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Frequently asked questions

Get quick answers to commonly asked questions. We'll expand these FAQs as the Energy Innovation Toolkit develops. 

Energy Innovation Toolkit scope

This website is for innovators who would like to:

  1. test or develop a new energy product or service and aren’t sure how
  2. find out more about what energy regulations might apply to their new business model
  3. seek relief from a particular energy law or regulation to allow them to trial an innovative product or service.

We don't provide funding to innovators, but funding may be available through other Government agencies and programs such as the Australian Renewable Energy Agency (ARENA). More information on ARENA's funding programs is available here.

The Energy Innovation Toolkit does not 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/approve trial applications relating to matters within the National Energy Market(New South Wales, Victoria, Queensland, South Australia, Tasmania, Australian Capital Territory). Enquiries relating to Western Australia should be referred to the Economic Regulation Authority and enquiries relating to the Northern Territory should be referred to the Utilities Commission.

We would still love to hear from you. We encourage you to get in touch with the Innovation Enquiry Service through the Services page, so we can help you identify where your new idea fits within the current regulatory framework.

Regulatory Sandbox services

A Regulatory Sandbox is designed to help facilitate trials by new and existing energy market participants of innovative concepts in Australia's electricity and gas markets in response to rapid technological change.

Regulatory Sandbox services can provide a temporary waiver from existing rules to facilitate proof-of-concept trials. Regulatory Sandbox trials provide a structured framework within which innovative technologies and business models can be trialled in a real-world environment without having to meet all the regulatory requirements, while still protecting consumers.

Regulatory Sandbox services also usually include enquiry services to help innovators to navigate regulation, and platforms for knowledge sharing to inform energy innovators and policymakers. 

Innovation Enquiry Service (IES)

You can submit your query to the IES team through the Energy Innovation Toolkit Portal. Read more about the IES process here.

We do not provide:

  • Legal advice, binding rulings, regulatory decisions, endorsements, or business incubation services (financial or technical advice related to launching a business)
  • Endorsement or certification that a product, service or business model is compliant with the rules
  • An official organisational view from the Australian Energy Regulator or any other market body. 

The IES helps innovators better understand current energy regulation and how their proposed product, service or technology sits within current rules. 

The IES is designed as a “first stop shop” for innovators navigating the energy regulation landscape. The IES can refer innovators to our Project Partners and other Government agencies where an external team is best placed to answer your query.

Innovators can get informal feedback on:

  • What energy regulations may apply to a specific project or business model
  • What options are available to progress a project or business model under current regulations
  • What formal regulatory processes or applications are required for market entry, and who an innovator can contact to progress the process
  • What regulatory barriers might exist that could be targeted with an application for a trial waiver or rule change

We will generally assess enquiries on a first-in, first-served basis.

However, if demand for the service is high, we propose to prioritise enquiries which meet the criteria below:

  • Enquiries that will yield new or valuable regulatory insights
  • Enquiries that will benefit consumers experiencing vulnerability
  • Enquiries that are similar to other enquiries being progressed and that can be grouped together
  • Enquiries from innovators without extensive regulatory resources or the ability to access this knowledge on their own 

 

Regulatory Sandbox trials

Once the Australian Energy Regulator (AER) has trial waiver powers, it will be able to grant a trial waiver for a trial project under the National Electricity Law and National Electricity Rules , National Gas Law and National Gas Rules , and National Energy Retail Law (NERL) and National Energy Retail Rules (NERR) in the jurisdictions where these apply.

The Essential Services Commission (ESC) is responsible for licensing, exemptions and trial waivers in the electricity and gas markets in Victoria. The ESC also makes and enforces customer protections and other rules predominately in the energy retail and distribution markets in Victoria, where the NERL and NERR do not apply. As such, applications for trial waivers will need to be separately made to, and considered, by the ESC in order to apply in Victoria.

To help us coordinate these processes, we encourage applicants to contact the AER before lodging an application for a trial waiver. This will give us an opportunity to form an initial view on whether an application to the ESC may be required and, if so, bring the ESC into the assessment process as early as possible.

Innovators may apply for an Essential Services Commission (ESC) trial waiver without submitting an IES query. Once the Australian Energy Regulator (AER) has trial waiver powers and the Australian Energy Market Commission (AEMC) has trial rule powers, innovators may apply for a trial waiver or rule without submitting an IES query. However, we suggest that prospective trial waiver applicants contact us before lodging via our contact page.

