Six keys to a winning DSO future

Six utility ‘Keys of Excellence’ identify Frontrunner distribution system operators (DSOs).

The energy transformation is bringing changes across the value chain from the way energy is generated to how it is delivered and used. The push for renewables, the ability to smarten the grid with monitoring and automation, the opportunity to integrate OT with IT, driven by decarbonization and digitalization, is impacting especially the businesses of the distribution system operators (DSOs).

Market driven or regulatory constrained?

How DSOs gear up and evolve in this environment will vary from one country to another and the extent to which the process is enabled to be market or regulation driven. But there will always be market leaders, whether they be first adopters or those who proactively “choose to act differently.”

What sets these companies apart? A new report based on a study of hundreds of DSOs across the world from Ericsson has found that ‘Frontrunners’ who are outperforming the others exhibit certain common traits, or ‘Keys of Excellence’.

DSOs were rated on their network reliability, cost efficiency and innovation, indicated respectively by SAIFI/SAIDI, opex and smart meter penetration. Frontrunners identified in North America, Europe and Australia range from market leading multinationals to local challengers, indicating that high quality standards, proactivity and day to day efficiency matter as much, if not more than size.

DSO mindset for the future

The study identifies the Frontrunner DSOs as having high network reliability and low opex, which is linked to their eagerness to implement new technology, as demonstrated by their superior smart meter penetration.

This is achieved with a “mindset for the future.” The Frontrunners share a different mindset both in their distribution operations and in their roles within the wider utility ecosystem.

“They see a future filled with opportunity and intend to get there first,” states the report.

They are successfully building out their IT and analytics capabilities and merging their OT systems. They are driving real time visibility, automation and control of their network and improving asset management through predictive maintenance. They are also meeting head on the challenges such as small scale distributed generation and electric vehicles with new and flexible approaches and new partnerships.

Utility ‘Keys of Excellence’

The study identifies six utility keys of excellence representing six different approaches to improve success and growth.

Seamless technology

No matter the number of different systems and standards, the future is IT/OT integration. Integrating IT and OT is all about improved decision making and creating a ‘single view’ of all assets, field forces, users, processes and systems.

Through seamless convergence, DSO Frontrunners embody how silo-locked OT data can be analysed and utilized for more effective, facts-based business decisions.

Perfectly predicting

All DSOs are facing a growing mass of data but what is done with it is what matters. Frontrunners are able to combine multiple data sources, such as asset data with weather forecasts, consumption, customer service insights and service logs, to draw insights and act on the data, often in real time.

Smarter grids

Grids are, and will continue to be, the core of the DSO. Smarter connected and self-healing grids offering greater reliability, lower losses and operating in a more cost efficient way, are the hallmark of the Frontrunner.

Asset intelligent

DSO are asset intensive companies. DSO Frontrunners gather data from substations and smart meters for analysis for proactive maintenance and asset management, offering significant savings on traditional maintenance practices and reducing unplanned outages.

Flexible green

The growth of prosumers could lead to grid defections while EVs could multiply peak demand, presenting new operational challenges. DSOs can ultimately be disrupted by these situations or they can work with the ‘disruptors’.

Ecosystem partnerships

DSOs also can’t be everything to everyone and relationships are becoming more important than ever before. New partnerships with research institutions, demand response providers, storage manufacturers and energy retailers, as well as other DSOs provide the teamwork necessary to stay on top of this new reality. Frontrunner DSOs seek collaboration across the value chain.

In conclusion, the report advises that there isn’t one perfect solution for every DSO, nor is there a magic wand that DSOs can wave to create a more profitable future. But they can take charge of their development agenda to secure operations.

Further reading

Ericsson: DSO Frontrunners Report. Identifying opportunities for Distribution System Operators