The electricity sectors around the world continue on a slow but certain transformative path. Since the 1990s, market-oriented reform models and economic regulation have reshaped the structure and organisational environment of this industry. The increasing focus on the environmental sustainability requiring the addition of new measures and policies into the sector has added to the challenges facing the sector. In addition, in response to these strong trends, technological progress has brought significant cost reductions in some technologies and innovative technical possibilities. However, these changes are increasingly challenging the existing market designs, regulatory framework, and policies while giving rise to new ones. This means that the sector's transition path constantly creates a diverse range of new issues and options that are in need of sound economic analysis. This also poses significant challenges to the sub-discipline of energy economics and policy analysis to play an important role in the coming years. The papers in this special issue are organised around economic analysis of the central questions of technology, market design, regulation and policy. The selected topics covered here are by no means exhaustive but are indicative of the extent of the challenges ahead. The hope is that this special issue will be followed by more similar initiatives.