The energy sector is highly regulated and can be complex to navigate, particularly for new entrants and innovators wanting to test new technologies, products or services that could benefit customers. Governments and regulators in a range of sectors in Australia and overseas have responded by implementing ‘regulatory sandboxing’ tools that can enable trials of innovative new offers in a controlled setting including targeted waivers of regulatory obligations that would otherwise prevent innovative technologies, services or business models.

Regulatory sandboxing arrangements recently commenced in the energy sector with the Essential Services Commission (ESC) releasing its Trial Project Guideline on 29 June 2022. The ESC has published a guideline, application form and related materials explaining how Victorian energy businesses can apply for waivers and how the commission will assess and monitor them to ensure that the proposed trials benefit energy consumers. Trial project waivers are available for any of the activities that would otherwise require an electricity or gas licence from the ESC.

The Australian Energy Regulator is also developing similar regulatory sandboxing arrangements under the national electricity, gas and retail rules and has been working closely with the ESC to develop an integrated process for Victorian and NEM waiver applications.

Farrierswier director Richard Owens was closely involved in the development and implementation of regulatory sandboxing for the energy sector, from when it was first proposed by the Finkel Review in 2017, through to the AEMC reviews that developed the regulatory framework to enable sandboxing in the NEM, and most recently advising the ESC on the development of its trial project guideline together with Linda McMillan. Richard, Robert McMillan and Claire Rozyn have also assisted the AER with the development of materials to support its regulatory sandboxing functions.

Read more about it on the ESC’s website: