary investment for national electrification plans in developing countries. As energy systems evolve with distributed energy resources and smart grid technologies, regulatory frameworks face growing challenges in managing uncertainty and maintaining efficiency. A novel approach will be proposed, combining forward-looking benchmarking, incentive-compatible contracts, and automatic adjustment mechanisms to better align regulatory practices with the realities of modern electricity distribution. Case studies from developing and developed countries will illustrate the impact of regulatory shortcomings and highlight the need for more adaptable frameworks.
