There is no denying that distribution system operators (DSOs) in Europe face a myriad of challenges today, but new opportunities to unlock added value and maximize efficiencies from advanced metering infrastructures (AMIs) are also emerging. The most promising new development is the availability of a new generation of scalable Internet of Things (IoT) connectivity platforms, which bring together intelligent endpoints, flexible communications, software and applications in a single network that can enable forward-looking DSOs to chart a seamless path towards smart infrastructures.
Before describing the composition of such new platforms, it is worth unpacking the specific problems that they address for DSOs.
While it is difficult to generalize because there are so many energy market models across Europe, the core mission of a DSO is to manage a network that provides a secure electricity supply and quality of service between power generators and consumers. In each European country this has to be done within the risk and reward parameters of national and international regulatory frameworks, and wherever pricing is regulated there is naturally intense pressure on DSO operating margins. This pressure on margins means DSOs are under constant pressure to enhance the efficiency of their operations, but their challenges don’t stop there.
The European power industry is undergoing a significant transformation driven by three mega-trends: digitalization, decarbonization and decentralization. Much has already been written about these trends, particularly about the impact of integrating renewable energy sources into national grids, but it bears repeating that they are collectively forcing DSOs to completely re-think their approaches to system management.
It is no longer enough for them to simply invest in extending or enhancing the physical infrastructure of their systems. Those I speak with in the industry are clamoring for a new wave of flexible solutions that offer a clear transition path from their traditional networks to more intelligent smart grid systems, whereby they can more efficiently manage energy capacity, integrate renewables and enhance consumer services.
The most progressive DSOs, those already actively managing advanced metering infrastructures (AMIs) for instance, are especially looking for ways to leverage added value from their smart infrastructures and to fully utilize the data from intelligent endpoints at the grid edge, such as smart meters, sensors and connected IoT devices. Added value in this context means the development of new, data-driven use cases, offering increased transparency and control to the distribution grid, new consumer services and opening up new business models for operational efficiency. In a nutshell, DSOs of all sizes are telling me that they already want technology platforms that will grow and evolve with their business in the changing regulatory and operational environments that they face, and that will help to maintain grid flexibility, resilience and security in energy transformation.
The kinds of solutions emerging to address such complex needs are comprehensive connectivity platforms that can bring together intelligent grid-edge endpoints in a single network that supports interoperability (harmonizing multiple current and future communications standards) and enable new, innovative applications for both grid operation efficiency and new consumer services. In this new world of grid-edge intelligence, the smart meter is required to do a lot more than measure energy consumption. It has to be recognized as a truly intelligent and networked endpoint capable of opening up new levels of transparency for DSOs and consumers.
The utility IoT platform concept described here is not fanciful or futuristic: it exists today and versions of it are already being evaluated and implemented by the most forward-thinking DSOs. We should expect to see these DSOs benefit in the near term from networked grid-edge intelligence ecosystems that are open and secure, flexible for an ever-changing future, and which take full advantage of existing assets and investments.
But that’s not the end of the story.
Those same ecosystems will also provide DSOs with a scalable foundation for deploying future smart city infrastructures as well, from smart street lighting infrastructures to the possibility of multi-utility infrastructures.
Lead image credit Landis + Gyr