Power distribution system operators need a change of mindset plus new tools and business models if they are to fulfil their vital role in Europe’s energy transition, a conference in Brussels has heard.

The conference, organised by electricity trade organisation Eurelectric, called on EU Member States and regulators to speed up the development of “fit-for-purpose DSOs when implementing the Clean Energy Package”.

“The energy transition is on fast-forward and distribution companies are the linchpin of the future system, which is more decentral and more interactive,” said Kristian Ruby, Eurelectric’s Secretary General. “They urgently need the support of regulators and member states to play their role in the new system.” 

The European Commission estimates that by 2030, more than half of all electricity is expected to come from renewables. Add to this recently-agreed transport legislation which will bring more than 40 million electric cars on road in the same period, and it is clear that there is an urgency for European power distribution companies to move way beyond their traditional role of ensuring network connection and reliability.

A report published by EY last week indicates that the energy transformation may accelerate at even greater pace. The report notably finds that roof-top solar panels are perceived as becoming economically viable as soon as 2025. Demand-side storage, grid connected storage, EV charging infrastructure are also likely to be in the money ahead of 2030, adding to the urgency for DSO transformation. 

Eurelectric warns that the Clean Energy Package “leaves several provisions concerning the new activities of DSOs open to the national interpretation of Member States and scrutiny of national Regulators. A uniform implementation across Member States is important for companies operating in several countries and regulatory barriers to innovation should be minimised.”

It adds that with increased reliance on electricity for transport, heating and other critical consumer services, the DSOs “will also be more directly exposed to customers and potentially to public criticism in case of bottlenecks of supply failures”.

Knud Pedersen who heads Eurelectric’s Distribution & Market Facilitation Committee, said: “DSOs need to change mind-set and realise sizeable investments to draw on the full potential of technological advancements and embed digitalisation in network management operations. New functional areas will emerge from such a high magnitude energy transition. European regulators must ensure the right framework is set to incentivise investments and provide market certainty.”
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