Impact Assessments for Regulatory Experimenting

A recent study published in Energy Policy came to the conclusions that “regulatory derogations can accelerate the rollout of renewables”.

With respect to instrumental design the conclusions are: “1) the entity responsible for the administration of the sandbox program and the derogations that can be granted to sandbox projects are the most important parameters when designing a sandbox framework, as they directly impact the potential for regulatory learning and the scope of sandbox projects. 2) the application process and the reporting of the lessons learned also influence the performance of the sandbox framework. While a call-based application process allows regulators to highlight regulatory themes, it can rush innovators into applications.”

Two policy implications were identified: “1) The outcomes of existing sandbox projects validate the idea of using regulatory sandboxes to promote innovation under the REPowerEU Plan and indicate important areas for future regulatory learning. The projects on flexible connections to the electricity network show that regulatory derogations can accelerate the rollout of renewables. 2) Second, to promote innovation and regulatory learning, it is important to make the regulatory scope of the sandboxes as open as possible while keeping it tangible for project applicants. Best practices found in the analyzed regulatory frameworks are twofold: 1) including multiple regulatory entities in the administration process and having an open approach towards regulatory derogations while providing regulatory advice to sandbox applicants. 2) Besides that, administrators should continuously evaluate and update the sandbox program, especially if they organize dedicated calls.”

[Source: Beckstedde, Ellen, Mauricio Correa Ramírez, Rafael Cossent, Janka Vanschoenwinkel, and Leonardo Meeus. ‘Regulatory Sandboxes: Do They Speed up Innovation in Energy?’ Energy Policy 180 (September 2023)]