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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:

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

Key highlights / milestones    

We have worked with the team bringing the FLEXIS energy innovation programme to a close and identified areas for continuing collaboration between academia, regional energy teams and businesses. As yet we have not identified any specific projects where a derogation is needed. 

The Optimised Retrofit Programme is piloting projects around innovative business models and unlocking system value. We continue to monitor and prepare to share key insights.

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. With plans due to be complete in March 2024 we envisage this work being carried out later that year.