1. Cross code energy innovation support CACoP principle
Ofgem 2018   

2. Ofgem Innovation Link Experience
What’s the problem?
Entry
Assessment
Feedback
Sandbox
Monitor & transition
Ofgem Innovation Link Experience
Ofgem currently provides a feedback service and has experience working with over 150 innovators
The provision of feedback and support to innovators has proven valuable in supporting innovation given the complexities of codes and regulation
Ofgem provides a sandbox* (derogation) process, however the scope of this is limited by Ofgem’s remit (licences, etc.)
Implications of innovative businesses extend beyond the remit of Ofgem
We recognise a need for a joined up coordinated process to better enable innovation.
*Sandbox: In a regulatory or code environment it means a time limited exemption or derogation from particular rules or obligations to achieve specific aims (prove a concept), subject to given criteria and process.   

3. What we are aiming to achieve
Entry
Assessment
Feedback
Sandbox
Monitor & transition
Providing a joined up approach toward supporting innovation, across codes and regulation.
Coordinated – Ofgem acts as a central coordinator throughout and manages innovator relationship
Transparent – information is shared across organisations
Accessibility – available to both incumbents and applicants that are not acceded to codes or have a licence
Quick and efficient – faster and more direct process   

4. Provide innovator feedback Support innovator trials
How we aim to achieve it
Entry
Assessment
Feedback
Sandbox
Monitor & transition
Provide innovator feedback
Most innovators need support in understanding how codes work with regard to their business models
This includes identifying barriers and where possible solutions to proceed (within existing framework)
Help identify need for a sandbox where criteria is met (innovative, trial ready, reg/code hurdles, benefit to consumers)
Develop a shared understanding of possible needs and barriers in the sector
Support innovator trials
Assess projects that have come through the feedback process
Develop derogations against relevant parts of codes, where codes/regs would prevent a trial that meets criteria (many caveats include limitations in what can be derogated, powers to do so, etc.) – on case by case basis
Each code and code administrator has a unique set up – powers, arrangements, requirements, etc;
Therefore, this process is code specific and would be discussed bilaterally with each code administrator to assess appropriateness
If relevant, than options for achieving will be assessed (e.g. BSC P362)   

5. Why we need a CACoP principle
The new principle aims to formalise a relationship between Ofgem, as coordinator of the cross-code innovation process, and the codes, for the purposes of reviewing and providing feedback to innovators in a joined up way.
The above process diagram shows Elexon’s role in the cross-code process, including a “sandbox” element. Ofgem coordinates entry to receive queries, engage with innovators/organisations and manage the process. Elexons process shows the relationship with Ofgem, in supporting the feedback process. Additionally, Elexon is aiming to modify the BSC to create a process designed to allow for testing innovative trials. Each code admin would assess the appropriateness, need and value of such an approach if even possible.
The CACoP principle is not aimed at forcing codes to pursue a sandbox element. However, we do ask each code to consider it.

6. Why we need a CACoP principle
Where appropriate, code administrators could support the cross-code sandbox by enabling a process that allows for innovative trials to proceed with derogations against parts of the code – assessed on a case-by-case basis. Above is an example from Elexon’s BSC mod P362, which suggests a process for this.