As Secretary General of EDSO for Smart Grids, the European association for electricity distribution system operators (DSOs), Roberto Zangrandi is a champion for his members’ role in an energy network based on distributed generation.
Zangrandi, however, is not afraid of warning DSOs of seismic changes coming in the European energy sector and what they must do to prepare.
He likens encouraging small and medium-sized DSOs to accelerate their business models to teaching elephants how to dance.
“With the decrease of the role and the revenue stream of energy generators, DSOs have found a new pride and comfort in being a profitable part of the business,” he says.
“DSOs used to be a little neglected because the money came from generation but now they have discovered they are fashionable and are putting in new structures to accommodate renewables and other shifting activity.”
Zangrandi cautions that although many DSOs would like this new role to last forever, this is a transitional stage.
“Small and medium-sized DSOs must understand that their business model is going to change, and, although regulated, they must be competitive if they want to remain bankable.
He adds: “That is a point that is very difficult for them to understand quickly. The only way to teach them how to dance properly is by bringing them along with the market evolution.”
Energy services and DSOs
The European DSO, however, is well placed to enable services as part of changing their operative models - “we are neutral market facilitators so we must facilitate,” says Zangrandi.
To manage services though, DSOs will need to find flexibility in the grid - both upward and downward, which “will force them to rearrange their specific assets, not in terms of cables and poles, but in terms of the ability to monitor their whole grid.”
DSOs will be expected to invest a lot of money to play in this new playing ground, he maintains, which is why EDSO is advocating for fair treatment of DSOs in the relationship with local energy communities as part of the European Commission’s Clean Energy Package.
“We are urging the commission not to socialise the losses and privatise the advantages that are coming from the local energy communities,” he says.
“Prosumers will have a very important and necessary role; they are already present in many European countries. But what impact does it have on the whole energy system when they grow tenfold or 100 fold? Is that growth jeopardising the flexibility of the grid or will it increase the flexibility of the grid?”
So how does the DSO begin to understand what services to offer? Zangrandi jokes that if a DSO spent an hour with a local energy community together they would come up 72 use cases.
He says: “Cut that number in half and then in half again and you have at least a dozen use cases that must be addressed if not immediately but pretty soon in order to enable this evolution of the grid.”
Energy consumer in transition
Zangrandi points out that it’s not just the regulatory framework that is bringing change to DSOs but end users will also change vastly in the next 20 to 30 years.
“We’re not talking about the millennials that are coming along right now, but the kids of the millennials who will be comfortable with the language of purchasing services.
“They will be the decision makers in a market that must be fast-reacting as well as solid in terms of infrastructure reliability.
“We will see customers who buy electricity for tomorrow morning using an application that lets them buy the cheapest kilowatt hours the night before to meet their energy needs.”
Zangrandi gives an example of double tariffing where he lives in Belgium. “I plan when to run my washing machine, dryer and dishwasher. That's a basic, simple example. But my kids are growing up with that in mind; the dishwasher runs at night, and the dryer early in the morning before the tariff ends.”
When asked where we are in this journey, Zangrandi responds that we are in the first quarter.
“The role of the commission is to accompany DSOs in a sustainable planning over the next 20, 30 years. I target 20 to 30 years because that is the not the usual life span of a power sector investment but because in the next 20 to 30 years, we shall face dramatic change.”