This paper discusses whether the concepts of energy democracy, energy justice and the principles of good market regulation could play a role in developing a more consistent approach towards the regulation of the energy sector. It is concluded that the principles of good regulation can provide a useful framework within which advantages and disadvantages can be weighed of regulatory choices to be made when modernizing the regulation of the energy markets. A case study of the Dutch heat market is used as an example, showing that a lot remains to be gained in terms of flexible regulation and supervision and the facilitation of citizen participation. Both energy democracy and energy justice call for this. The lack of flexibility in the current regulatory framework could lead to ineffective and disproportionate regulation, hindering a sustainable, reliable and affordable development of the heat market. A larger need for flexibility is justified because of the differences between the types of heat networks. Customized solutions regarding unbundling and third-party access, including the modernization of the heat market, also require sufficient discretionary powers for the independent regulator that do not hinder but in fact stimulate the development of the heat market. Furthermore, increased citizen-participation is important in light of energy justice and energy democracy, which are energy specific concepts that overarch the principles of good regulation in the energy sector. Both concepts are based on the awareness that the energy transition is a matter for all citizens of the European Union and should not be ignored by policymakers and independent regulators. Since it is likely that most heat consumers will remain locked in for a relatively long time in natural monopolies facilitated by older generation heat networks and a lack of alternatives, substantive citizen-participation could yield positive results regarding community engagement in heat network management and heat supply.

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This chapter discusses how the fundamental values of energy democracy and energy justice and the principles of good governance can play a role in developing a more consistent approach towards the regulation of the energy sector and, more in particular, in dealing with the challenges of regulating the heat transition in the Netherlands in a just way. Energy justice and energy democracy are energy specific concepts that are gaining influence when interpreting and applying the principles of good governance in the energy sector. Both concepts are based on the awareness that the energy transition is a matter for all citizens of the European Union and should not be ignored by policymakers and independent regulators. The heat transition in the Netherlands significantly impacts the position of consumers, prosumers and vulnerable customers, as an ever-larger group of consumers will be disconnected from the gas grid and will be connected to heat networks. Energy democracy and energy justice and the principles of good governance are important values that should guide policy-makers in making choices that affect consumer participation and the protection of vulnerable customers in the heat transition. It is elaborated how energy democracy and energy justice and the principles of good governance indeed can provide a useful framework within which advantages and disadvantages can be weighed of regulatory choices to be made when modernising the regulation of the heat market in a just way. In particular, there remains a lot to gain in terms of flexible regulation and supervision as well as the facilitation of consumer/prosumer participation in the Netherlands. Because it is likely that most heat consumers will remain locked in for a relatively long time in natural monopolies facilitated by older generation heat networks and the lack of alternative heating, substantive consumer-participation could yield positive results regarding community engagement in heat network management and heat supply.

The energy transition calls for greater interdependency between different energy infrastructures and energy carriers to ensure an effective integration of renewable energy into the energy system. The energy sector's legislative framework and legal safeguards, however, are still largely based on the traditional market model, designed for centrally managed, fossil fuel-based, and large-scale production units for the supply of energy. Regulation is also fundamentally based on the idea that energy markets are separate. The role of hydrogen as a flexible energy vector -allowing for interaction between different energy markets -is not yet accounted for. Regulation and integration of newer energy carriers into the energy system, like the hydrogen market, is a challenge. This is all the more so in light of the uncertainties on how the hydrogen market will develop. This contribution assesses how good regulation of the hydrogen market can be attained. For this assessment, the principles of good regulation provide a foundation for developing a normative framework to identify 'good regulation' and good regulatory strategies. It is suggested that considering uncertain market developments, the use of a regulatory sandbox can offer a practical solution to assess what good regulation for the hydrogen market could entail. 5 Paul Breeze, Hydrogen Energy Storage' in Paul Breeze (Ed.