DSOs to take on new roles in an evolving energy market

11 February 2016

In the context of a rapidly evolving energy market, the coming years will be crucial for Europe’s energy systems. New industry players are emerging and interacting with Distribution System Operators (DSOs), forcing changes in the way they operate and plan their networks. DSOs must, therefore, take on a more active coordinating role in facilitating markets in a neutral and non-discriminatory way. In its recently published paper, EURELECTRIC reiterates that DSOs are indispensable in enabling a successful energy transition, while providing a stable and high-quality service to all customers in a smarter grids context.

EURELECTRIC’s vision on the role of DSOs considers a variety of potential responsibilities to be undertaken by DSOs. DSOs must act as neutral market facilitators and guarantee distribution system stability, power quality, technical efficiency and cost effectiveness in the future evolution of energy networks towards a smarter grid concept. DSOs are local or regional operators and are placed in an ideal position to work for the benefit of energy customers.

DSOs will have to manage their networks in a more active way and share information to make the transition possible. “This can be achieved by clarifying the DSOs’ involvement in data management and its contact with customers in case of emergencies or other services, such as new connections. We believe that these should no longer be considered as a ‘grey areas’. DSOs are best placed to take on this role and handle it in a secure, transparent and non-discriminatory manner,” said Frank Mitchell, Chair of EURELECTRIC’s DSO Committee.

EURELECTRIC stresses that DSO activities must be separate from - and complementary to - transmission system operator (TSO) ones, keeping in mind that DSOs are the only players capable of exploiting the benefits of a local approach in terms of grid management and technical customer support.

Energy regulators should recognise the broadening role of DSOs as neutral market facilitators and encourage efficient technological innovation. Performing this new role will lead to extra costs related, inter alia, to the introduction of smart grid solutions and the increasing complexity of data handling. Energy regulators should implement mechanisms which create and reward incremental incentives for innovative grid projects. 

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