The European Union and Norway are home to an estimated 2,400 distribution system operators (DSOs), according to industry association Eurelectric.
Not all are operating in a new eco-system of on-site generation, storage and distributed generation but the move away from a central radial grid is likely to impact every player at some point.
In European countries where DSOs collect and deliver smart meter data to transmission system operators and retailers, distribution companies can be forgiven for wanting to extract more value from their data.
They have the capability to leverage two kinds of data - one from consumer consumption and the other from renewable generation, and the DSO is the first to see renewable production at a local level.
Europe's DSOs and regulation
In reality, DSOs are finding themselves hamstrung by regulation, the private sector (which is looking carefully at them and what they’re going to do), and municipalities that own the local networks.
Franck Freycenon, Head of Analytics at Atos Worldgrid, works with a number of European DSOs and agrees that they find themselves in a “nightmarish” situation.
Freycenon believes regulators are creating constraints around DSOs because they are afraid of them not sharing data, especially with municipalities.
“Certainly in France,” says Freycenon, where he is based, “they are also afraid of the kind of commercial jobs that DSOs might take that could distract from their obligation to public institutions.”
The regulatory environment in which DSOs operate will have a strong impact on the way they are delivering data and even if they will own it in future, believes Freycenon.
UK distribution system operators
In the UK, DSOs are limited in terms of data because smart meters are owned by energy retailers, and the data is held in the Data Communications Company, in what Freycenon describes as a “short code of the system”.
While in the French market, the regulator is considering creating a Green Button-type system as in the US to manage smart electricity and gas meter data. “This Green Button may not be handled by the DSO but in one sole repository,” explains Freycenon. “So a distribution system operator might lose the value of the data that they have just handled.”
And when DSOs are creating services, he says, they might be outside regulatory rules.
Freycenon cites the example of French DSOs not having the right to do demand-side management, which is the responsibility of the private sector and handled only by the transmission system operator.
A good case study is Stedin, the DSO for the Netherlands. Freycenon explains that because it is regulated, Stedin has kept the minimum core resources on the regulated structure and created a non-regulated structure that is delivering consultative services around grid, optimisation and investment.
He comments:"They are freer because they don't have regulative constraints and are fully able to leverage the data they have in their hands."
DSOs and data analytics
Although the operating environment is challenging, from his work with DSOs Freycenon believes that there is opportunity as well as impetus to find ways to create value from data.
Freycenon notes at industry event European Utility Week in late 2016 “most of the players” visiting the Atos Worldgrid booth were DSOs. “They were asking what can they do with data and how they can leverage it. They mentioned two main points - non-technical losses and predictive network maintenance to optimise investment.
“This compares to 2015 when we were meeting mainly energy retailers and their preoccupation was smart homes and leveraging data for consumer engagement and loyalty,” he says.
Energy regulators also understand that municipalities would like to be smarter but don’t have the financial and technical capabilities to handle energy data and data analytics.
Distribution system operators with their view on local renewable energy and infrastructure are in a good position to fill this role, believes Freycenon.
“DSOs can leverage data from different points of view because they have a better understanding and view of a consumer’s energy usage. They understand how the local ecosystem works and can predict what investment is needed in the local grid.”
Small cities over big cities
From working with French municipalities, Freycenon says that Atos Worldgrid believes there is a strong opportunity for DSOs in small cities.
He cites an example of working with a city of around 3,000 households and another of more than one million households. “We started the project thinking that there would be more opportunities for DSOs in the big city because it had more money and understood the project better.
“But the conclusion was the opposite. If a DSO wants to leverage data value and create services, it can make a greater impact in a rural area because the volume of renewable energy generation is much higher than urban areas.
“Small cities don’t have the capability to finance energy platforms so they need DSOs around to do it for them.”
Freycenon also notes that the attitude of end users in small cities towards energy was different because the benefits of renewable energy are concrete. “This particular small city is energy independent using renewable energy and even generating an excess. Residents understand that the energy they are using is due to investment into local renewable energy.
DSO and utility services
So the opportunity is there but how can DSOs unlock what Freycenon describes as “latent intelligence” from data?
“We don’t have a recipe for what kind of services you can offer around your data - each distribution system operator has a different context - but there is room for them because they have a key role to play between end users, renewables and city.”
When working with a DSO, the Atos approach is to understand what data the DSO has, the regulatory framework they’re working in and what the transmission system operators, retailers and aggregators are doing around them.
“Then we bring on board consultants and data scientists and plug a tool into the customer’s system to capture data. Based on results, we are in a position to say depending on their environment what kind of services are making sense for you, from your internal perspective and your go-to market.”
The company’s big data platform - Atos Codex - has the capability to crunch data coming from the energy sector to deliver services or reporting, and to help DSOs increase customer engagement and operational excellence, says Freycenon.
And his best piece of advice for DSOs wanting to mine value from their data? Experiment and try new things, says Freycenon. “By creating proof of concepts, you are changing the vision of the city, the citizen and the regulator.”