Ofgem introduced an initiative (Innovation Link) in 2016 to promote innovation through what is known as a regulatory sandbox. This allows innovators to trial new products, services and business models in a real-world environment without having to comply with all the industry obligations.
So far, the regulatory sandbox has covered obligations controlled by Ofgem based on four eligibility criteria:
- Consumer benefit;
- Background research; and
- The need for support.
If innovators are not licenced and are seeking derogation, then they will need to work with a licensed business for the duration of the sandbox.
Further guidance on applying for an Innovation Sandbox Derogation can be found here.