Europe’s DSOs need new market model, innovative technological tools

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Europe’s distribution system operator (DSO) model should transform to create benefit for the industry, customers and society, E.DSO council recommends.

The recommendations follow from the latest edition of the E.DSO’s Stakeholder and Innovation Council, comprised of senior industry figures.

The discussions focussed on three key issues in a transforming energy system, which has DSOs at its core as the link between customers and the wider energy system – the embedding of societal values in the new DSO model, regulatory barriers in the current model and the tools and instruments needed to implement the new model.

The summary report notes that DSOs will be serving many new players, of which the most important are the grid users themselves. This means that in the future the focus must be on societal optimisation of the entire energy system.

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DSOs should develop a framework in which all existing and new players receive appropriate price signals to align their actions with the societal values and exploit their potential. More importantly, enabling flexibility over different time horizons using distributed resources along central ones can contribute in a notable way to these values.

Smart meters are one of the most central innovations in the modern energy system. Widespread deployment of data capturing from smart meters is a prerequisite for the DSOs to act as a neutral market facilitator.

The market model itself should be based on a detailed understanding of society’s goals. As these goals are changing, dynamic regulation is needed to change with them and not merely minor incremental changes. Discussion is needed among all parties, regulators, system operators, generators, suppliers, technology and solution providers, and consumers.

The future power distribution system needs to be more reliable, resilient and flexible and can be ensured with digitalisation and new technologies. Sensors, DERMS, low latency communications networks and digital platforms are some of the tools necessary for real time grid management, flexibility, network modernisation and an integrated and smart ecosystem.

DSOs can help make the ecosystem transition a reality by taking a central role in the coordination, says the summary report. Digital strategies enable true customer centricity, the digitalisation of DSOs’ processes move them to an integrated data rich environment and deep understanding of customers is driven by data and analytics.

DSOs also should pursue regular investments in the transformation of the networks and partnering at different levels with all users.