The Australian Energy Market Commission has welcomed consultation on law changes to implement a toolkit that makes it easier for businesses to trial innovative projects that respond to the rapid changes sweeping the energy sector, while also safeguarding consumers.

The consultation is being run by senior state and federal energy officials.

A regulatory sandbox is a framework within which participants can test innovative concepts in the market under relaxed regulatory requirements at a smaller scale, on a time-limited basis and with appropriate safeguards in place.

Regulatory sandbox arrangements will make it easier for businesses to develop and trial innovative approaches to providing energy services to consumers.

The consultation package seeks stakeholder feedback on draft amendments to the National Electricity Law, National Energy Retail Law and National Gas Law to support the introduction of a regulatory sandbox framework based on AEMC recommendations.

The draft law amendments follow on from the AEMC’s recommendation in a final report released in September 2019 that set out a pathway to introduce regulatory sandbox arrangements and enable proof-of-concept trials in the national energy markets.

At their meeting on 22 November 2019 energy ministers agreed to the recommendations in our report.

The AEMC published further advice on rule changes to implement regulatory sandbox arrangements in March 2020. An updated draft initial set of rules has been published alongside the law changes and stakeholders are also requested to consider and provide feedback on these and their interaction with the Draft Bill.

The consultation period will close on Wednesday 14 October 2020. Following the consideration of submissions, a final package of draft amendments will be considered by energy ministers.

Submissions can be sent to


The emergence of innovative technologies and business models in the national energy markets can bring significant benefits to consumers.

This was highlighted in the Independent Review into the Future Security of the National Electricity Market (Finkel review), which noted that innovative technologies can help reduce the costs of providing secure and reliable electricity supply and also contribute to reducing emissions.

As such, it is important that the regulatory framework and processes support potentially beneficial emerging technologies and business models. The Finkel review recommended updating the proof-of-concept testing framework, to facilitate innovation in the NEM. The review noted that new concepts that are inconsistent with the National Electricity Rules need to be proven to the point where a rule change can be made prior to being used in the NEM. Recommendation 2.8 was that the AEMC review and update the regulatory framework to facilitate proof-of-concept testing of innovative approaches and technologies. Recommendation 2.8 was accepted by energy ministers.