Abstract
Technological developments – summarised by the term ‘Smart Energy System’ – as well as changes on the supply and demand side of the electricity market (such as the growth of distributed generation and the deployment of charging stations for electric vehicles), are fundamentally changing and challenging the role of DSOs. It is crucial that DSOs provide appropriate responses.
The key challenge is to ensure that the DSO is equipped to perform its role as a neutral market facilitator and to enable sufficient flexibility that is warranted to balance the intermittency of renewable generation at the wholesale market level. Many of the resources (e.g. demand, distributed generation, storage) that can potentially provide flexibility are connected at the distribution level.
DSOs will play an important role in facilitating the activation of these flexibility resources. They will do so not necessarily directly or in a commercial function, as an intermediary or supplier of flexibility. Rather, they will do so in a system function through their control of (metering) data and physical installations (communication devices), and through their necessary relations to TSOs, to network users, to aggregators and to the other players involved in supplying flexibility. In other words, the DSO must play a neutral market-facilitating role.
In this report, it is argued that while fundamental reforms are not warranted, various legal and regulatory adjustments should be considered. These adjustment should recognise that a one- size-fits-all approach would generally not be advisable, as conditions vary across, and sometimes even within, Member States. European and national legal frameworks should therefore give sufficient leeway to regulators and DSOs to fine-tune network tariffs, contracts with system users and other measures to local conditions. Frameworks should also allow for experimentation with alternative business models, different forms of network regulation and contracts. The report makes eight concrete policy recommendations
The key challenge is to ensure that the DSO is equipped to perform its role as a neutral market facilitator and to enable sufficient flexibility that is warranted to balance the intermittency of renewable generation at the wholesale market level. Many of the resources (e.g. demand, distributed generation, storage) that can potentially provide flexibility are connected at the distribution level.
DSOs will play an important role in facilitating the activation of these flexibility resources. They will do so not necessarily directly or in a commercial function, as an intermediary or supplier of flexibility. Rather, they will do so in a system function through their control of (metering) data and physical installations (communication devices), and through their necessary relations to TSOs, to network users, to aggregators and to the other players involved in supplying flexibility. In other words, the DSO must play a neutral market-facilitating role.
In this report, it is argued that while fundamental reforms are not warranted, various legal and regulatory adjustments should be considered. These adjustment should recognise that a one- size-fits-all approach would generally not be advisable, as conditions vary across, and sometimes even within, Member States. European and national legal frameworks should therefore give sufficient leeway to regulators and DSOs to fine-tune network tariffs, contracts with system users and other measures to local conditions. Frameworks should also allow for experimentation with alternative business models, different forms of network regulation and contracts. The report makes eight concrete policy recommendations
| Original language | English |
|---|---|
| Publisher | Centre for Regulation in Europe (CERRE) |
| Commissioning body | Centre for Regulation in Europe (CERRE) |
| Number of pages | 98 |
| Publication status | Published - 8 Nov 2016 |