Rewiring electricity market design in small island developing states: Institutional reform for renewable energy in mauritius

Electricity market design plays a decisive role in shaping the trajectory of renewable energy (RE) transitions, particularly within structurally constrained contexts such as Small Island Developing States (SIDS). However, the institutional and regulatory foundations underpinning these systems in particular their capacity to support transparent and inclusive energy governance mostly remain under-analysed. This paper critically examines how vertically integrated market arrangements and weak grid governance continue to limit the pace and inclusivity of RE deployment in Mauritius, a SIDS with a national target of 60% renewable electricity by 2030. Key constraints include prolonged delays in Independent Power Producer (IPP) integration, non-transparent Power Purchase Agreement (PPA) processes, and the lack of an Independent System Operator (ISO).

Guided by two central questions, the study explores: (1) the extent to which existing market structures in Mauritius constrain RE integration and stakeholder engagement, and (2) which global reform models can inform context-specific institutional transitions at SIDS. Employing a comparative case-based methodology, the analysis combines stakeholder role-mapping with a synthesis of reform experiences from India, Kenya, Uruguay, and Germany. The findings reveal that targeted reforms including ISO-lite models, functional unbundling, and transparent procurement mechanisms can enhance investment confidence, decentralise participation, and improve regulatory accountability. The paper argues that ‘rewiring’ electricity markets in SIDS requires not only technical redesign but also a governance paradigm shift grounded in adaptive regulation and equity-oriented institutional design. The study contributes to global discourse on sustainable energy transitions by offering actionable reform pathways tailored to small island systems.