With an economy that is intrinsically linked to the use of fossil fuels, the UK needs a total shift in how we generate, distribute and consume energy if we are to meet net zero carbon targets by 2050. Stakeholders from all levels have the opportunity to consider a whole systems approach to make this necessary shift.
A whole systems approach means looking at current infrastructure and how it can be adapted to make way for low carbon technologies, and removing barriers in technology, processes and regulation to achieve the necessary changes for net zero to become a reality.
In a letter to the Prime Minister, the Council for Science and Technology stated that ‘Given the long timescales required to get innovation into individual homes and businesses and the scale of behaviour change needed by individuals, communities and institutions, we must start now.’
So, how can we adapt current infrastructure?
One of the challenges in using current infrastructure to facilitate innovative technologies has been industry regulation. Industry regulation is there to ensure the system is fair and equal to all users, from those running windfarms to the customer in their home. However, there is an argument that regulation can be restrictive to some innovation, as the solutions being proposed may not align with how the current market systems were developed and intended.
In response, Ofgem, the energy regulator for Great Britain, launched the Regulation Sandbox in 2017, with the aim of assisting innovation projects to move forward by removing the regulatory blockers if they became stuck. This would allow for more innovators to bring products into the energy networks, which will ultimately help the UK meet its net zero carbon targets.
What is a sandbox?
A ‘sandbox’ is where an innovator can shape, adapt and test their theoretical product to see if it has the potential to work in the ‘real world’.
Sandboxes are increasing in popularity across many sectors including finance and technology, and can be seen working, in combination with these aspects, in the energy sector. A sandbox is the minimal risk solution for innovation teams to test new models and products and is therefore helpful for policymakers when it comes to changing current regulations, which increasingly use an outcome-driven approach when it comes to decision-making. Most importantly of all, a sandbox provides the opportunity to demonstrate what the energy sector could look like in a low carbon future.
An area where increasing activity is being observed is the electricity distribution network. There has been a great uptake in the use of electric vehicles, retrofitting housing to generate energy through solar panels, and even the creation of entirely new micro grids.
In response to this increasing demand, the Distribution Connection and Use of System Agreement (DCUSA) – which sets rules for using the electricity distribution network – has launched an innovation sandbox to provide innovators with an opportunity to work with a sponsor, who is already a DCUSA Party, to test their innovation through granting derogations from the DCUSA itself. This, in theory, meets the expectations of the UK government’s ‘whole systems approach’ to reaching net zero carbon, as a successful product could permanently change the regulations which govern the electricity distribution network, so that it becomes part of the status quo.
This sandbox is open to a range of products and solutions, feeding directly from Ofgem’s Regulation Sandbox. See potential DCUSA Innovation Sandbox use cases at this link and please get in touch with Alexandra Moore at [email protected] for more information and to discuss whether your innovation idea has the potential to enter the sandbox process.