According to Euroelectric, the main reasons for the increase in the role of distribution system operators (DSO) in the future configuration of energy systems are the expected increase in distributed generation volumes and the share of RES in the energy balance up to 50% of the total electricity generation, most of which will be connected to the DSO.

According to the results of an expert study conducted by Euroelectric (an association of 35 energy companies in 32 EU Member States) which addresses the issues of electricity distribution in the long term, a new configuration of the energy market will be formed, which will require a revision of regulatory principles and additional investment in the development of flexible electricity distribution systems.

 In addition to the increase in distributed generation, the increase of the so-called “grid edge technologies”, such as heat pumps, batteries, etc. is expected, the number of electric vehicles is also expected to be  up to 40 million units in the EU.

Euroelectric considers the DSO to be one of the potential drivers of low carbon transformation and provides the following recommendations to the European energy policy institutions:

– to recognize the DSO  an important player in achieving the EU’s climate and energy policy goals, capable of delivering a cost-effective transformation towards a low carbon economy;

– – to facilitate the revision of the regulatory field and tariffs in order to prepare distribution networks in advance for the growth of small-scale electricity producers and expand services of demand management through the involvement of private households (home appliances, electric vehicles, etc.)

– make a political decision on the development of distribution networks as the most efficient way of managing the energy system and ensuring the reliability of energy supply compared to small-scale off-grid systems;

– to regulate relations with organized groups of prosumers on the basis of EU legislation on energy communities (analogue of energy cooperatives), granting the DSO the right to fulfill their respective responsibilities, in particular, balancing supply and demand for electricity for such small-generation owners’ associations;

–  to ensure a proportionate and non-discriminatory distribution of the costs of reforming the distribution networks among all consumers on the basis of the associated capacity and usage practices (continuously, periodically as a backup source);

– to recognize as objective the need for financing the construction of distribution networks through tariffs to ensure the security of energy supply in the context of large-scale electrification of private households and industry;

-to review the tariff methodology in order to increase capital investment in smart grids, promising technologies and innovations, including them as fixed costs in return on investment in assets;

– to offer specialized training to national energy regulatory authorities on the methodology of working on future tariffs for the DSO, taking into account the new challenges and requirements of EU energy transformation legislation.

The Euroelectric position paper will be used by the newly elected members of the European Commission, the European Parliament and will be taken into account in legislative initiatives to develop the EU energy sector. Within the next 2-3 years, distribution system operators will be able to generate the necessary political support and introduce appropriate legislative changes at EU level.

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