Ed’s note: EU DSO Entity, a controversial genesis

26

It is finally official. The European DSOs can boast that they are united in an association equivalent to that of the TSOs, ENTSO-E. This new association is founded by the four major European DSO associations, namely E.DSO, Eurelectric, Geode and Cenec, which ‘baptised’ it EU DSO Entity. And it is already having a couple of organisational issues.

For quite some time now, the European Commission was underlining the importance of creating one association to represent DSOs the same way ENTSO-E is representing TSOs. This new entity has been formally established with a gentle push or a nudge from the Electricity Regulation (EU) 2019/943, “in order to increase efficiencies in the electricity distribution networks in the Union and to ensure close cooperation with transmission system operators and the ENTSO for Electricity”.

Watch on demand:
Enlit Europe episode: Interview: Roberto Zangrandi, EDSO

As such, this new entity is going to be accepted as the sole counterparty from the DSOs part to discuss the development of network codes and guidelines. Its aim is to reflect on the new role of DSOs in the energy transition, strengthen the cooperation between DSOs, create a forum for discussion and facilitate the DSO/TSO collaboration.

In other words, this is a very important association and those that earned a seat on the board are going to have a lot and important work to achieve. Among the names on the board are some very familiar ones, like that of Mr Vincenzo Ranieri, CEO of E-Distribuzione spa, Mr Remy Garaude Verdier, Head of European Affairs at Enedis and Mr Torsten Maus, Managing Director of EWE NETZ GmbH.

Here I should add that I personally expected to see the name of Mr Joao Torres of EDP Distribucao (now E-REDES) on the board too, but according to the latest news, Mr Torres decided to step down after 15 years as the head of the Portuguese DSO. Smart Energy International and this column wish him the best in his new endeavours and we hope to meet him at Enlit Europe in Milan this year.

But this is not the only surprise. The second surprise regards the governance of the EU DSO Entity and it comes as a decision of the EU Parliament’s ITRE committee. The MEPs voted on the Electricity Regulation and Directive, which are the centrepieces of the new electricity market design and according to E.DSO “by opting for an unbalanced representation in the body’s Board of Directors, MEPs have chosen an approach that will make future work in the Entity much more difficult”. 

What happened, in short, is that in the new Entity there are 3 categories of DSOs: those with less than 100.000 connected customers, those with at least 100.000 and less than 1.000.000 connected customers and finally, the ‘big guns’ with at least 1.000.000 connected customers. The problem that EDSO is underlining, is that the vote of the representatives of all 3 categories is equal. That is, the vote of a DSO with less than 100.000 connected customers is equal to that of a DSO with more than 1.000.000 connected customers. I assume that the MEPs wanted to avoid that the large DSOs ‘take over’ the association and that the voice of the smaller DSOs is heard, which makes sense.

Have you read?
Measuring the performance of Europe’s smart grids
Europe’s DSOs need new market model, innovative technological tools

However, “We support the Parliament’s position to open the eligibility for membership to all DSOs across Europe, who are at different levels of unbundling,” said Roberto Zangrandi, Secretary-General of E.DSO for smart grids, the association of European leading electric power distributors, connecting between 70 and 80% of EU customers.

“However, what the Parliament fails to acknowledge is that giving equal weights to different DSO categories in the steering structure of the new Entity is grossly overlooking the realities of the European DSO landscape and actual market shares. Assigning one-third of votes in the Board of Directors to distributors with less than 100.000 grid users that, by comparison, connect much fewer customers is not only gravely disproportionate but a political rather than a practical choice. Larger DSOs will ultimately be expected to provide the organisational capabilities, resources and technical expertise to ensure the effective running of the DSO Entity”, he added.

He does make a valid point, doesn’t he? What do you think?

I would be keen to hear your thoughts via editorial@smart-energy.com.

Cheers,

Areti Ntaradimou
Editor, Smart Energy International