Diagnostic Toolkit for Reducing Regulatory Barriers to Solar, Wind and Pumped Hydro Storage in the European Union

Annex B. Methodology – scoring

Introduction

This Annex describes the methodology that is applied to systematically identify, assess and quantify regulatory barriers affecting the deployment of solar, wind, and pumped hydro storage, integrating different key OECD approaches. More specifically, it draws upon the OECD Competition Assessment Toolkit and the Product Market Regulation (PMR) indicators and the Indicators of Economic Burdens of Environmental Policy (BEEP) and Design and Evaluation of Environmental Policies (DEEP), and is therefore based upon to ensure a robust, tried and tested evidence-based framework.

This methodology serves as the central engine to identify and assess barriers to deployment as well as then for a self-diagnostic tool designed for policymakers at all levels – national, regional, and local – to systematically identify and assess regulatory barriers that exist for the deployment of solar, wind, and pumped hydro storage in their jurisdictions, via a list of questions that can be answered by the policymaker, with a scoring associated to each response.

More specifically, the OECD Competition Assessment Toolkit (OECD, 2021[1]) provides a structured framework based on competition principles widely used to qualitatively identify regulatory restrictions that limit market entry, distort ability and incentives to compete and limit consumer choice. These are barriers are identified and described in detail in each chapter for each market segment (see below).

The PMR Indicators (OECD, 2020[2]) enable a quantitative assessment to measure regulatory and administrative barriers to competition in product markets. The BEEP and DEEP methodology contributes a granular scoring system related to environmental policies that captures administrative burdens and economic inefficiencies, helping to quantify the severity of different regulatory barriers in that context (Koźluk, 2014[3]) (Berestycki and Dechezleprêtre, 2020[4]).

By combining the three aforementioned OECD tools, the methodology combines qualitative screening and quantitative scoring into a single, adaptable tool with the purpose of identifying barriers to the deployment of solar, wind and pumped hydro storage. This ensures that policymakers at all levels – national, regional, and local – can systematically diagnose the readiness of their regulatory frameworks for facilitating the deployment of solar, wind, and pumped hydro storage, while aligning with OECD best practices for pro-competitive and efficient policy design.

Structure of the Diagnostic Tool

The self-diagnostic tool aggregates regulatory barrier scores into low, medium, and high-level indicators, providing policymakers with a structured assessment of their jurisdiction’s regulatory readiness. Comparative benchmarking across regions, along with historical tracking, allows for an evaluation of progress over time and identifies areas requiring reform. This structured assessment ensures that policymakers can clearly identify weaknesses, benchmark their progress, and implement targeted reforms to accelerate the transition to clean energy.

There is a chapter for each market segment and describes in the main regulatory barriers that have been identified using the principles of competition and following extensive desk research as well as wide ranging discussions with market players, industry associations as well as the European Commission and national authorities, including two workshops.

Each chapter then has a structured set of questions grouped by different type of barriers to entry or deployment, to allow policymakers to self-evaluate whether and to what extent those regulatory barriers are present in their own current regulatory frameworks. Each question is assigned a 0, 0.5 or 1 with a 0 indicating full alignment with best practice (least restrictive rules), while a 1 reflects a barrier (most restrictive). These are then grouped and normalised into different levels of indicators to a 0 to 6 scale, where 0 less regulatory restrictive and 6 the most restrictive

There are three layers or indicators:

• Low-level indicators aggregate scores for specific regulatory areas (e.g., permitting, grid access).

• Medium-level indicators combine related areas to assess overall regulatory restrictiveness for each market segment at national level.

• High-level indicators provide an indication of overall regulatory restrictiveness at national level and at the level of the technology (i.e., solar, wind and pumped hydro storage).

This approach will enable possible future cross-jurisdictional and across time benchmarking.

Market-Specific Assessment Approach

Policymakers answer a customised set of questions tailored to different market segments, including:

• Utility-scale solar (including ground-mounted);

• Industrial and commercial scale solar (including agrivoltaics, carports, floating solar, rooftop solar on industrial sites);

• Distributed solar (including rooftop, energy communities, pro-sumers, aggregators);

• Onshore wind (including re-powering);

• Offshore wind (including fixed, floating installations and re-powering); and

• Pumped hydro storage (including greenfield and brownfield developments).

Scoring Regulatory Readiness

Following the methodology of the PMR, for each level of indicators, a numerical score is assigned on a scale from 0 to 6 so that policymakers can evaluate their readiness for deployment, as the self-diagnostic toolkit leads to qualification into three readiness levels based on their assessment scores:

• 0 = Ready – Minimal barriers exist, and the regulatory framework effectively supports renewable deployment.

• 3 = Moderate Barriers – Some regulatory challenges remain, but reforms are still needed to improve deployment conditions.

• 6 = Significant Barriers – Major regulatory obstacles for renewable energy investment and deployment.

The methodology uses follows the PMR Schemata with the scores being aggregated using equal weights at each step, with adjustments made for missing data points. The scores of the questions are aggregated into low-level indicators using the weights depending on the number of questions included for the low-level indicator. For example, if the low-level indicator "Permitting" is composed of ten data points for Agrisolar market, each has a final weight of 1/10. If one data point is missing, the remaining nine data points are reweighted to 1/9 each.

Policy Reform Recommendations

Whilst no policy recommendations are offered, for each identified barrier, good practices from an array of different countries and regions in Europe are collected that can serve as inspiration for regulatory change by policymakers at all levels of government. Examples that can serve as inspiration for regulatory reform, such as simplification of licensing, clearer regulatory guidelines, and enhanced financial incentives.

Conclusion on methodology

This integrated methodology provides policymakers with a structured, evidence-based approach to identifying and mitigating regulatory barriers to renewable energy deployment. By combining competition assessment, quantitative scoring using the PMR, BEEP and DEEP methodologies, it ensures a comprehensive framework to support the transition to a competitive, innovative clean energy market.