Establishing an efficient regulatory mechanism — Prerequisite for successful energy activities regulation

An analytic approach to determine appropriate regulatory strategies for the energy sector is proposed in
this paper.A basic model of the regulatory system in the energy sector is defined, and the regulatory
mechanism functions in this context are outlined. The basic problem of unknown factors (i.e., system
entropy) is highlighted. An original algorithm developed to analyze regulatory background context and
regulatory mechanism functions is discussed.A useful method for defining existing level of energy
activities is also presented using the Croatian regulatory framework as an example.