The value of the grid

News Article

Today, Eurelectric releases a landmark report on the “Value of the grid”. The report outlines the importance of distribution system operators (DSOs) in an increasingly decentralised, decarbonised and interactive energy system.

Through the grid, individual and collective consumers are enabled to reap the financial value of selling self-generated electricity and participate in demand side response, in the most cost-efficient way. A comparison between the value of on-grid and off-grid connectivity shows that maintaining 99.99% of load served with the same quality would cost the individual customer about 10 times as much per kWh consumed than drawing power from the grid.

Examples from Ireland, Bulgaria, Spain and Norway show numerous ways in which the continuously evolving DSOs contribute to the energy transition, and the society as a whole. From keeping the lights on in case of ravaging storms, to job creation and enabling seamless electric transport, the grid is the linchpin of the future electricity system.

The pledge to decarbonise Europe’s economy has set in motion a highly complex energy transition, which will rely heavily on DSOs’ transformation. Grid operators are key to reach the 60% electrification rates needed for a deep decarbonisation of our society. Furthermore, they are the main service that integrates over 90% of renewable generation and accommodates millions of electric vehicles, connected electric heat pumps and other grid edge technologies.

DSOs have the will and necessary technology to cope with these changes. However, their swift transformation relies now on adequate legislative and regulatory frameworks to incentivise the development of smart and future proof networks, together with a modern tariff system. The latter should reflect the diversity of needs and the different types of consumers (prosumers, aggregators, local energy communities, EV owners).

Back in January, Eurelectric and EY have launched a first report elaborating on the transformations needs, tools, business models and regulatory frameworks, necessary for enabling DSOs to fulfil their new roles.