The changing world of the DSO in a smart energy system environment

The changing landscape of the European energy system is fundamentally challenging the role of Distribution System Operators (DSOs). While drastic reforms are not warranted, national and European policy-makers should consider a number of legal and regulatory adjustments. This is the central finding of a new CERRE Energy & Climate study on the changing role of DSOs.

Key recommendations of the report include:

• Adapting European legislation and national legal frameworks to assign DSOs the role of neutral market facilitator;
• Allowing DSOs to conclude voluntary flexibility agreements with system users – either directly or through a third party;
• Encouraging national regulatory authorities to design tariff structures according to local conditions, and not regulating such tariffs at the European level;
• Revising European legislation to distinguish between core and non-core tasks, while allowing leeway for Member States to determine the exact scope of the latter category, in the light of actual levels of competition in their jurisdictions;
• Removing legal obstacles that prevent DSO involvement in network reinforcement and congestion management;
• Updating European and national legal frameworks to explicitly allow DSOs to be involved in local balancing and local congestion management tasks, making use of resources connected to their network.
• Using European and national legal frameworks to provide the basic principles for neutral data management (e.g. non-discrimination, transparency, neutrality).
• Allowing direct contracts between DSOs and consumers/prosumers, and only banning these when general consumer protection and data protection is considered inadequate.

CERRE Director General, Professor Bruno Liebhaberg, says:

“Technological developments, as well as changes on the supply and demand side of European electricity markets call into question the traditional role of DSOs. It is crucial that DSOs are equipped to provide appropriate responses.”