DSOs must play an extended role in the new energy market design

As the European Commission prepares its ambitious legislative initiative for the end of this year, the EURELECTRIC conference “Winter Package impact on DSOs”, gives a unique opportunity to deliver forward-looking views about the new DSO role, innovation incentives in DSO regulatory frameworks and on real on-the-ground cooperation amongst DSOs which foreshadow the possible creation of a "DSO entity” in the new energy market design.

The electricity industry is undergoing a major transformation and the role of the DSO is changing and becoming ever more prominent. Subject to regulatory terms, DSOs are independent and neutral operators of new, local market arrangements and infrastructure designed to ensure that energy system is efficient and effective in terms of market enablement and customer empowerment.

Klaus-Dieter Borchardt, Director, DG Energy, European Commission, stressed that the Commission recognises the new important role DSOs have to play in the European energy system and supports DSOs in whatever way is appropriate given the increasing relevance of DSO matters in the EU-wide policy. Moreover, Mr Borchardt welcomed the initiative of the DSO Associations to continue and deepen their cooperation.

EURELECTRIC further presented its position on important issues are such as innovation, EV charging infrastructure and flexibility services for DSOs. Presenting EURELECTRIC’s recently adopted innovation report, Oliver Guenther, Vice Chair of EURELECTRIC WG Distribution, stressed the need for innovation incentives in DSO regulatory frameworks. “EURELECTRIC carried out a survey which shows huge potential for improving the regulatory incentives. Results show that there is a positive correlation between regulatory incentives and the availability of specific mechanisms that incentivise innovation.” Regarding EV infrastructure, Maximilian Urban, Chair of EURELECTRIC WG Active Distribution System Management, mentioned that “the limited availability of charging infrastructure, including a lack of adequate business and financing models, is considered to be one of the biggest obstacles to the widespread adoption of electric vehicles by customers.”  EURELECTRIC speaker Tony Hearne, Member of EURELECTRIC WG Active Distribution System Management outlined a 5-step procedure for procuring flexibility services by DSOs and a programme of longer-term work on platforms for flexibly markets.

In the second session of the event, EURELECTRIC, together with the other three DSO associations, CEDEC, EDSO for Smart Grids and GEODE, and Eurogas, presented their views on deepening their cooperation. Fergal McNamara, EURELECTRIC Coordinator Distribution Issues, mentioned that “EURELECTRIC and the other DSO associations are aligning their forces. A recent example of our fruitful cooperation is the Committee on Flexibility Markets that we have jointly created. Our cooperation anticipates making further constructive contributions towards the Commission’s intentions regarding the DSO body. We believe that any such body would benefit from a clear and robust governance structure and we are ready to make constructive contributions to your proposals.”

EURELECTRIC looks forward to further discussions on the DSO role and will contribute constructively to any proposal on a proposed DSO entity and stresses the need to translate this into concrete and ambitious actions, as an effective contribution to the EU’s market design.