Ofgem’s Innovation Link is a ‘one stop shop’ offering support on energy regulation to businesses looking to introduce innovative or significantly different propositions to the energy sector.
We want to support innovative ideas that bring benefits to consumers. This also helps us understand emerging trends in the sector and identify areas in which our regulation may need to adapt to sustain innovation.
If you have a new business proposition, we offer a dedicated service to provide fast, frank feedback on the regulatory framework and what it might mean for you. We are also developing a programme of general support to help innovators get started in understanding the regulatory framework.
Fast, frank feedback
Innovators with new or significantly different business propositions for the energy sector can use this service. It may be particularly helpful for innovators developing propositions that do not fit neatly in to the existing regulatory framework. We want to help developers understand the regulatory implications of their ideas before they launch.
We have four eligibility criteria to receive support:
- Innovation: The proposition must be ground-breaking or significantly different to what is currently in the market. It could include either technological or business model innovation.
- Consumer benefit: It should be clear how the proposition would benefit consumers. This could be, for example, because it would lead to direct benefits such as lower energy bills or better customer service, or indirect benefits such as increased competition in the market.
- Background research: You should have researched the concept and be able to show that you have attempted to find out about the regulatory implications.
- Need for support: The Innovation Link provides information on the regulation in the energy sector. It does not provide business advice on the commercial viability of a project. You should be able to tell us why you need Link support. For example, what it is that you wish to understand from a regulatory perspective or how you think Link support would benefit you.
If your business proposition does not meet these criteria, then Ofgem has other, more suitable ways of engaging that we will refer you on to.
When you email the Innovation Link we will generally reply within two working days.
We will allocate you a case manager who will contact you to arrange a meeting or teleconference to discuss your business model and to see if you are eligible. This case manager will be your point of contact throughout and will be in touch within five working days.
If you are eligible for Link support, your case manager will arrange a second meeting or teleconference in order to work with you to refine the queries you’d like help with. This is an important stage and will give us an agreed set of questions for us to answer.
If your query is relatively straightforward then we expect to provide an answer quickly. More complex queries will take longer to answer. We should be able to give you an idea of expected timescales and will update you as we go through the process.
When we provide a response it will usually be in a meeting or teleconference and followed-up in writing. The purpose of our feedback is to help you understand our regulatory regimes, and to provide you with an informal steer on potential regulatory implications in the early stages of developing your project. However, it is not a substitute for your own due diligence. Depending on the nature of the feedback we have given, we may stipulate that the information is non-binding and confidential. See our standard legal disclaimer.
The following applies when we make a statement to a person that gives them informal feedback on their proposed innovation.
- The views expressed in the statement may not have been endorsed by our senior management or any relevant Ofgem Boards. If you are aware of any information that you believe would affect our position expressed in the statement you should inform us immediately.
- The authors of the statement are only in a position to offer some initial views of an indicative and non-binding nature on the material provided to them. The positions reflected in the statement may be subject to change or review in certain circumstances, for example (without limitation):
- on further consideration of the information provided;
- on receipt of further material information;
- where a member of Ofgem staff or a relevant Ofgem Board reaches a different view; or
- following a change in law that relates to the proposed innovation.
- The statement does not represent an approval or endorsement of your proposed innovation. Neither you, nor anyone acting on your behalf may refer to the statement, either expressly or by implication, in a way that suggests that Ofgem has approved, endorsed, or otherwise accepted that you or your innovation complies with regulatory requirements.
- The statement is made without prejudice to any decision or action Ofgem may take in the future, including enforcement or other regulatory action.
- Ofgem accepts no legal liability in contract or in tort for the accuracy and/or quality of the information provided.
- You may not, without our express permission, share the statement or contents of documents with a third party (either in part or in full), other than person(s) involved in developing or financing your proposed innovation. This does not prevent you disclosing the statement to your legal advisers or auditors, provided attention is drawn to this disclaimer. Neither the Gas and Electricity Markets Authority nor any person acting on its behalf may be held responsible for the use which may be made of the information contained in the statement.
- It is not Ofgem’s role to provide legal advice and any information or comment provided by Ofgem is not a substitute for independent legal advice on your own circumstances. It is your responsibility to assess compliance with regulatory requirements.
Please email us at firstname.lastname@example.org and we'll send you our enquiry form.
The regulatory sandbox enables innovators to trial innovative business products, services and business models that cannot currently operate under the existing regulations.
For many innovators, our fast, frank feedback service helps find a way to go ahead within the current regulation. But where our regulation does prevent the launch of a product or service that could benefit consumers we can look at granting a sandbox to enable a trial.
