Ofgem has announced a modification to its regulatory sandbox, broadening its scope.
This focuses predominantly on aligning the Distribution Connection and Use of System Agreement (DCUSA) derogations process with related cross-code sandbox arrangements, designed to facilitate innovation.
It’s hoped that by allowing this loosening of the DCUSA obligations, participants can test and trial products of services for a period of time.
It was originally proposed by UK Power Networks in March, with the distribution network operator claiming the sandbox application process to lack the required flexibility. Now known as DCP345, these derogations would allow most scope for testing and learning.
When put to a vote, the derogation passed with an 100% acceptance verdict from DNOs, IDNO/OTSOs, suppliers and CVA. There were some mixed views about aspects of the proposal, including whether there was a need for a pre-consultation period and transparency, although it was ultimately successful.
DCP345 application will be assessed by Ofgem, unlike other DCUSA derogations which are assessed by a designated panel. They will also be assessed by ElectraLink, as the DCUSA Code Administrator, which will then provide its recommendations to Ofgem.
Ofgem’s regulatory sandbox was created in 2017 to facilitate small-scale innovation. There have been a number of projects that have utilised it, including Centrica’s ‘world first’ Local Energy Market, and projects by Verv and BP.