Under the National Energy Rules, the Australian Energy Regulator (AER) can already grant a waiver or an exemption from certain National Energy Laws and Rules . The new sandbox trial waiver function is separate from the existing AER waiver functions (including retailer authorisation, ring fencing and network service provider registration).

A person seeking a waiver or an exemption from these requirements for reasons relating to their existing business functions will need to apply under the existing arrangements rather than via a trial waiver. In providing feedback to an innovator the AER could refer a trial proponent to these processes if appropriate.

The Energy Innovation Toolkit expects to open trial waiver applications outside of those handled by the Essential Services Commission in Victoria when Regulatory Sandboxing legislation comes into effect and Regulatory Sandboxing rules have been implemented.

The Regulatory Sandboxing framework will allow innovators to test new approaches in relation to:

  • the supply of, or demand for, electricity and gas
  • customer connection services or customer retail services and/or
  • natural gas services.

To qualify as a trial project, a proposed trial must be “genuinely innovative”. The Statutes Amendment (National Energy Laws) (Regulatory Sandboxing) Bill 2022 and the Victorian Energy Legislation Amendment Act 2021 contain a set of innovative trial principles to guide the assessment of whether a proposed trial is genuinely innovative.

There are two mechanisms to facilitate trial projects. First, the Australian Energy Regulator (AER) may soon have, and the Essential Services Commission (ESC) presently has the power to grant a trial waiver , which exempts the trial project proponent from having to comply with certain rules in relation to that trial project for a fixed period. The Australian Energy Market Commission (AEMC) may soon also be able to temporarily amend existing rules or temporarily introduce a new rule of limited application to allow a trial project to proceed (this does not apply to energy retail rules in Victoria). 

We will generally assess trial waiver applications on a first-in, first-served basis.

However, if demand for the toolkit is high, we propose to prioritise trial waiver applications which meet the following criteria:

  • Projects that have cross-industry support, for example (but not limited to) trials that stem from the Distributed Energy Integration Program
  • Projects that have consumer or local community support
  • Projects similar to other applications being progressed and that can be grouped together
  • Projects that are closer to being ready to commence
  • Projects benefiting consumers experiencing vulnerability
  • Projects focused on addressing existing and emerging operational challenges in the National Electricity Market

Confidential information

Applicants will specifically be required to identify 'trial project confidential information', which is a defined term under proposed changes to the national energy rules (see clause 1.2 of the draft Trial Projects Guideline.

Information that is identified by an applicant as ‘trial project confidential information’ will be treated as confidential information received by the Australian Energy Regulator (AER) for the purposes of the National Electricity Law (NEL), National Gas Law (NGL) and National Energy Retail Law (NERL). The AER is only permitted to disclose such information in the circumstances set out in section 44AAF of the Competition and Consumer Act 2010 (CCA), and the relevant sections of the NEL, NGL and NERL. For applications pertaining to Victoria, ‘trial project confidential information’ means trial waiver information submitted to the Essential Services Commission that is confidential and/or commercially sensitive (see Victoria’s draft Trial Project Guideline).

Queries can be securely lodged via our Portal. Within the web portal, innovators can distinguish information that confidential.

It will be your responsibility to identify confidential information and provide reasons to support your confidentiality claims.

We will always endeavour to protect your confidential information and your intellectual property. We take your need to protect your information extremely seriously.

By participating in the Energy Innovation Toolkit, an innovator may need to disclose to the Australian Energy Regulator (AER) confidential information to support its enquiry or trial waiver application, potentially including intellectual property relating to its innovative project. We require that you consent to our disclosure of this information to Australian Energy Market Operator (AEMO), the Australian Energy Market Commission (AEMC) and the Essential Services Commission (ESC) to facilitate our assessment and response to your enquiry in a timely manner.

The AER’s approach to obtaining an innovator’s consent to share confidential information differs between enquiries and trial waivers:

  • Innovators submitting enquiries must consent to the disclosure of confidential information to the AEMC, AEMO and the ESC for their query to proceed.
  • Innovators submitting a trial waiver application may, in some instances, be asked for their consent for confidential information to be disclosed to certain government entities, but they are under no obligation to do so for their application to proceed. However, innovators will need to consent to the disclosure of confidential information to ESC where it is relevant to ESC’s trial waiver functions.

For trial waiver applications pertaining to Victoria, innovators must consent to ESC disclosing confidential information to AEMC, AEMO, Energy Safe Victoria and the Victorian Department of Environment, Land, Water and Planning to assist ESC to determine their application for a trial waiver.

The AER’s general policy on the collection, use and disclosure of information will apply to both enquiries and trials and is set out in the ACCC/AER Information Policy.