The decision to grant a sandbox will depend upon us agreeing the regulatory arrangements for the duration of the trial, including protection for consumers and in some cases agreement with third parties. Further details are in our regulatory sandbox guidance.
Sandbox 2: Update
In October 2017, the Innovation Link invited applications to the regulatory sandbox for the second time. We are now collaborating with the organisations below to agree if a trial is necessary, and if so what methods it would use. Following these discussions we will decide whether a sandbox will be granted.
SIG and SmartKlub
We have granted a regulatory sandbox to two trials in Nottingham and Staffordshire. The trials involve the use of digital technologies, which switch the customer’s electricity supply between solar, batteries and their normal supply. The trials will find the best time of use tariff to make the most of local solar generation and battery storage. A community Energy Services Company (ESCO) will be responsible for sending consolidated bills to domestic customers for electricity from batteries and solar, as well as for their usual energy supply. Customers will be guaranteed to pay no more than if they had not participated in the trial. The local network operator may want to buy balancing services from the ESCO.
We have granted a regulatory sandbox for a peer-to-peer electricity trading trial at Banister House in Hackney, London. By installing Verv Home Hubs and battery storage into the estate, the trial is designed to maximise the use of locally generated solar power by trading it over a platform. The aim is to reduce the cost of energy for participants within the community while accessing green energy. Participants will be guaranteed to pay no more than if they had not participated in the trial.
Isles of Scilly Smart Islands Programme
A trial on the Isles of Scilly of smart energy systems, flexibility services and community-driven commercial models to enhance the Islands’ resilience and reduce bills for local residents.
Owens Square Community Energy
A scheme in Owens Square, Bristol trialling a community-scale shared battery to balance local generation with consumption at a school and local residential and commercial developments.
Gower Power Solar Storage
A trial of a direct local supply arrangement in Swansea, with power from community-owned solar farm and storage facilities supplied to local residents and businesses.
A trial of a community-scale shared battery paired with micro-generation at the Smart Fintry project.
Energise Barnsley are developing a peer to peer trading platform for social housing tenants in Barnsley with Barnsley Council and Northern Powergrid. The purpose is to share the benefits of solar PV with those residents who do not have solar PV (or a battery installed).
Running an energy trading pilot accessible to retail consumers, using a secure digital platform. The intent is to provide cost-competitive localised low carbon energy services to consumers, supporting the adoption of distributed renewable energy and enabling peer-to-peer trading.
Expressions of Interest overview
We are also in further discussions with two prospective sandbox projects, and are awaiting additional detail.
- We received 37 expressions of interest in the second window of the regulatory sandbox, all of which we assessed against our published criteria.
- We were happy to see that many applications did not need a sandbox, and we were unclear if a regulatory barrier existed. In the vast majority of those cases we have instead provided feedback on how to go ahead without the need for a sandbox.
There were a small number of unsuitable expressions of interest, primarily because they were not asking for a trial of a new product or service but a permanent change in regulation, which is not appropriate for the short-term nature of the sandbox. We were not able to help in cases where the applicants was simply seeking an endorsement from Ofgem, which is not something we offer.
Sandbox 1: Outcomes
The first sandbox received expressions of interest from February to March 2017.
- We received 30 expressions of interest.
- For 22 innovators, we supported them on understanding how their business model could operate within existing regulatory arrangements through our fast, frank feedback service.
- We have granted a regulatory sandbox to the following projects; two exploring peer-to-peer energy trading and the other offering an innovative tariff:
- A consortium led by EDF Energy R&D UK and including Electron, PassivSystems, Repowering London and University College London – trialling a peer-to-peer local energy trading platform. The platform aims to allow residents in urban areas to source their energy from local renewables and trade that energy with their neighbours, increasing self-consumption of low carbon energy and reducing overall energy costs.
- Empowered – trialling a local peer-to-peer energy trading scheme. The trial is aimed at enabling consumers to trade electricity directly with each other and yield benefits for the local community and the wider electricity system.
- Ovo Energy - trialling an innovative tariff supported by smart home technology. The trial product is designed to enable lower bills and warmer homes for customers with storage heaters who are currently limited to economy 7 / economy 10 tariff options, whilst also enabling grid balancing capabilities.
Finally, a potential sandbox for Good Energy for a community shared battery proposition at the Smart Fintry project will now be taken forwards under the second window.
Get in touch
For any other related queries, please contact the team at email@example.com
Ofgem’s Innovation Link does not provide financial assistance.