Laurent Schmitt, Secretary General of ENTSO-E, is clear about the objective of his association for European transmission system operators (TSOs).
“I want to see a Spanish prosumer being able to buy cheap renewable offshore wind from the Nordics when there is no sun in Spain.
“At ENSTO-E, we are working night and day to enable conjunction across the entire chain to allow that kind of transaction.”
To reach that goal, Schmitt explains how the association is initiating “one new layer of integration with the deployment of new network codes, which are going to further align market processes across Europe.”
European TSOs are entering a new 15-year cycle for optimising network codes, explains Schmitt.
“Network codes released between now and 2022 will include a lot of new market design for balancing and real time pricing.”
He adds: “The next cycle will be between 2022 and 2030, which will include the European Commission’s Clean Energy Package and that's where the distribution system operators (DSOs) and TSOs will further align.”
Europe’s energy network - innovation to industrialisation
Schmitt feels the new codes represent a turning point on the path to meeting the commission’s goals for reducing carbon emissions and increasing the volume of embedded distributed generation in the grid.
He explains that the European Union research and innovation project Horizon 2020 provided a “blank page” for a lot of interesting concepts to emerge. “I contributed a lot to these in my past history,” said Schmitt in reference to his previous role as Global SmartGrid Strategy Leader at Grid Solutions, a GE and Alstom joint venture.
But Schmitt believes that the blank page phase has passed and TSOs can now start on implementation.
“We are now switching to an industrialisation phase, which raises a lot of questions,” says Schmitt.
“How do you scale up from a prototype into a truly industrial environment? TSOs are used to being platform players but that will also change. And what’s the TSO relationship going to be like with the manufacturer in the future? What intellectual property does the TSO hold compared to the manufacturer? That also raises a lot of questions.”
Multi-utility networks - benefits
Schmitt however says this is not the end of R&D and one new thing that is appealing to ENTSO-E at the moment is a multi-utility approach.
He explains: “We get more approval from the commission by thinking not only of the electricity system but the electricity and gas system together.
“We need to entirely redesign the system and build bridges of information and data between these players so that we do not over invest in capacity for the sake of the entire system.
“At the end of the day, we don't want a system where we produce three times the capacity into the heat, gas and electrical networks.”
Energy transition enablers
Schmitt maintains that TSOs must be humble in the way that they are facing this huge challenge.
The business model of tomorrow's system will be “totally different and the energy sector needs to work collectively to make this happen.
“If we don't, we will have issues with grids not being able to incorporate further renewables or electric vehicles. We will lose globally as an industry because we will be opposing this transition. I think we should rather enable this transition.”
So what is the role of TSOs in this transformation? For Schmitt, “TSOs are today default market facilitators in the wholesale market and DSOs will in the future need to step up alongside TSOs to bring wholesale and retail closer together.
"This will for sure require their clear unbundling to ensure a non-discriminatory role in the market and avoid any market distortion.
“The exercise that we have to do is align that vision of distribution facilitation - DSOs depending on their size want to play that role as well as TSOs so there is a bit of conflict there.
“We also need to work out how to exchange data to help European prosumers. I’m not sure which data is best for the prosumer to be honest. We’ll see what the market looks like; it’s going to be fun.”