Challenges facing distribution system operators in a decarbonised power system
The transition to clean energy is changing the nature of Europe’s power systems. Increasing electrification in the heat and transport sectors, more active consumers and the need to accommodate greater shares of wind and solar are impacting the fundamental design and operation of distribution networks. With the rise in community energy and local markets for energy and services, traditional generation capacity is transferring from the transmission to the distribution systems. These and other changes create a wide range of challenges and opportunities for distribution system operators.
To successfully navigate this shift, distribution system operators will need to embrace changes in their role and structure, while exploring the world of digitalisation and innovation to manage their networks. Philip Baker explores areas where it will be necessary for distribution system operators to adapt in the future to ensure a successful energy transition.
With domestic consumers generating more capacity, distribution system operators will need to take a more active role in managing the network by tapping into the inherent flexibility these resources offer. To achieve this, they will need to develop the skills and facilities required to maintain security and quality of supply as they procure and manage the contributions of even hundreds of thousands of active consumers. These developments will also change their interaction with transmission system operators, as responsibilities threaten to overlap at times. Policymakers can ease this tension by examining potential changes to the roles of both transmission and distribution system operators to ensure effective system security and management.
Regulators can incentivise distribution system operators by focussing on outcomes that reflect consumer needs and energy policy priorities, rewarding them for delivering these results in the most cost-efficient fashion. The policies will also address the way operators recover network costs. We will need to rethink network tariff designs to ensure we incentivise consumer behaviours that are consistent with the energy transition.