DSOs need 'urgent support' in energy transition

The recently agreed legislation on electricity market reform leaves the activities of power distribution system operators (DSOs) "uncertain" and "open to the national interpretation of member states and scrutiny of national regulators", according to power trade association Eurelectric.

'The energy transition is on fast-forward. Distribution companies are the linchpin of the future system,' said Kristian Ruby, secretary general of Eurelectric.
'The energy transition is on fast-forward. Distribution companies are the linchpin of the future system,' said Kristian Ruby, secretary general of Eurelectric.

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Electricity DSOs are "the linchpin of the future system" and they "urgently need the support of regulators and member states to play their role", said Kristian Ruby, secretary general of Eurelectric.

The new text is intended to encourage system operators to give priority to "power generating [facilities] using renewable energy sources with an installed electricity capacity of less than 400kW".

A new report by Eurelectric and EY (formerly Ernst & Young) found photovoltaic and EV charging infrastructure might be "economically viable as soon as 2025", while sectors such as transport and heating will increase electricity demand, adding to the urgency for DSO transformation to ensure "network connection and reliability".

"DSOs will have to continuously develop and operate the network in a reliable, affordable and sustainable way, while building a grid that is fit for the future," the report stated. 

"Core functions will remain geared around delivering system security, integrating renewables and ensuring service quality.

"However, the DSO operating model will need to change; internal processes will require transformation and new competencies will have to be developed across different functional areas as DSOs become pivotal enablers of the energy transition," it continued. 

With a view to implementing the recently-agreed 2030 target for renewable energy generation, regulatory barriers to innovation should be minimised through a harmonised framework across member states, Eurelectric said.

"European regulators must ensure the right framework is set to incentivise investments and provide market certainty" that will allow DSOs to draw on technological advancements and embed digitalisation, said Knud Pedersen, chair of Eurelectric’s distribution and market facilitation committee.

EY global power and utilities advisory leader, Serge Colle, added: "Energy transformation in Europe will accelerate at great pace over the next five years.

"Distribution system operators need to plan for critical adjustments now to create an energy system that is fit for the future."

A version of this article was first published on Ends Europe

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