The British reference model

Rious, Vincent; Rossetto, Nicolò

doi:10.4337/9781786436092.00011

“…Traditionally, the primary objective of monopoly regulation was to cut costs. This was done in several countries by moving from cost-plus to incentive regulation, with GB playing a pioneering role (see, e.g., Jamasb and Pollitt (2007) and Rious and Rossetto (2018)). However, in order to costeffectively integrate more and more renewables and fully leverage the new opportunities enabled by digitalisation, additional incentives for the uptake of innovation were needed.…”

Section: Regulatory Tools To Foster Innovationmentioning

confidence: 99%

Regulatory experimentation in energy: Three pioneer countries and lessons for the green transition

Schittekatte

¹

,

Meeus

²

,

Jamasb

³

et al. 2021

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Regulation cannot always move as fast as innovation. Regulatory experiments enable real-life testing of new products, services or business models by allowing derogations from existing rules while maintaining the protection of energy consumers. The outcomes of these experiments inform future regulation. In this chapter, we discuss experiences with regulatory experimentation in the energy sector of three pioneering countries: the Netherlands, Great Britain and Italy. We compare the implementations along six dimensions: eligible project promoters, scope of the derogations, length of the derogations, administration of the experiments, funding, and transparency. We also describe how the early approaches have evolved in these countries. Finally, we look ahead and discuss how learnings can be applied to enable experimentation at the European level involving technologies that are expected to become important to enable the green transition.

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“…-RIIO, at OFGEM As already seen with the offshore case, the new British regulatory frameworkestablished about ten years agoconsiders the incentive frame as key to the success of grid regulation. It is also the message conveyed by the conceptual formula 'Revenues = Incentives + Innovation + Outputs' (Rious and Rossetto 2018). Incentives are targeting both Capex and Opex, in an open 'menu of contracts' where companies reveal their own core choices (such as choosing to design and build the grid, or to externalise that, as in the offshore case).…”

Section: Building An Efficient Loop Between the Business Models For Grid Users And Grid Companiesmentioning

confidence: 99%

New business models in the electricity sector

Glachant¹

2021

Handbook on Electricity Markets

2

0

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The electricity sector is facing a new wave of changes supported by new business models, two of which are key to our understanding of the ongoing transformations. The first model secures ex-ante investments into fixed cost generation assets with guaranteed long-term revenue streams. It is typical of investments into green generation, be they wind or solar, onshore or offshore, utility-scale or individual prosumer, within regulated schemes or private bilateral contracting. The second model is built with the light asset approach typical of the digitalisation era. It favours particular product characteristics for targeted customers and has many variants: aggregators as new intermediaries; digital platforms bypassing intermediaries; direct peer-to-peer exchange such as blockchain; fleets of consumption, generation and storage devices managed 'behind the meter', such as mini-grids or off-grid. Between the two, transmission and distribution grids will have to reinvent, as much as regulatory frames will permit, to create efficient loops of deeper interaction with the active users of the grids in operation and investments.

show abstract

“…As already seen with the offshore case, the new British regulatory frameworkestablished about ten years agoconsiders the incentive frame as key to the success of grid regulation. It is also the message conveyed by the conceptual formula 'Revenues = Incentives + Innovation + Outputs' (Rious and Rossetto 2018). Incentives are targeting both Capex and Opex, in an open 'menu of contracts' where companies reveal their own core choices (such as choosing to design and build the grid, or to externalise that, as in the offshore case).…”

Section: Riio At Ofgemmentioning

confidence: 99%

New Business Models in the Electricity Sector

Glachant

¹

2019

View full text Add to dashboard Cite

The electricity sector is facing a new wave of changes supported by new business models, two of which are key to our understanding of the ongoing transformations. The first model secures ex-ante investments into fixed cost generation assets with guaranteed long-term revenue streams. It is typical of investments into green generation, be they wind or solar, onshore or offshore, utility-scale or individual prosumer, within regulated schemes or private bilateral contracting. The second model is built with the light asset approach typical of the digitalisation era. It favours particular product characteristics for targeted customers and has many variants: aggregators as new intermediaries; digital platforms bypassing intermediaries; direct peer-to-peer exchange such as blockchain; fleets of consumption, generation and storage devices managed 'behind the meter', such as mini-grids or off-grid. Between the two, transmission and distribution grids will have to reinvent, as much as regulatory frames will permit, to create efficient loops of deeper interaction with the active users of the grids in operation and investments.

show abstract

The British reference model

Cited by 7 publications

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Regulatory experimentation in energy: Three pioneer countries and lessons for the green transition

Regulatory experimentation in energy: Three pioneer countries and lessons for the green transition

New business models in the electricity sector

New Business Models in the Electricity Sector

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