Sharing Energy: Dealing with Regulatory Disconnect in Dutch Energy Law

Abstract

While sharing economy services enabled by digital platforms such as Uber and Airbnb are on the top of the current academic discourse, similar developments in energy go largely unnoticed despite their potentially significant effect on the current energy market design. The decreases in price and increases in efficiency of energy supply and small-scale storage equipment lead to energy consumers increasingly becoming prosumers of sustainable energy. The increased tempo and availability of digital solutions, such as online platforms, also impacted the prosumers: It became technically possible to trade energy on the local and national energy market- for example, by the means of supplying one’s neighbours or relatives in another city. Thus, the role of the prosumers effectively expanded to include besides the previous parallel roles of energy consumers and producers also the roles of suppliers and traders. The activity of prosumers on the local energy market, which presumes that energy is both produced and consumed within the same geographical region and preferably at the same time (simultaneously), is endorsed as the preferred scenario at both European and Dutch national levels. Against this background a question arises, and namely: To what extent is it possible to ‘share energy’ under the current Dutch regulatory framework? In order to answer this question, the ‘match’ between the current developments on the Dutch energy market (prosumers assuming an expanded role) and the respective regulation is assessed from the perspective of regulatory disconnection. The latter could arise when innovation in the market develops in a faster tempo or differently than envisaged compared to respective regulation. The regulatory disconnection is not automatically problematic, but in certain cases it could lead to regulatory failure and should be eliminated. The regulatory approaches to bridging the gap between innovation on the one hand and regulation on the other hand could be roughly divided into three distinct categories: those addressing the horizontal dimension of disconnect by the means of adjusting the timing of regulatory intervention, those addressing the vertical dimension by changing the level of regulatory generality, and those pertaining to the institutional dimension by introducing regulatory agencies and by performing regulatory updates and reforms. In this vain, and in order to be able to answer the main research question posed earlier, the current paper also aims to assess whether there is indeed problematic regulatory disconnect between innovation and regulation, and which regulatory approaches are chosen by the Dutch government to address this disconnection.