© Federal Ministry for Economic Affairs and Energy/Susanne Eriksson

Regulatory sandboxes: experimental areas for new energy technologies

Testing out new research findings in real life: an exciting opportunity for 20 winners of the “regulatory sandboxes for the energy transition” competition.

The new feature is that a number of innovative technologies and processes - such as the manufacture of hydrogen - are being tested in the field. The selected research consortia can gather valuable experience in geographically limited experimental spaces - experience they may be able to deploy throughout Germany in future. Problems can be identified, analysed and tackled in real life. This means that new energy technologies will reach the market more quickly - bringing decisive progress in the energy transition.

Focusing on hydrogen technologies

How can large quantities of hydrogen be produced using green electricity and stored - at an affordable price? What conditions are required for gas to be marketed commercially as a fuel for cars with fuel cell engines? What is the best way to network factories and private households and supply them with power and heat? How can transport be as low-polluting as possible in city centres? Possible solutions for complex questions like these are being jointly worked on and tested out in the regulatory sandboxes by, for example, municipalities, industrial companies, teams of scientists and IT specialists.

The Federal Government’s "regulatory sandboxes for the energy transition" competition for ideas aims to promote solutions which will substantially reduce the levels of harmful carbon emissions. The substantive focus of the invitation to bid was therefore placed on energy-optimised urban neighbourhoods, large-scale electricity storage, and especially on hydrogen technologies.

Hydrogen as a flexible and zero-emission fuel and coolant

The colourless and odourless gas, which can be made from water via electrolysis, is a genuine all-rounder and hopeful prospect for the energy transition. This is because its use generates no or very low greenhouse gas emissions. It can be deployed in many different ways. The gas can generate and store energy, cool generators in power stations, or serve as a zero-emissions fuel in cars with fuel cell engines. It can also be processed further to become carbon-neutral natural gas and many other chemical products.

Several regulatory sandboxes are taking advantage of this flexibility. They aim to convert electricity into hydrogen in large electrolysers, transport it in model grids, and then use it in line with need.

However, it will be some time before this all-rounder is used outside the regulatory sandboxes. At the moment, making hydrogen in this way is very expensive. The reasons for this include high conversion losses and the small-scale output of existing manufacturing facilities.

90 research consortia with more than 500 partners from industry and research took part in the first competition for regulatory sandboxes for the energy transition. 20 groups were selected as winners. These include regulatory sandboxes located in the areas affected by the phase-out of coal-fired power generation.

The Federal Ministry for Economic Affairs and Energy is providing a total of €100 million in funding each year for the regulatory sandboxes. On top of this, there is another €200 million available over the period for regulatory sandboxes in areas affected by the structural change.

The funding envelope for the implementation of regulatory sandboxes for the energy transition is to be increased. New funding guidelines are being drafted for this; they still have to be approved by the European Commission. This is to take place on the basis of the Framework for State aid for research and development and innovation in conjunction with the Guidelines on State aid for environmental protection and energy 2014-2020.