Distribution System Operators Observatory

The distribution system is a key part of the electricity chain. It links bulk production with end consumers. Recently, radical changes have taken place in every segment of the power industry. These are calling for a changing role of the Distribution System Operators (DSOs) in Europe. This report provides a clear picture of the features of distribution grids in Europe, on the way they are operated and how far DSOs are from the paved provisions proposed in the recent Electricity Directive of the European Commission.

The European electricity sector is undergoing radical changes in every segment of the power industry, from generation to supply. Ambitious policy goals set at European level to enhance the competitiveness, security and sustainability of the EU's energy system have called for major changes in the regulatory, technological, and market structure fields. The distribution sector is particularly affected by these changes. The increasing penetration of local renewable generation and the emergence of demand response enabling solutions are placing new requirements on the distribution networks, posing challenges to the reliability and efficiency of system operation. At the same time however, these new applications can also create opportunities to manage the distribution grids in a more flexible and efficient way. Smart grid concepts and technologies have an important role to play to address these new challenges and opportunities. A variety of solutions are already being tested in Europe, with encouraging results. Identifying the best technical, economic and social options requires a deep understanding of their impact on the physical distribution networks. Such knowledge is also necessary to evaluate the viability of replicating and scaling up pilot experiences already successfully implemented in Europe. At present, there is little publicly available information on the European distribution system operators (DSOs) and the networks they operate. Such lack of knowledge is partly attributable to the DSOs' reluctance to share data that can be considered as assets of commercial value, but it is also due to the vast number and heterogeneity of the distribution systems in Europe. The situation varies radically from country to country, due to historical as well as geographical, legal, political and economic reasons. In some Member States there is only one DSO, while in others there are tens or hundreds of them operating their networks on a regional or even municipal basis. Differences concern also other aspects, e.g. the scope of the DSO activities, the level of unbundling, the operated voltage levels and other key technical information on the networks. In the last years, the Joint Research Centre of the European Commission (JRC) has expanded its role as an independent observer of the energy system developments and transitions. Particularly, a big effort has been put in collecting, processing and analysing data on the power sector (from smart grid project costs and benefits to consumer engagement strategies, from power system techno-economic features to integrated regional systems/markets). This activity is aimed at providing stakeholders with tools and analyses to better understand the rapidly changing scene, enabling early identification of developments and opportunities and supporting evidence-based policy making. This report presents the latest JRC data brokering effort – the DSO Observatory project - focused on European distribution system operators and their distribution networks. The aim of the report is to contribute to a better understanding of the challenges that the transition to a new energy system is posing to European distribution system operators and to elaborate sound solutions to address them. To the best of our knowledge, this is the most comprehensive data collection exercise on European distribution systems published so far. Based upon this inventory, detailed reference network models (RNM) are developed to analyse the impact of distributed energy resources (DER) penetration and network automation on the technical performance of the distribution networks and to make available to the wider scientific community instruments to perform realistic simulations and analyses. The starting point of the DSO Observatory project was the collection of technical and structural data from the DSOs. Given the vast number of DSOs in Europe, the data collection exercise was limited to the bigger ones, i.e. the 190 DSOs that have to comply with the unbundling requirements set out in the EU Electricity Directive (i.e. the DSOs serving more than 100,000 customers, also referred to in the report as "larger DSO"). An online survey was launched in January 2015 with the aim of collecting several clusters of data, relating to types of ownership and unbundling, network structures and designs, amounts and types of connected distributed generation, and reliability of supply indicators. 79 out of the 190 larger DSOs responded to the survey. The representativeness of the obtained sample is quite high: the respondents manage over 70% of the electricity supplied by all DSOs serving over 100,000 customers. Together, the 79 DSOs distribute more than 2,000 TWh of electricity to over 200 million customers per year, covering a total area of more than 3 million square km. The collected data were used to build 36 indicators, divided in three categories, i.e. network structure, network design and distributed generation. These indicators allow for comparison of the parameters and criteria used by DSOs when designing and sizing their network installations. They help to shed some light on the different characteristics of some of the major European distribution networks and to support research activities by reducing the amount of resources that are typically devoted to compiling input data and building case studies. The project however also aimed at providing a tool to enable more sophisticated technical and economic assessment of different policy and technological solutions. For this purpose, 10 of the 36 indicators were chosen to create reference network models, i.e. large-scale network distribution planning tools that allow designing realistic distribution networks useful for simulation activities. RNMs allow the design of networks that supply the expected demand while taking into consideration the need to minimize the total investment and associated operational costs and to meet the defined reliability and quality of supply criteria. By providing a realistic distribution network, RNMs offer the possibility to reliably simulate the impact of different scenarios on the grid without the need to have access to the actual network data. Two large-scale representative networks, one rural and one urban, were selected to carry out the simulation analyses. The networks were used to analyse the impact of increasing levels of Renewable Energy Sources (RES) penetration, solar photovoltaic (PV) and wind in particular, on the technical performance of the grid. The impact on network voltages and network overloads was then monetised by means of a penalty cost function. The analyses show that the number and size of PV units, as well as their concentration/distribution on the network are all relevant parameters. By way of illustration, results highlight that limiting the size of the generation units would allow mitigating voltage and congestion problems, maximizing renewable penetration with no need of additional network investments. A careful consideration of the local conditions of each distribution area as well as of the different connection patterns - including unit sizes, technologies and location within the network - is therefore of paramount importance to minimize adverse impacts on the network. Another way to mitigate the voltage spread introduced by the increasing penetration of PV connected to the distribution network has been studied considering the installation of storage units where the PV are located. However from the carried analysis a spread voltage reduction is only observed when big storage units are installed for each PV unit. The high costs per kWh estimated for batteries in the storage market suggest however that other solutions should be considered to mitigate voltage spread in the distribution network. Finally a reliability analysis is reported, showing how the System Average Interruption Frequency Index (SAIFI) could be reduced by increasing the installation of tele-controlled switches in the distribution network. The analyses presented in the report provide an illustrative example of the potential applications of the representative networks built within the DSOs Observatory project.

Other applications are however possible and this report can be seen as a first step of an exercise that will continue in the future. The JRC will carry on in its scientific and policy support activities to better understand and address the challenges DSOs have to face in the transition to the new energy system.