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21. Welsh Regulatory Derogation with Ofgem


We will call on Ofgem to develop a Welsh regulatory derogation to enable energy business model innovation in support of the wider recommendations of the Renewable Energy Deep Dive. The objectives of the derogation should include:

  1.  Accelerate the scale-up of renewable energy in Wales
  2. Enable energy business model innovation
  3. Realise the benefits and wider co-benefits of renewable energy (from a Welsh and energy systems perspective)
  4. Unlock energy system value, such as that from demand flexibility customers and consumers peer to peer trading and local electricity supply
  5. Better engage and protect the interests of Welsh citizens.

Key highlights / milestones    

This recommendation is in progress and is connected to recommendation 6. 
Key highlights since the deep dive include:

  • Ministerial and official engagement with Ofgem about innovation and considering regulatory options within Wales;
  • Working with a subgroup of deep dive members to interrogate the barriers to innovation within Wales as well as consider the aims of a Wales Energy Systems Architect (recommendation 6).

Next steps towards completion

This recommendation will remain an ongoing priority for the Welsh Government. Our priorities for the next 6 months include:

  • Using local energy plans (recommendation 2) to identify a series of challenges for the regulatory and funding regimes as evidence to present to Ofgem for a credible solution;
  • Further shaping of the aims of the Wales Energy Systems Architect as a potential means for testing and championing innovation in Wales.