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Manuel Villa _Energy Transition and Energy Regulatory Sandboxes_Funseam Seminar032022

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Manuel Villa _Energy Transition and Energy Regulatory Sandboxes_Funseam Seminar032022

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This workshop will focus on how this new tool supports innovation in the energy transition and on analysing the innovative experimentation tools available and their application in Europe. A round table with regulatory authorities, companies, and research centres will provide leads on the relevance of Energy Regulatory Sandboxes to facilitate the market launch of innovations helpful to move towards a decarbonized economy. This Workshop runs as part of the European cooperation TR@NSNET project.

This workshop will focus on how this new tool supports innovation in the energy transition and on analysing the innovative experimentation tools available and their application in Europe. A round table with regulatory authorities, companies, and research centres will provide leads on the relevance of Energy Regulatory Sandboxes to facilitate the market launch of innovations helpful to move towards a decarbonized economy. This Workshop runs as part of the European cooperation TR@NSNET project.

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Manuel Villa _Energy Transition and Energy Regulatory Sandboxes_Funseam Seminar032022

  1. 1. Energy Transition and Energy Regulatory Sandboxes – Tr@nsnet Report INDEX 1. Objective of the Tr@nsnet and of the Report 2. Context of Energy Transition and Regulatory Sandboxes (ERS) 3. Situation in the SUDOE region 4. Recommendations for designing and implementing ERS
  2. 2. Energy Transition and Energy Regulatory Sandboxes – Tr@nsnet Report WHAT IS THE OBJECTIVE OF TR@NSNET? To integrate the study of regulatory innovation into the innovation assessment methodology of Living Labs Energy Regulatory Sandbox (ERS) Living Lab Methodology (LL) Regulatory Innovation in Living Labs + =
  3. 3. Energy Transition and Energy Regulatory Sandboxes – Tr@nsnet Report WHAT IS THE OBJECTIVE OF THIS REPORT? Energy Transition Energy Regulatory Sandbox (ERS) What is How it works How to design it
  4. 4. Energy Transition and Energy Regulatory Sandboxes – Tr@nsnet Report ENERGY TRANSITION CHALLENGES Increasing renewable energy and energy efficiency Flexibility services Reduction environmental impacts Sector coupling Integration of energy storage Energy communities Consumer empowerment Protection of consumer interests
  5. 5. Energy Transition and Energy Regulatory Sandboxes – Tr@nsnet Report TECHNOLOGY AND REGULATION: DIFFERENT RATES OF CHANGE Timeline Technology Regulation Rate of change
  6. 6. Energy Transition and Energy Regulatory Sandboxes – Tr@nsnet Report TECHNOLOGICAL INNOVATION (TI) VS REGULATORY INNOVATION (RI) First TI RI Timeline Frustration Success Time lag TI-RI Timeline Frustration Success Problem: Case 1 New Business New Business First RI TI RI is seen as a burden Problem: Case 2
  7. 7. Energy Transition and Energy Regulatory Sandboxes – Tr@nsnet Report TECHNOLOGICAL INNOVATION (TI) VS REGULATORY INNOVATION (RI) TI and RI Timeline Frustration Success Solution IT and IR work together New Business ERS
  8. 8. Energy Transition and Energy Regulatory Sandboxes – Tr@nsnet Report ENERGY REGULATORY SANDBOXES ▪ New products ▪ Energy communities ▪ New services: peer-to-peer energy sharing and flexibility ▪ Technological platforms (Blockchain) ▪ New tariff models based on dynamic prices ▪ Business models in new areas ▪ … ERS are instruments to support innovation aimed at decarbonising the economy, and helping consumers to access new products and services and protecting their interests.
  9. 9. Energy Transition and Energy Regulatory Sandboxes – Tr@nsnet Report TEST ENVIRONMENTS vs ERS Regulatory Framework Test environments Bottom-up: Towards regulatory innovation Top-down: No regulatory innovation Regulatory Framework ERS
