The next EU budget will offer an “unprecedented resource opportunity for green energy and digitalisation”, with up to €249B available for climate investment, Kadri Simson, EU commissioner for Energy, told a meeting on digitalisation in the energy sector organised by Eurelectric.
Simson promised new legislation by June on a “smarter, more optimised and more integrated energy sector” by making by more efficient use of infrastructure. She said regulation on trans-European networks would facilitate hydrogen networks, offshore grids and more integration, adding “We have our work cut out for us”. Simson highlighted a doubling of electricity use, more of which would be at the distribution grid level.
That was why an EU-wide ‘DSO Entity’ on the lines of the bloc’s Entso gas and electricity network groups, to be launched in spring, is important, because it gives those entities a formal role in evolution of the energy system. Putting together a group for distribution network operators has proved troublesome in the past, because there are thousands across the bloc with different business models and responsibilities. Some are vested in local authorities, or act as local suppliers as well as network owners. This contrasts with the UK which is largely covered by a handful of DNOs who are strictly limited in their activities.
Simson said the evolving electricity system “calls for best use of current tools in market design” and said there would be a more prominent role for DSOs. A specific network code for DSOs would be published within the next six months that would require DSOs to facilitate market-based services.
“You must be bold. Recently we have seen the power of the digital world and there are similar [digital] opportunities for the electricity sector,” she said.
The next Horizon research programme will fund many digitalisation projects and work on data interoperability and a network code on cybersecurity are well under way. She highlighted themes in the next EU budget as an “unprecedented resource opportunity for green energy and digitalisation”, with least €249B available for climate investment, with themes including:
- Power Up: Includes future proof clean technologies and integration
- Renovate: For building upgrades
- Recharge and refuel: Connecting renewable energy with green transport
Christian Buchel of E.DSO, which includes 80% of European DNOs, and Enedis, said the message had arrived at a crucial time. “We are not observers or commentators - as companies and entrepreneurs we want to take part, because we are doers,” he said.
Annegret Groebel, president of regulators’ organisation CEER, said regulators are aware they have to react to these challenges. They have to take into account flexibility – which does not always mean network investment. Regulations have to be predictable but also responsive to a changing situation. “We need more flexibility but that does not necessarily mean more network,” she said.
She pushed back against suggestions that regulators were a block to change, saying she was “Not convinced there is a need to reinvent the regulatory wheel”. To say there was a lack of flexibility regulation was premature and the forthcoming energy package would kick off more changes. “We are well aware this is our role, and convinced that by using best practice in Europe we [can play it]. As regulators we need fit for purpose regulation for DSOs.”
She said “Grids are aging, so it is the right time to modernise”, but network operators’ assessment of the costs of grids needed for the energy transition was too high. Network estimates did not take into account, “balancing or offsetting effects, or digitalisation that reduces cost – the only solution seems to be to expand the network.”
Knud Pedersen of Radius said, “We need a step change in partnership with the regulator and customers.
“…Regulators don’t understand the big change we have to make. It’s not only copper but also the digital and data part
“We need a new way to work together and get rid of barriers. … companies are using a lot of effort just to educate the regulator.”
E.On’s Leonhard Birnbaum, said the response from E.On’s networks in seven countries was “they all have a need for more investment” with more requests for connection.
And he added, “If we invest too little or too late the increase will be significantly higher. [The investment for] for e-mobility is quite low but only if we act now.” Because EV use was growing fast, “If we over-invest the mistake is corrected very quickly but if we under-invest it is expensive.”
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