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NETWORK / 8 / DECEMBER 2017 / JANUARY 2018 P R E S E N T S NETWORK / 30 / APRIL 2019 going during GD2 and beyond, so future as well as current consumers can also benefit." But Foster is adamant that this level of innova on and ul mately the advantages for consumers will be heavily impeded if the regulator fails to successfully promote a collabora ve culture across u li es. "Great care is needed by the regulator to encourage collabora on and mutual learning. Crea ng ar ficial compe on between regulated energy networks, for short-term impact, risks harming the consumer if companies in their keenness to impress, fail to share good prac ce," he says. "As always, could the regulated companies do be er, yes? But if Ofgem fails to recognise it or even worse, reward those that don't share, then overall consumer benefit is reduced." Foster also insists that the "here and now" poli cal expediency of the day should not s fle innova on for short-term gain. THE IMPACT OF RII02 While the introduc on of the RIIO model was centred on innova on and how innova ve systems and products can benefit consumers, there is a concern that Ofgem's RIIO2 price control proposals will have a nega ve impact on the type of projects that network companies take on. Randolph Brazier, head of innova on and development at the Energy Networks Associa on (ENA) believes companies will be less inclined to undertake riskier projects, and will be more focused on "vanilla" projects where a return is guaranteed. "That means overall they will be less inclined to be innova ve. That is a par cular concern given the specific changes to the way innova on will be funded," explains Brazier. "All the focus will be on incen ve-based innova on. The exis ng successful NIA/NIC (Network Innova on Allowance/Network Innova on Compe on) funding models will be scrapped or heavily restricted. This would seriously impede progress towards a smart, flexible, low carbon energy system and all the progress that network companies have made in recent years." According to Brazier, the regulator should retain NIA/NIC- like funding mechanisms, as well as improved incen ve-based innova on design. "We also believe the regulator should be incen vising low TRL [technology readiness level] projects, longer- term projects, projects which deliver benefits that are beyond the scope of the networks, and cross-vector projects, including where these are not well supported by exis ng arrangements," he says. It is a worrying prospect that a lack of regulatory reform in key areas could block u li es firms from being able to meet customer demands and achieving long-term decarbonisa on goals. "[Regulatory reform] is absolutely cri cal if we want to SANDBOX SOLUTIONS With innova on at the top of the agenda for energy firms looking to find solu ons to the long-term challenges facing the industry, Ofgem's regulatory sandbox offers an opportunity to iden fy rules which pose barriers to innova on. Ofgem launched the regulatory sandbox service in February 2017, enabling innovators to trial new products, services and business models without some of the usual regulatory red tape applying. Engaging with innovators through the process has provided input to regulatory policy development, such as Ofgem's Future Retail Market Design project. As part of the second window of the sandbox ini a ve, oil and gas company BP is developing a pla orm that will allow consumers who generate their own electricity, known as prosumers, to sell excess electricity within a marketplace. This could create market-based revenues for prosumers, o en not available to small-scale domes c generators. Renewable energy supplier Tonik Energy is partnering with BP to explore the opportuni es for using a pla orm to match supply and demand, as well as how customers might interact with and benefit from it. BP's digital pla orm simulates energy trading from prosumers. While simulated trades will be based on real- me user data, no physical electricity will be bought or sold during the trial. The company says it wants to do much more than simply supply clean, affordable gas and electricity. "We plan to halve our customers' bills by 2022 through accelera ng the uptake of microgenera on, ba ery storage and electric vehicle charging infrastructure," says Tonik's managing director Chris Russel. "The trial contributes to Tonik's vision of changing the way people generate, store, use and now trade energy for a smarter, more dynamic and decentralised electricity market. It is a step towards connec ng our members to new technologies and innova ve ways of powering their homes with clean energy." Up to 250 domes c customers will be involved with the project. During the trial, par cipants will pay no more than the price of their normal tariff from Tonik. Where simulated trades on the pla orm create a lower price of electricity, that value will be provided to trial par cipants by Tonik, represen ng a saving.