The Energy Innovation Toolkit is designed to reduce barriers to innovation and make navigating energy regulation easy. Our Innovation Enquiry Service helps innovators understand where new technologies and business models fit within current frameworks, exploring what options exist to enter the market right now. Our proof-of-concept trials offer time-limited regulatory relief, and will be facilitated by Regulatory Sandboxing.
Regulatory Sandboxing is a policy tool designed to help frameworks adapt to rapid change. Through Regulatory Sandboxing, proof-of-concept trials will operate under relaxed regulatory settings, so that innovative business models and technologies can be tested in a real-world environment. The outcomes of these trials will be analysed and provided to policy makers as evidence to inform upcoming regulatory change.
If you'd like to discuss how our services could help your project, feel free to get in touch with us through our contacts form.
About this project
The Energy Innovation Toolkit is a service provided by the Australian Energy Regulator (AER), the Australian Energy Market Operator (AEMO), the Australian Energy Market Commission (AEMC), the Essential Services Commission (ESC), and the Australian Renewable Energy Agency (ARENA).
The Energy Innovation Toolkit offers:
1. Resources providing instant answers to common energy regulation questions. These include:
- The Regulation Navigator, an interactive tool to help you understand what licensing, registration and authorisation requirements might apply to your business model.
- Use cases illustrating how energy regulation would apply to hypothetical business models utilising VPPs, community batteries, microgrids and electric vehicle charging.
- Our Australian energy markets page, explaining the roles of key energy sector stakeholders and regulatory authorities.
2. The Innovation Enquiry Service (IES). The IES provides informal guidance on:
- What energy regulations might apply to your business idea
- Options to launch under current energy frameworks, and
- What energy sector stakeholders you will need to contact and why.
The IES is live and accepting enquiries.
3. Regulatory sandboxing trials. Trial waivers and trial rules can provide a workaround to enable innovators to test business models that would be blocked under current energy regulatory frameworks. Trial proponents will report regularly on trial progress and outcomes, so this evidence can inform future regulation and policy change.
- The regulatory sandboxing trials function is live and accepting applications.
- We are currently accepting applications for trials requiring relief from national energy frameworks.
- We will also accept applications for trials requiring relief from Victorian energy frameworks, under the Victorian Regulatory Sandboxing function.
- For more information on how we will accept trial applications, please read our trials process page.
The Energy Innovation Toolkit will also promote knowledge sharing through reporting on trial outcomes and service usage to policy makers, to make sure that what we learn fuels evidence-based change.
What states and territories are within our scope?
The Energy Innovation Toolkit doesn't have jurisdiction to issue or consider a waiver relating to Western Australia and the Northern Territory. We only have jurisdiction to handle enquiries and consider or approve trial applications relating to matters within the National Electricity Market (NEM) (covering Queensland, New South Wales, Australian Capital Territory, Victoria, South Australia and Tasmania.)
Learn more about what the Energy Innovation Toolkit provides, how it supports the energy sector, and how you can access our services.
The purpose of the IES is to reduce barriers to market entry posed by energy frameworks that are complex and difficult to understand. By providing informal guidance to assist innovators to navigate complex regulatory frameworks, the IES will achieve the Energy Innovation Toolkit’s goal of fostering innovation and competition in the market and creating better outcomes for consumers.
How we can help
Through the IES, we can help you:
- Understand what regulation and market entry requirements might apply to your project
- Explore options to adapt your business idea to progress under current frameworks, and
- Navigate what agencies you might need to contact, what processes and applications you might need to undertake, and why.
The IES is a first stop for innovators seeking both informal regulatory guidance and a pathway to regulatory relief:
- We draw on the combined expertise of the AER, AEMC, AEMO, ESC, state regulators and other government agencies, and can make targeted referrals to any of these bodies if we identify that your question is best placed with them.
- We can also discuss your suitability to undertake a trial, help develop your proposal and refer you to make an application for regulatory relief (noting that we couldn’t provide a definite view on whether your application would be successful.)
The IES can provide feedback at all stages of business model development:
- We can help if you’d like help working around a known barrier for an existing innovative technology.
- We can also explore what regulations might apply to an idea that is totally new.
