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Regulatory experimentation in energy: Three pioneer countries and lessons for the green transition

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  • Schittekatte, Tim
  • Meeus, Leonardo
  • Jamasb, Tooraj
  • Llorca, Manuel

Abstract

Regulatory experimentation is a novel approach to enable innovation in the energy sector, while maintaining the protection of consumers. We define regulatory experimentation as a temporary removal of regulatory barriers. This can be in the form of a derogation from a rule, but it can also mean assigning responsibility to players to conduct activities that they are normally not allowed to engage in. The outcomes of regulatory experiments inform future regulation. In this paper, we discuss experiences with regulatory experimentation in the energy sector of three pioneering countries: the Netherlands, Great Britain, and Italy. We compare the implementations along six design dimensions: eligible project promoters, scope of the derogations, length of the derogations, administration of the experiments, the access to public funding, and transparency. We also discuss how the early approaches have evolved in these countries. Finally, we look ahead and discuss how regulatory experimentation can evolve in the future European context to contribute to the green transition.

Suggested Citation

  • Schittekatte, Tim & Meeus, Leonardo & Jamasb, Tooraj & Llorca, Manuel, 2021. "Regulatory experimentation in energy: Three pioneer countries and lessons for the green transition," Energy Policy, Elsevier, vol. 156(C).
    • Handle: RePEc:eee:enepol:v:156:y:2021:i:c:s0301421521002524
    DOI: 10.1016/j.enpol.2021.112382
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    2. Lo Schiavo, Luca & Delfanti, Maurizio & Fumagalli, Elena & Olivieri, Valeria, 2013. "Changing the regulation for regulating the change: Innovation-driven regulatory developments for smart grids, smart metering and e-mobility in Italy," Energy Policy, Elsevier, vol. 57(C), pages 506-517.
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    6. Jesse D. Jenkins & Ignacio J. Pérez-Arriaga, 2017. "Improved Regulatory Approaches for the Remuneration of Electricity Distribution Utilities with High Penetrations of Distributed Energy Resources," The Energy Journal, International Association for Energy Economics, vol. 0(Number 3).
    7. Meeus, Leonardo & Saguan, Marcelo, 2011. "Innovating grid regulation to regulate grid innovation: From the Orkney Isles to Kriegers Flak via Italy," Renewable Energy, Elsevier, vol. 36(6), pages 1761-1765.
    8. Dierk Bauknecht, 2011. "Incentive Regulation and Network Innovations," RSCAS Working Papers 2011/02, European University Institute.
    9. Jamasb, Tooraj & Llorca, Manuel & Meeus, Leonardo & Schittekatte, Tim, 2020. "Energy Network Innovation for Green Transition: Economic Issues and Regulatory Options," Working Papers 18-2020, Copenhagen Business School, Department of Economics.
    10. Esther C. van der Waal & Alexandra M. Das & Tineke van der Schoor, 2020. "Participatory Experimentation with Energy Law: Digging in a ‘Regulatory Sandbox’ for Local Energy Initiatives in the Netherlands," Energies, MDPI, vol. 13(2), pages 1-21, January.
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    Cited by:

    1. Beckstedde, Ellen & Correa Ramírez, Mauricio & Cossent, Rafael & Vanschoenwinkel, Janka & Meeus, Leonardo, 2023. "Regulatory sandboxes: Do they speed up innovation in energy?," Energy Policy, Elsevier, vol. 180(C).
    2. Norouzi, F. & Hoppe, T. & Kamp, L.M. & Manktelow, C. & Bauer, P., 2023. "Diagnosis of the implementation of smart grid innovation in The Netherlands and corrective actions," Renewable and Sustainable Energy Reviews, Elsevier, vol. 175(C).
    3. Iwona Bąk & Katarzyna Cheba, 2022. "Green Transformation: Applying Statistical Data Analysis to a Systematic Literature Review," Energies, MDPI, vol. 16(1), pages 1-22, December.
    4. Rancilio, G. & Rossi, A. & Falabretti, D. & Galliani, A. & Merlo, M., 2022. "Ancillary services markets in europe: Evolution and regulatory trade-offs," Renewable and Sustainable Energy Reviews, Elsevier, vol. 154(C).
    5. Bovera, Filippo & Lo Schiavo, Luca, 2022. "From energy communities to sector coupling:a taxonomy for regulatory experimentation in the age of the European Green Deal," Energy Policy, Elsevier, vol. 171(C).
    6. Jasper van den Boom, 2023. "Experimenting with co-ownership of energy storage facilities - A case study of the Netherlands," Competition and Regulation in Network Industries, , vol. 24(4), pages 199-224, December.

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    More about this item

    Keywords

    Innovation; Research and development; Energy regulation; Energy retail; Green deal;
    All these keywords.

    JEL classification:

    • L5 - Industrial Organization - - Regulation and Industrial Policy
    • L9 - Industrial Organization - - Industry Studies: Transportation and Utilities
    • O3 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights
    • Q4 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy
    • Q5 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics

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