  10. 10. Energy Transition and Energy Regulatory Sandboxes – Tr@nsnet Report TEST ENVIRONMENTS vs ERS Regulatory Framework Test environments Bottom-up: Towards regulatory innovation Top-down: No regulatory innovation Regulatory Framework ERS ▪ Limited regulator participation ▪ Interaction between technological actors ▪ Validates the technology ▪ Business model still under design ▪ TRL 4-6 ▪ High level of regulator participation ▪ Holistic interaction between actors ▪ Validates the business model ▪ Designed business model ▪ TRL 7-9
  11. 11. Energy Transition and Energy Regulatory Sandboxes – Tr@nsnet Report HOW AN ERS WORKS? Real Environment Current regulation Innovation Real Environment Smart Regulation Innovation ERS: Controlled Real Environment Researchers Multisectoral approach Law Repeal Limited time and space Cogoverning Exercises Regulatory Agency Companies Consumers Innovation
  12. 12. Energy Transition and Energy Regulatory Sandboxes – Tr@nsnet Report BENEFITS OF ERS Innovation is accelerating Test innovation with real consumers Increases access to capital Benefits for consumers Decarbonisation Direct communication between stakeholders Risk mitigation Smart Regulation Technological Innovation Social Innovation Open Innovation Benefits for innovators New products New services Interest protection Specific benefits for each region/country
  13. 13. SITUATION IN THE SUDOE REGION
  14. 14. Energy Transition and Energy Regulatory Sandboxes – Tr@nsnet Report SITUATION IN THE SUDOE REGION France Portugal ▪ November 8, 2019 on energy and climate, known as the "Energy-Climate Law” ▪ In 2020, the CRE announced the application of the "regulatory sandbox“ ▪ In 2021, the CRE opened a second application phase Spain
  15. 15. Energy Transition and Energy Regulatory Sandboxes – Tr@nsnet Report SITUATION IN THE SUDOE REGION France Portugal ▪ November 8, 2019 on energy and climate, known as the "Energy-Climate Law” ▪ In 2020, the CRE announced the application of the "regulatory sandbox“ ▪ In 2021, the CRE opened a second application phase ▪ March 2020, Resolution No. 29/2020 of the Council of Ministers, established the general principles for the creation and regulation of technology free zones (ZLT) Spain
  16. 16. Energy Transition and Energy Regulatory Sandboxes – Tr@nsnet Report SITUATION IN THE SUDOE REGION France Portugal ▪ November 8, 2019 on energy and climate, known as the "Energy-Climate Law” ▪ In 2020, the CRE announced the application of the "regulatory sandbox“ ▪ In 2021, the CRE opened a second application phase ▪ March 2020, Resolution No. 29/2020 of the Council of Ministers, established the general principles for the creation and regulation of technology free zones (ZLT) Spain ▪ Royal Decree-Law 23/2020, of June 23, 2020: "novelties, exceptions or regulatory safeguards that contribute to facilitating research and innovation in the field of the electricity sector” ▪ 2021-2022 action plan of the CNMC
  17. 17. Energy Transition and Energy Regulatory Sandboxes – Tr@nsnet Report RECOMMENDATIONS FOR DESIGNING AND IMPLEMENTING ERS Regulatory agency Innovator ERS ▪ Regulatory Innovation ▪ The product / service enters to the market
  18. 18. Energy Transition and Energy Regulatory Sandboxes – Tr@nsnet Report RECOMMENDATIONS FOR DESIGNING AND IMPLEMENTING ERS Phase 1: Project application Phase 3: Sandbox Preparation Phase 4: Model Business testing Phase 4: Regulatory testing Initial Experimentation within agreed parameters Phase 2: Project review ▪ Regulatory Innovation ▪ The product / service enters to the market Phase 5: Validation Phase 5: Validation Phase 3: Sandbox Preparation Initial Experimentation within agreed parameters Regulatory agency Innovator
  19. 19. Energy Transition and Energy Regulatory Sandboxes – Tr@nsnet Report Phase 1: Project application Phase 3: Sandbox Preparation Phase 4: Model Business testing Phase 4: Regulatory testing Initial Experimentation within agreed parameters Phase 2: Project review ▪ Regulatory Innovation ▪ The product / service enters to the market Phase 5: Validation Phase 5: Validation Phase 3: Sandbox Preparation Initial Experimentation within agreed parameters Regulatory agency Innovator What are the barriers to market entry? RECOMMENDATIONS FOR DESIGNING AND IMPLEMENTING ERS
