DNO to DSO Evolution

Climate change legislation, such as the EU’s Renewable Energy Directive and subsequent Clean Energy Package, and the consequential decarbonisation of the energy sector, is forecast to create significant growth in technologies in turn requiring major changes in how the electricity industry operates. Examples of such changes, many of which are already having an impact are:

  • Renewable generation continues to grow.
  • Electric vehicle and heat pump uptake is accelerating.
  • More and more consumers now have the ability to produce their own electricity.
  • New technology is giving consumers more control over how they use electricity.
  • Energy storage technology is rapidly improving and its use growing accordingly.

Consumers are becoming prosumers and are playing a much more active role in network control and management. As a result, the demands on the electricity network are changing. The network, which was designed to efficiently facilitate the flow of electrical energy towards the customer, is now experiencing significant energy flows in the opposite direction. Distribution Network Operators (DNOs) have already begun to take a more active role in the operation of the system; however, it is recognised that more dynamic DNO management will unlock further customer benefits. Read more about the benefits of dynamic network management here.

To effectively manage this changing landscape it is acknowledged that DNOs will need to evolve their roles and responsibilities, a change which is often referred to as the evolution from a DNO to a Distribution System Operator (DSO). 

A DSO can be defined as:

A Distribution System Operator (DSO) securely operates and develops an active distribution system comprising networks, demand, generation and other flexible distributed energy resources (DERs). As a neutral facilitator of an open and accessible market it will enable competitive access to markets and the optimal use of DERs on distribution networks to deliver security, sustainability and affordability in the support of whole system optimisation. A DSO enables customers to be both producers and consumers; enabling customer access, customer choice and great customer service.” 

Our Approach

We are taking a customer centric approach to defining this evolution.  In July 2018 we released a Call for Evidence (CfE)  asking our customers for their views on our evolution to a DSO and we also held an associated industry workshop in September 2018. Taking views on board from the CfE, in Feb 2019 we released our consultation document.  Following this we will provide a recommendations paper to the Utility Regulator. Watch our video below to learn more about the evolution from a DNO to a DSO.

Whilst we believe that it is important that we develop a Northern Ireland specific DSO vision, due to the specific nuances of the Northern Ireland network and market, we believe it is, as far as possible, necessary to ensure consistency with industry’s broader direction of travel.  To this end we are heavily engaged in the ENA Open Networks Project.

The Open Networks Project is a major energy industry initiative that will transform the way our energy networks work, underpinning the delivery of the smart grid. This project brings together nine of UK and Ireland's electricity grid operators, respected academics, Non-Government Organisations (NGOs), Government departments and the energy regulator Ofgem.  Read more about the Open Networks Project here.
 

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