This paper presents a new theoretical approach to design a polycentric electricity sector. The study focuses on Lebanon and its electricity sector, and tries to reform the sector using a proposed polycentric structure. The study utilises the polycentric indicators and general structure, along with organisational modes, and electricity market design variables to come up with a standardised stepwise model, i.e. “Polycentric Market Design Framework”, to design a polycentric hybrid electricity sector. This is followed by applying it to the Lebanese case.