Many of the improvements to create smart grids will take shape within the distribution networks and, as the voice of local energy distributors across Europe, GEODE has produced this paper to set out the position of these Distribution System Operators (DSOs) to look at the management of intelligent electricity grids and what can be done to support their deployment.

There are numerous benefits to adopting smart grids, especially to enable the transition to flexible use of micro generation and large scale renewables while maintaining a reliable network. However, consumers will be at the heart of success in tackling this challenge and their own awareness and engagement in their energy future is vital. Therefore, the integration of smart meters, the effective use of consumption data from them as well as clear advice and well articulated tangible benefits will be essential. For this we need governments to aid in the engagement of consumers so that an open market is possible and everyone is able to actively participate in it.

Innovation is going to be a significant part of the development of smart grids, but in a regulated environment incentives are necessary to empower DSOs and provide the right mechanisms for these developments. From my own experience in the UK the unique Low Carbon Networks Fund, provided by our regulator Ofgem, has helped our DSOs to pioneer new grid technologies, explore different ways of working and allowed more flexible commercial arrangements in an effort to draw out the very best in engineering and business practice.

However, one size does not fit all and so across Europe it is essential that the steps taken to support smart grid developments must be suitable for each Member State individually. A pan-European approach and legal mandates risk being over-prescriptive and rather than supporting and invigorating progress it could have the opposite effect. European legislation should not inhibit national solutions where they are cost effective and capable of delivering success.

While smart grids will be instrumental in meeting the challenges of our energy future, conventional network reinforcement will remain necessary and here too, governments have a role to play in incentivising the investment required to ensure extra capacity is built. Meanwhile DSOs should also continue their traditional role of being the primary point of contact for customers where new connections and outages are concerned.

DSOs are absolutely critical to meeting the energy challenges of the future and this report sets out GEODE and its members’ position on the direction of travel we need. The move towards smart grids marks the development of the DSOs role, one that forges a new and innovative path that consumers can actively engage in. With the need for new technologies to work alongside traditional infrastructure, it is right that the DSOs themselves are given the opportunities to collaborate with partners from other sectors without having this potential undermined by sweeping mandates. This collaboration is a necessary enhancement of the DSO role that is mutually beneficial to consumers and industry.

Finally GEODE would like to give some key recommendations for actions to be taken by the European Commission and regulatory bodies to help Smart Grids deployment become a reality.