Power System of the Future: Keys to delivering capacity on the distribution grid

KEY MESSAGES

The energy system is undergoing a transformative shift from a centralised to a decentralised generation model, highlighting the critical role of the distribution grid. However, the existing distribution grid is inadequately prepared to handle the integration of megawatts (MWs) outlined in the EU's Fit for 55 and REPowerEU objectives. To overcome this challenge:

• It is imperative to prioritise grid expansion through physical modernisation and digitalisation efforts. Failing to address the scarce capacity issue, which is already evident on the horizon in the EU, will impede the EU’s progress on decarbonisation and energy independence initiatives;
• a marginal ~8% additional grid investments[1] versus business-as-usual must be realised and backed by sufficient revenues if a 55% greenhouse gas (GHG) reduction is to be reached (instead of the initial 46% targeted by the EU) by 2030;
• the emergence of distributed energy resources (DERs) and innovative energy flow schemes, as with energy sharing for instance, require a focus on the distribution grid’s enhancement; and,
• the progressive electrification of most energy uses requires that the distribution grid show close to 100% reliability of power supply.

A new mindset must be adopted.

By investing in the grid’s enhancement and implementing supportive policies, legislators can pave the way to a resilient and efficient energy system. The new mindset is to move from incremental to anticipatory development, and to go for a smarter system. This strategic approach will not only accommodate the rise of new energy generation and consumption forms, but also position the distribution grid as the central pillar for a sustainable and prosperous future.

The intent of the “Power System of the Future” workstream is to analyse the current state of the energy system and the changing dynamics in the network’s use, identify quick wins, and develop recommendations to policymakers and industry stakeholders to shape the most efficient energy system model for a fully decarbonised and independent future of the EU.

METHODOLOGY

This paper intends to contribute to the targeted revision of the electricity market design (EMD), initiated by the European Commission on 14 March 2023.

[1] Connecting the Dots, Eurelectric, January 2021