covid-19

Anja Langer Jacquin, the CCO of DEPsys explains what might COVID 19 mean for energy distribution system operators (DSOs) in the long-term.

Summer is here and COVID-19 is still with us. Though parts of society are reopening, full normality will be a slow, potentially irregular process – three steps forward, two steps back. Nonetheless, the situation has improved enough that we can start to think about the future.

A shock as profound as the pandemic will spark lasting changes: some good, some bad, some simply different. Distribution system operators (DSOs) and distribution network operators (DNOs) will not be exempt from this.

These utilities have had to rapidly pivot to handle the immediate challenges of the crisis, and now are in the midst of managing low- and medium-voltage grids through the transitionary phase as societies reopen.

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Now they must ask themselves what is at the other end of that transitionary phase. It can’t be a simple return to life before – COVID-19 has changed the game and besides, the industry’s commitment to the energy transition means there can be no backwards movement.  

So, what will those changes be? What are the lessons COVID-19 has taught us? Above all, that grid digitalisation – what many call the smart grid – may already have been a long-time industry talking point, but in reality is more important and urgent than we ever thought.

A different day-to-day

Many have speculated that COVID-19 will have lasting effects on how work is structured in our lives, with swathes of employees worldwide having adapted to working from home. One piece of research suggests that as many as 80% of German workplaces now have a flexible working policy in place – the most of any country worldwide. Four other European nations make the global top ten, too.

For grid managers, there is no substitute for a certain amount of field work. However, many functions such as grid monitoring, optimisation and power quality analysis are computer-based and therefore could easily be done remotely. At least, they could be if grid assets were sufficiently digitised to feed back real-time information to such systems remotely.

Those DSOs which did have such digitalisation in place were ready to deal with reduced on-premise staff headcounts and could do a large amount of anomaly investigation remotely without dispatching field engineers.

This was vital during the throes of the crisis. However, even after the pandemic passes, many workers may wish to continue with their new, more agile working arrangements, making digitised DSOs more attractive workplaces. What’s more, such DSOs will be better prepared for future major shocks. On a day-to-day level then, digitalisation makes grid managers more resilient from both operational and talent perspectives.

A question of cash

Many of the longest-lasting impacts of COVID-19 will be economic. With the threat of major recession and significant debt accumulation, there may well be less funding available for both publicly and privately owned DSOs to invest in their grids.

This could fundamentally alter utilities’ approach to investment. Traditionally, there has been a ‘better safe than sorry’ approach. This means pricey investments in physical infrastructure such as new transformers and cables when a local network looks like it might be approaching capacity.

In future, budgets are likely to emphasise sweating assets, only making capital-intensive physical investments when absolutely necessary. To do this safely, DSOs will need greater insight into grid and asset performance at a granular level, which ultimately means widespread digitalisation and the collection of real, hard data across the network.

Armed with this data, utilities can make far better informed and targeted investments where and when they are needed, avoiding waste, and increasing operational excellence.

Of course, digitalisation itself requires upfront investment. However, this will be orders of magnitude less than physical infrastructure and can give DSOs confidence they are getting the most out of every franc, pound or euro. A digitally-enabled shift to more working from home may also help DSOs save on some office-related overheads.

Profound changes

Of course, there may be other society-level changes that affect DSOs (other than more home working).

For example – though utilities did a tremendous job keeping the lights on through lockdown – both individuals and businesses may take a greater interest in self-sufficiency, accelerating investments in microgrid technologies or distributed energy resources (DERs) such as solar panels and batteries.

Similarly, consumers who have switched to working from home may have seen their energy bills increase as a result. They will also be spending far more time in their homes and may be more open to investing in energy technologies that decrease their bills and increase their comfort, such as heat pumps, solar panels, or home-batteries.

Finally, we must not forget the electric vehicle (EV) revolution, which was already underway across Europe but may be accelerated by the pandemic. Though EVs are still more expensive and we are undergoing economic shock, EU sales jumped by 6.8% in the first quarter of the year, according to the European Automobile Manufacturers’ Association, while total passenger vehicle sales plunged by 41.5% from mid-March to the end of May.

Taken together, these changes could accelerate the energy transition and amount to a reshaping of the distribution grid, shifting loads from commercial areas to residential ones and introducing many more behind-the-meter DERs. If so, DSOs will be called upon to invest and adapt – and digitalisation will give them the insight to de-risk those investments and increase return.

Ultimately, no one can predict the future. But if COVID-19 can offer any lesson to the electricity distribution sector, it’s that investments in deep digitalisation can both help overcome the challenges of today and build-in resilience for those of tomorrow while smoothing utilities’ path through the energy transition.