In a recent consultation on the future of distribution system operators (DSOs), the Council of European Energy Regulators (CEER) recognised that DSOs – or distribution network operators (DNOs), as we refer to them in the UK – will play an important role in a well-functioning energy market, being responsible for secure system operation but also acting as a market facilitator. The Institution of Engineering and Technology (IET) agrees, but is concerned that the CEER proposals lack the required ambition to facilitate the necessary changes.
DNOs have established a reputation for developing smart technologies and innovative commercial arrangements with customers, mainly through Ofgem’s Low Carbon Networks Fund, to address the anticipated distribution network impacts of low-carbon technologies such as electric vehicles, heat pumps and renewable distributed generation. But it is becoming clear that addressing the future challenges for the UK’s electricity system will require more than smart grid solutions. What is needed is a whole-system approach integrating transmission, distribution, generation and demand. The IET’s power network joint vision report, Electricity Networks – Handling a Shock to the System, calls for a system architect to oversee the necessary system integration.
The first important step for DNOs is to transition from operators of largely passive distribution networks to operators of a far more active distribution system.
DNOs have a large customer base, which puts them in an ideal position to fully leverage the benefits of demand-side response, distributed energy storage and actively managed distributed generation, not only to manage distribution network constraints, but also to provide services to the market and to the national system operator.
In so doing, DNOs will truly become DSOs and play a vital role in facilitating whole-system integration, but only provided that unnecessary limitations to their activities are not placed in their way through overly conservative regulation driven by Europe.
Simon Harrison, chair, Institution of Engineering and Technology Energy Policy Panel