The European Union (EU) plans to be the first climate-neutral economy by 2050 and the United Kingdom (UK) is striving for emissions-free energy in the next 5 years. Staying up to date on changing energy regulation is crucial, as Distribution System Operators (DSOs) are a key player in achieving these targets. With more change on the horizon, how can DSOs keep up?
Here’s an overview of the EU and UK’s energy regulations and what they mean for DSOs.
- The EU and UK are world leaders with ambitious steps to achieve climate neutrality.
- The EU’s plans are outlined in the Clean Energy for all Europeans package (May 2019).
- The UK aims to match this commitment by investing in emissions-free energy over the next 5 years.
- DSOs need to know the new rules and players, invest in smart technology, coordinate with consumers and prepare for cross-border collaboration.
How the EU and UK are Leading the Way for a Sustainable Energy Future
The EU has set ambitious goals to achieve climate neutrality by 2050, as outlined in the Clean Energy for all Europeans package, published in May 2019. One objective is to increase renewable energy in its energy mix and energy efficiency each by 32% by 2030. The UK’s energy regulator, Ofgem, greenlit a £40 billion clean energy investment program to echo the EU’s regulations, transform energy networks and the electricity system operator to deliver emission-free green energy for UK, along with world-class service and reliability. These legislations show that successful energy transition will rely on the cooperation of all stakeholders—from the government to system operators, to consumers.
What DSOs Need to Know About Changing Energy Regulation
New rules and players. A more modern and adaptable energy market is in store for the EU and UK, integrating more renewables and better protection against outages. To navigate these changes, DSOs will need to coordinate supply with distributed energy resources (DERs).
The advantage is in smart technology investments. Efficiencies are being integrated across the market— from smart buildings and retrofitting to consumer technologies. The shifting dynamics of demand and competition means that DSOs need to make a similar investment in technologies, such as energy grid software, to optimize their responsiveness to the market and energy supply.
Consumers play a greater role in the clean energy transition. Consumers have more accessibility to produce their own energy, store it and sell it onto the grid. Smart technology is also increasing awareness of consumption and optimizing energy efficiency. To collaborate with consumers, DSOs are required to enable new technologies to allow them join and participate in an equitable way in order to enhance the overall competition and encourage innovation.
Prioritize the needs of consumers. As networks prepare to achieve net-zero emissions, regulators are putting measures into place—such as the UK’s Ofgem-RIIO 2—to ensure energy consumers get better value for money, better service, and environmentally sustainable outcomes from their networks. DSOs need to know these regulations so they can deliver on consumer expectations within this framework.
Cross-border collaboration is crucial. The EU is implementing new rules to achieve an integrated market—all to improve the safety and security of the grid, ensure the availability of energy and increase operational and cost-efficiency. In order to achieve the targets, each Member State is required to draft a National Energy and Climate Plan (NECP) for 2021-2030 that details how it will contribute to the EU’s overall objectives. DSOs need to know the detailed regulations from NECP to better work with their cross-border counterparts.
The countries who champion sustainable energy and create ambitious targets are setting good examples for the rest of the world. Maintaining compliance with changing regulatory standards is essential, as it can lead to numerous benefits for the environment, economy, market, and people. It’s clear that sustainability is a key part of the future for energy and we are on the way to build structures and support initiatives that can adapt to changing regulatory standards for a carbon-neutral future to maintain our quality of life.