What we don't provide
IES guidance is our team’s informal, staff-level view. It’s not a replacement for your own legal advice and due diligence – it’s designed as an orienting first step that brings together guidance from a range of specialists, so you won’t be starting from scratch.
We do NOT provide:
- Legal advice, regulatory decisions, or endorsements
- An official view from the AER or any other market body
- Confirmation that your innovation is definitely compliant with the rules.
The scope of the IES is limited to informal guidance on energy regulation. Our team can refer you to external resources on other kinds of regulation (for example, safety, financial and environmental regulation) that might apply to your project. For more information on IES processes, timeframes and how to access the service, please read our IES process page.
Click here to lodge an enquiry through the Energy Innovation Toolkit Portal.
We are currently accepting applications for trials requiring relief from national energy frameworks. We will also accept applications for trials requiring relief from Victorian energy frameworks through the Victorian Regulatory Sandboxing function. For more information on trials and how to apply, please read our trials overview page and our trial application process page.
A Regulatory Sandboxing trial temporarily removes or amends an energy regulatory barrier, allowing an innovative business model to be to be tested that would normally be unable to proceed under current frameworks. The outcomes of trials provide evidence on how new regulatory settings could function in a real-world environment. This evidence can be used by policy makers to inform long-term regulatory change.
The Energy Innovation Toolkit offers regulatory relief to support innovative trials via three mechanisms:
Trial waivers allowing for specific energy rules to be waived to allow a trial to proceed. Trial waivers will be issued by the Australian Energy Regulator (AER).
Trial rule changes allowing for a temporary change to a rule or the making of a new rule to allow a trial to proceed. Trial rule changes can help when a waiver is insufficient to remove the regulatory barrier targeted by the trial. Trial rule changes will be administered by the Australian Energy Market Commission (AEMC).
Victorian trials waivers providing relief from Victorian energy frameworks. Victorian trial waivers will be issued by the Essential Services Commission (ESC).
Some trial projects may require a combination of complementary mechanisms, where allowed by the energy rules. Although these mechanisms are administered by differing bodies, the Energy Innovation Toolkit is a central point of contact for innovators to lodge their trial project applications.
Energy Innovation Toolkit Project Partners will work collaboratively with each other to:
- Assess trial applications
- Consult on trial project viability, and
- Craft trial waiver or trial rule change conditions.
The AER will monitor trials, to make sure trial conditions are adhered to and that consumers are protected.
Trials are limited to five years, with the possibility of a once-off extension of up to one year.
Click here to lodge a trial application through the Energy Innovation Toolkit Portal.
Find out more about our services
Who we are
The Energy Innovation Toolkit is delivered by the Australian Energy Regulator, in coordination with our Project Partners.
The AER regulates electricity networks and covered gas pipelines in all jurisdictions except Western Australia. We set the amount of revenue that network businesses can recover from customers for using these networks. We enforce the laws for the National Electricity Market (NEM) and spot gas markets in southern and eastern Australia. We monitor and report on the conduct of market participants and the effectiveness of competition.
The AER is partnering with the Australian Energy Market Commission (AEMC), the Australian Energy Market Operator (AEMO), Victoria’s Essential Services Commission (ESC) and the Australian Renewable Energy Agency (ARENA) to deliver the Energy Innovation Toolkit.
The AER is responsible for:
- Providing regulatory relief to facilitate sandbox trials by issuing waivers from national energy frameworks
- Coordinating with Energy Innovation Toolkit Project Partners to assess and consult on sandbox trial projects, and to deliver guidance through the Innovation Enquiry Service
- Monitoring trial projects to ensure the safety of consumers
- Facilitating trial project knowledge sharing
- Delivering trial project outcome analysis and Innovation Enquiry Service usage insights to policy makers to inform regulatory change.
For more information on the scope of the AER’s trial waiver power and our approach to delivering the Energy Innovation Toolkit, please see the information and resources on our trials overview page.
Read more about what the AER does here.