  20. 20. Energy Transition and Energy Regulatory Sandboxes – Tr@nsnet Report Phase 1: Project application Phase 3: Sandbox Preparation Phase 4: Model Business testing Phase 4: Regulatory testing Initial Experimentation within agreed parameters Phase 2: Project review ▪ Regulatory Innovation ▪ The product / service enters to the market Phase 5: Validation Phase 5: Validation Phase 3: Sandbox Preparation Initial Experimentation within agreed parameters Regulatory agency Innovator Is the proposal consistent with the energy transition? RECOMMENDATIONS FOR DESIGNING AND IMPLEMENTING ERS
  21. 21. Energy Transition and Energy Regulatory Sandboxes – Tr@nsnet Report Phase 1: Project application Phase 3: Sandbox Preparation Phase 4: Model Business testing Phase 4: Regulatory testing Initial Experimentation within agreed parameters Phase 2: Project review ▪ Regulatory Innovation ▪ The product / service enters to the market Phase 5: Validation Phase 5: Validation Phase 3: Sandbox Preparation Initial Experimentation within agreed parameters Regulatory agency Innovator What preconditions must be met for the ERS? What are the clauses of experimentation? RECOMMENDATIONS FOR DESIGNING AND IMPLEMENTING ERS
  22. 22. Energy Transition and Energy Regulatory Sandboxes – Tr@nsnet Report Phase 1: Project application Phase 3: Sandbox Preparation Phase 4: Model Business testing Phase 4: Regulatory testing Phase 2: Project review ▪ Regulatory Innovation ▪ The product / service enters to the market Phase 5: Validation Phase 5: Validation Phase 3: Sandbox Preparation Regulatory agency Innovator Initial Experimentation within agreed parameters Initial Experimentation within agreed parameters RECOMMENDATIONS FOR DESIGNING AND IMPLEMENTING ERS
  23. 23. Energy Transition and Energy Regulatory Sandboxes – Tr@nsnet Report Phase 1: Project application Phase 3: Sandbox Preparation Phase 4: Model Business testing Phase 4: Regulatory testing Initial Experimentation within agreed parameters Phase 2: Project review ▪ Regulatory Innovation ▪ The product / service enters to the market Phase 5: Validation Phase 5: Validation Phase 3: Sandbox Preparation Initial Experimentation within agreed parameters Regulatory agency Innovator Are governance mechanisms working? Do the mechanisms for interaction with users work? RECOMMENDATIONS FOR DESIGNING AND IMPLEMENTING ERS
  24. 24. Energy Transition and Energy Regulatory Sandboxes – Tr@nsnet Report Phase 1: Project application Phase 3: Sandbox Preparation Phase 4: Model Business testing Phase 4: Regulatory testing Initial Experimentation within agreed parameters Phase 2: Project review ▪ Regulatory Innovation ▪ The product / service enters to the market Phase 5: Validation Phase 5: Validation Phase 3: Sandbox Preparation Initial Experimentation within agreed parameters Regulatory agency Innovator Can the product/service enter to the market? Does regulation need to be rethought? RECOMMENDATIONS FOR DESIGNING AND IMPLEMENTING ERS
  25. 25. Energy Transition and Energy Regulatory Sandboxes – Tr@nsnet Report Phase 1: Project application Phase 3: Sandbox Preparation Phase 4: Model Business testing Phase 4: Regulatory testing Initial Experimentation within agreed parameters Phase 2: Project review ▪ Regulatory Innovation ▪ The product / service enters to the market Phase 5: Validation Phase 5: Validation Phase 3: Sandbox Preparation Initial Experimentation within agreed parameters Can the product/service enter to the market? Does regulation need to be rethought? What preconditions must be met for the ERS? Is the proposal consistent with the energy transition? Are governance mechanisms working? What are the barriers to market entry? What are the clauses of experimentation? Do the mechanisms for interaction with users work? Regulatory agency Innovator RECOMMENDATIONS FOR DESIGNING AND IMPLEMENTING ERS
  26. 26. Energy Transition and Energy Regulatory Sandboxes – Tr@nsnet Report Relationship with the energy transition: Energy transition is a consumer-centred, multi-sectoral transformation Maturity level of innovations: Business models with validated technologies will help regulatory innovation Holistic character of evidence: The new energy model requires progress in new system governance mechanisms Regulatory Sandboxes and Energy Transition: Instruments to support innovation towards the decarbonisation of the economy KEY SUCCESS FACTORS OF AN ERS (CONCLUSIONS)

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