Regulatory sandboxes in the energy sector : final report

Regulatory sandboxes aim to support innovative solutions and promote regulatory learning, often by giving derogations from certain regulatory provisions to participants for a limited amount of time. Other forms of experimentation (regulatory or otherwise) exist, such as regulatory pilot projects, pilot regulations, living labs and test beds. Several Member States have already adopted or are considering adopting frameworks for regulatory experimentation in the energy sector, including regulatory sandboxes. A few reports have compared existing regulatory sandboxes in the EU and globally. However, there is limited information on the concrete implementation of these sandboxes, barriers for implementation and best practices, and the concrete impacts. A recent notable exception is the report by the Joint Research Centre (JRC), which represents the first EU-wide overview of regulatory experimentation frameworks for the energy sector. The main objective of this report is to analyse existing regulatory sandbox schemes for the energy sector with a focus on the EU Member States regarding their purpose, regulatory/legal basis, format, implementation barriers and best practices, and impacts in fostering regulatory learning and new business cases. Our analysis indicates that regulatory sandboxes are useful policy tools to develop regulations and enable the creation of new products and services, even if not all examples have a clear positive impact and many projects awarded under regulatory sandboxes are still ongoing. However, regulatory sandboxes are warranted only in the case where a regulatory exemption is strictly necessary for the innovation to take place. In other cases, different instruments (such as the ones where regulators/authorities supervise and guide the innovative projects) may be more adequate while avoiding the risk of distorting the level-playing field.