Gaining access to distributed flexibility: three essential steps for DSOs

• Technical measures, such as dynamic cable rating and reassessment of nominal grid safety limits. 
• Incentives for grid users, such as dynamic tariffs, flexibility remuneration, and non-firm connection arrangements.

• In some countries, especially in continental Europe, utilising flexibility has never quite reached the level of maturity within DSO organisations. While technical solutions are adopted, schemes to incentivise end users are often considered difficult innovation projects.
• Network operation and system operation are not separate in most network companies at the distribution level. Within a TSO, maintaining the transmission grid and interacting with end users for ancillary services and system operations are two clearly distinguished activities. In the UK, the DNO is separated from the DSO, making it much easier to embed energy flexibility options in an organisation’s business as usual. 
• Flexibility is often seen as a temporary solution and presented as such by DSOs. While this  may be true in a technocratic sense, this focus on temporality often neglects the long-term value of flexibility for system operations (e.g. for outage management). More importantly, customers need a clear horizon to invest in control systems and propositions to become flexible. If the DSO contract is too short or of low value, they will not bother.
• The value of flexibility is not only found in congestion management. In the long term, the value in energy price arbitrage is expected to  become increasingly important. DSO propositions that do not acknowledge this additional value and that try to ringfence the flexibility for DSO purposes only are not the most attractive for owners of flexible assets. 
• The DSO might not be the right party for actively pursuing individual end-user flexibility. Most local flexible asset owners are residential or SMEs, who can lack the know-how, time and equipment to unlock flexibility. At the same time, a DSO is not familiar with formulating appealing client propositions. If flexibility is part of a ‘smart supply’ contract, wrapped in an intuitive app and smart ways to operate devices, intermediates like aggregators, IDNOs or suppliers can be a much easier way for DSOs to access distributed flexibility. However, this requires DSOs to come forward and seek cooperation with market parties. 
• In many countries, there is no common approach among the DSOs on how to purchase flexibility. Though some regulatory guidelines may be in place, and country-wide initiatives like GOPACS in the Netherlands and ENA’s Open Networks flexibility services in the UK provide standardised platforms, the differences in systems, processes and legal approaches often result in a confusing variety of flexibility demands.  

1. Embed the use of flexibility in the operational model of distribution networks, such as unbundling DSO and DNO activities in the UK.
2. Cooperate with the other network operators. The GOPACS platform in the Netherlands is an example of an economically efficient concept for collective redispatch.
3. Seek ways to cooperate and interact with market parties in a harmonised manner. If this requires adjustments to the regulatory framework, then let’s pursue those change. 

If you would like support to unlock the potential of distributed energy flexibility, please contact Michiel Dorresteijn.