Regulating radical innovations in the EU electricity markets: time for a robust sandbox

Abstract

During the last decade, the level of detail and complexity in the EU electricity market legislation has ballooned. Simultaneously, the pace of technological development has been rapid. This is necessary for the clean energy transition but also creates challenges. How do we ensure the legislation is keeping up with the development of the real world? Should innovative solutions be encouraged, even if they do not comply with the current rules? We argue that regulation of the ‘radical innovations’ is inadequate in the EU. As a solution, we discuss an EU framework for regulatory sandboxes and propose design principles for its development.