Power to the People!: European Perspectives on the Future of Electric Distribution

Implementing smart grids is central to the transition to a low-carbon economy, and DSOs are key players in this transition. A far-reaching change-one could say a revolution-in power systems is indeed ongoing; designing and implementing smart grids is not an option but an absolute necessity. If we do not do it, or if we do it too slowly, we will face major problems. To prepare, European DSOs are massively investing in R&D and demonstration projects in cooperation with the information communications technology (ICT) industry, acquiring the knowledge and skills needed to adapt and lead. Smart grids have the potential to benefit the whole value chain, but the market model must be defined. Whatever the preferred model, DSOs will have a key role to play as market enablers. DSOs will be responsible for setting up the playing field for retailers and aggregators so that it works for the benefit of customers. DSOs will increasingly act as local system operators. Well-organized active distribution system management will make it possible to reduce the investments needed to host renewable energy sources and electric vehicle charging stations and will guarantee security and quality of supply. Enhancing the “smartness” of distribution grids is not free of charge. It will require significant capex on the DSO side, while the benefits from those investments will accrue throughout the entire value chain. The development of business models, with the strong support of policy makers and regulators, is necessary to ensure that all parties share the risks, costs, and benefits of smart grids. Bringing smart grids from vision to reality will only happen if smart regulation is introduced. Last but not least, a key objective of European DSOs is to make sure that the new solutions that will be implemented are designed to benefit all customers.