The AEMC is an independent statutory body that works for Australia's future productivity and living standards by contributing to a decarbonising, affordable and reliable energy system for consumers. The AEMC manages the rule change process, and makes and amends the National Electricity Rules (NER), National Gas Rules (NER) and the National Energy Retail Rules (NERR). The AEMC does this in accordance with the national energy objectives, the central focus of which is the long-term interests of consumers.
The AEMC is responsible for:
- Providing regulatory relief to facilitate sandbox trials by assessing trial rule change requests and making trial rules that temporarily change energy rules or introduce new time-limited energy rules.
- Coordinating with Energy Innovation Toolkit Project Partners to assess and consult on sandbox trial projects, and to deliver guidance through the Innovation Enquiry Service.
For more information on the scope of the AEMC’s trial rule change power, please read our trials overview page.
Read more about how the AEMC approach to making rule changes here.
The ESC is an independent regulator that promotes the long-term interests of Victorian consumers with respect to the price, quality and reliability of essential services.
In Victoria, the ESC has responsibility for licensing and licence exemptions in the electricity and gas markets. The ESC licenses various activities including electricity and gas retail and distribution, electricity transmission, and electricity generation.
The ESC’s new Regulatory Sandboxing function will enable eligible innovators to trial innovative products and services in Victoria’s energy market with a trial waiver. Trial waivers will operate alongside licences and licence exemptions as a distinct authorisation category to enter Victoria’s energy market.
The ESC also makes and enforces customer protections and other rules predominately in the electricity and gas retail and distribution markets in Victoria, where the National Energy Retail Rules (NERR) and the National Energy Retail Law (NERL) do not apply.
The ESC is responsible for:
- Providing regulatory relief to facilitate sandbox trials in Victoria by issuing trial waivers for Victorian projects (from 1 June 2022).
- Coordinating with Energy Innovation Toolkit Project Partners to assess and consult on sandbox trial projects, and to deliver informal guidance through the IES.
- Determining reporting and monitoring obligations on a case-by-case basis when considering Victorian trial waiver applications so that those requirements can be tailored to specific trial projects.
For more information on the scope of the ESC’s trial waiver function, please read our trials overview page.
Read more about the ESC’s approach to delivering trials here.
AEMO manages electricity and gas systems and markets across Australia, helping to ensure Australians have access to affordable, secure and reliable energy.
Managing electricity and gas systems involves market forecasting, operating the electricity and gas networks from control rooms, responsibility for power system security and reliability, monitoring compliance with generator performance standards and connection standards, managing supply, and setting metering procedures, among other activities.
Managing wholesale electricity and gas markets includes activities like supervising prudential, managing settlement, and managing bidding and central dispatch.
Ownership of AEMO was – and still is – shared between government and industry, with members representing federal and state governments, as well as generation and production, distribution, retail and resources businesses across Australia. AEMO has always operated on a user-pays cost-recovery basis, and it recovers all operating costs through fees paid by industry participants.
The Energy Innovation Toolkit must:
- Consult with AEMO in relation to any potential impact of a sandbox trial on the operation and administration of energy markets
- Consult with AEMO relation to any potential impact of a sandbox trial on the operation of the power system, declared distribution systems and declared transmission system for gas.
There may be circumstances where AEMO could participate commercially in a sandboxing trial. In this instance, the Australian Energy Regulator (AER), Australian Energy Market Commission (AEMC), Essential Service Commission (ESC) and AEMO will work together to ensure any potential conflicts, as well as confidential information, are appropriately managed.
- This could include a separate team of AEMO staff assisting the Energy Innovation Toolkit with the trial assessment with appropriate information safeguards in place, or AEMO sitting out of the assessment altogether.
Read more about what AEMO does here.
ARENA supports the global transition to net zero emissions by accelerating the pace of pre-commercial innovation, to the benefit of Australian consumers, businesses and workers.
ARENA will not have a role in the assessment or monitoring of trial projects and will not have access to the Energy Innovation Toolkit Portal. Instead, ARENA will direct innovators to the Energy Innovation Toolkit to ensure that their projects are supported with regulatory guidance and, where appropriate, trials.
The Energy Innovation Toolkit will refer users to ARENA through the Innovation Enquiry Service where ARENA is best placed to answer their regulatory query.
Read more about what ARENA does here.